How Western Business Schools Should Play Asia

Asia is where the growth is, so B-schools need to prepare their MBAs for an Asia-centric future. Here are a few things smart B-schools can do to keep up

By Haiyan Wang and Anil K. Gupta

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Asia's Best Business Schools

As the ice hockey legend Wayne Gretzky astutely noted, one should "skate to where the puck will be, not where it is now." In management education, the puck is moving rapidly toward Asia. Western business schools that do not figure out how to play the Asia game effectively run a serious risk of ending up as regional players.

Consider a few facts: Asia today accounts for over a quarter of the world's gross domestic product and is growing at more than twice the pace of other regions. Within two decades it will constitute almost half of the world's GDP and be larger than the U.S. and Europe combined. Asia is also becoming more Asian. Intra-Asia trade presently accounts for about 54% of all cross-border trade by Asian countries. By 2025 this figure will be closer to 75%.

Importantly, too, the composition of the world's 500 largest corporations is changing rapidly. In 1995. companies headquartered in China or India accounted for only five of the 500 largest corporations in the world. By 2009 the number had grown to 44. It could easily reach 150 by 2025. Add to this the large number of corporate giants headquartered in Japan, South Korea, Southeast Asia, and West Asia, and it is not unlikely that by 2025, half of the world's 500 largest corporations could be headquartered in Asia. Note also that, in the case of many non-Asian multinationals, Asia accounts for a large and growing proportion of its middle and senior managers' responsibilities. In short, the global market for management education is rapidly becoming Asia-centric.

smarter to partner up

Most business schools are analogous to diversified companies with multiple product lines related yet distinct in terms of target customers, value propositions, and value-creation and delivery systems. As such, the rise of Asia has different implications for different product lines: undergraduate, MBA, EMBA, and executive education. Since faculty research and doctoral programs have always been extremely global, these require the least amount of tinkering.

In the case of programs that involve large numbers of students over a multi-year time frame (such as the four-year undergraduate degree program, the two-year full-time MBA, and the three-year part-time MBA), we deem it unwise to consider building an Asian footprint, except in those rare cases where a generous host government is willing to underwrite all or most of the costs. Large numbers and long duration make these programs very resource-intensive. For such programs, creating an Asian footprint would subject the Western business school to heavy startup costs, tough competition from local players, lower fee structures, and extremely severe resource constraints in terms of top-tier faculty.

The right approach for these programs is to stay confined to the home campus, attract a reasonable proportion of bright Asian students, and transform the learning content and format with the goal of making graduates "Asia smart." One of the best ways to do this is to require that every student undertake immersion field visits to at least two Asian countries preceded by intensive classroom learning about the country to be visited and capped by systematic debriefing and analysis of the lessons learned. Field visits, however, cannot be the sole strategy to transform the content of learning. Business schools also need to invest in helping their faculties become more knowledgeable about Asia so the content of regular on-campus courses becomes more global and less Western-centric.

For a growing number of business schools, the executive MBA has moved from the periphery to the center and is rapidly becoming one of the core programs. The short duration (typically 18 months) and modular format (four to six consecutive days once per month) of the EMBA program makes such offering extremely amenable to globalization.