FT.com / Business education - The rise of the MBA politicians
posted by Carlos A. Páscoa Machado at 9:20 AM
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Tuesday, January 18, 2011
Tuesday, December 13, 2005
Introduction
The text reproduced as first post to this blog is a shortened version of the proposal jointly written by Rainer Lenz and Carlos Machado and presented to the DEMI/ESBM consortium members in the recent Winterthur meeting.
You are invited to make your comments and suggestions on this proposal. Any suggestions, critics, joint venturing, etc. are welcome.
You are invited to make your comments and suggestions on this proposal. Any suggestions, critics, joint venturing, etc. are welcome.
posted by Carlos A. Páscoa Machado at 10:35 AM
0 comments
M-I-BA Proposal
1- Idea/Mission statement
The aim of this proposal is to set in motion a process of congregation of wills that should result in the implementation of a thoroughly international Master program in the business related field, which would benefit from the strength of the educational local/national experience of involved universities and by the same token allow the prospective partners of this initiative to overcome some of the restrictions inherent to their domestic higher education policies. The idea is to build up a transnational education services platform institutionally anchored in European and/or international law, committed to the education of highest quality, accredited and rated by relevant international agencies.
This proposal submits to every DEMI member university the opportunity to participate (as one of the main founding shareholders) in a common study program “Master in International Business Administration - MIBA”, which will strive to gain international reputation and a good ranking position in related evaluation lists. Let us bring together the different and disseminated strengths and experience of individual DEMI universities and put them to the service of this initiative in the shape of a powerful institutional education network.
The authors’ experience mainly with the organization of several editions of what we labelled a “Virtual Classroom in International Business” [1], as a common lecture in the study program of different national universities lead us to the obvious conclusion that business knowledge in a globalised world is international from the outset and needs no new bricks and mortar facilities in order to be delivered, as we suppose the DEMI consortium was built to prove. The success of such a project, embodied currently in this proposed Master program is based on professional knowledge, a learning management system (LMS), combined with a qualified lecturer pool residing predominantly in the DEMI member institutions. The supply of knowledge is therefore no more physically located at a local/national university – it is virtual and boundless.
By spinning off this Master program from national universities towards an international non-profit organisation a much higher level of quality, efficiency and flexibility could eventually be reached. This level would hardly ever be reached by the highly bureaucratic working style of traditional public and private universities, constrained as they are by numerous regulations and working habits.
2 - Product
The product in question is a postgraduate degree born internationally and dedicated to spread state of the art theoretical and applied knowledge needed to implement and develop international business operations, namely from areas such as management, economics, law, all of course under an intercultural perspective.
Problem and project based and distance learning are de rigueur as methods of delivering, but they should be complemented with more traditional teaching methods, according to teachers’ preferences and pedagogical needs.
The program design will comply among others with the “European MBA Guidelines” issued recently by the European Quality Link (EQUAL), the European association of national accrediting bodies. These guidelines aim to establish common standards for programs and to set a benchmark.[2] Therefore the MBA will require a minimum of 400 hours of classroom study or structured contact. All in all, the program should require a minimum of 1,200 hours personal work. The MBA has a minimum length of one academic year of full-time study or the equivalent when the programme is offered on a part-time or modular basis.
These minimum requirements provide a framework for building up a flexible study program, which has no time limits for graduation: take it as you go. The students get the degree as soon as they have acquired a certain amount of credit points, not after a specific period of time, like a certain number of semesters.
The learning process is organized in standardized and ad-hoc modules. The syllabus would include both standard obligatory and elective modules, besides one especially dedicated to the dissertation work. Across all modules presentation and communication skills, intercultural management, business ethics and teamwork are supposed to be stressed and relied upon, besides the international aspects of them all that should be pervasive. Most of the teaching should be based on problem solving, case study and project implementation. The exclusive teaching, learning (and preferably also thinking) language is English.
3 - MIBA study program
a) Standard modules (10 ECTS points each)
1 – International Business
2 - Marketing
3 - Finance
4 - Human Resources
5 - Trade
6 – International Business Strategy
7 - Economics of the Multinational Firm
8 – Leadership
b) Electives (10 ECTS points each)
1 - Law
2 - Accounting
3 - Econometrics
4 - Entrepreneurship
5 - Negotiation
6 – Logistics / Supply chain management
7 - Decision Making
8 - Risk Management
9 - Operations Management
10 - E-commerce and E-conomics
11 - Economics and Management of Innovation
12 – Area studies (Doing business in…)
c) Other (10 ECTS points)
1 - Dissertation project
4 - Target market
The program is designed for experienced professionals with a managerial track record (at least 2-3 years business experience in a position of responsibility after they received their Bachelor, Diploma, Licenciatura, or equivalent degree), who are seeking a way to prepare themselves adequately to take on more responsibility and move forward in their careers. The potential worldwide audience is made out of graduates from different scientific areas that want to acquire knowledge and practical working tools needed for the current and strategic operations of multinational corporations and other organizations deeply involved in all kinds of international activities.
Potential candidates and their future employers are seeking for a high-level degree, that is simultaneously accredited by international (mainly European and U.S.) agencies, by the higher education national institutions directly involved and by brand names of known multinational firms that will eventually support this initiative.
The potential candidates are eager to find a suitable institutional framework which provides them with a training program that is update both from the scientific/technical point of view and from the state of the art methods and tools used in the process, as well as a learning experience that is predominantly proactive, on the job, including internships in sponsoring international firms and other organizations.
The candidates would all have to sit a GMAT test and be interviewed by the local and overall coordinators.
The selection process would be based on these two points and the selection committee, made out of all coordinators, would have ideally a final decision prerogative.
5 - Distribution
As indicated before, the distribution methods will go beyond traditional classroom activity and take advantage of Internet enabled e-Learning Management System(s), and other tools including multi-track video-conferencing, chat, collaboration, whiteboard and automatic test and exam giving and taking.
It should be stressed that the students can have direct face to face contact with the teachers involved in the project at the locations currently occupied by them, at one of the participating institution. All other contact needs would be satisfied by above mentioned means.
6 - Promotion
It would include advertisement in the specialized international press and other media and be based on or make a reference to the DEMI, VCIB (Virtual Classroom in International Business), INTOPIA® (International Business Simulation Game) and other experiences on course in the different participating colleges.
It could help if something about this in connection with a report about the previously mentioned initiatives was presented in conferences and got published in journals like the Journal of Teaching in International Business and others more widely distributed.[3]
7 - Unique Selling Point
International education/training for international business players.
Born global initiative based on a network of talent and other resources that are used to train students organized in virtual cross-country classes to solve concrete problems of the sort multinational firms are confronted with. The MIBA member or associated higher education institutions are committed not only to train their students in problem solving prospective way, but also to educate them in critical and interdisciplinary thinking.
All teaching staff will have a Ph D. and their language skills in English derive from their native use or from proficiency acquired during their academic and other professional activities. A restricted number of the teaching staff can compensate their lack of a Ph. D. with a relevant professional experience, but the ideal combination would ally a Ph. D. with relevant international business and teaching experience.
8 - Institutional strategy: DEMI as a European Economic Interest Group
Partner universities within the DEMI-Consortium will found a European Foundation for International Business Development (working title) to foster education and advanced professional standards in the field of international business. Based on EU Community law (Council Regulation (EEC) No 2137/85 of 25 July 1985) the new legal entity could be founded as a “European Economic Interest Grouping (EEIG)” with the objective to facilitate and encourage cross-border cooperation.
A European Economic Interest Grouping must be formed in accordance with the following rules:[4]
· The purpose of the grouping is to facilitate or develop the economic activities of its members by a pooling of resources, activities or skills. This will produce better results than the members acting alone. It is not intended that the grouping should make profits for itself. If it does make any profits, they will be apportioned among the members and taxed accordingly. Its activities must be related to the economic activities of its members, but cannot replace them.
· An EEIG can be formed by companies, firms and other legal entities governed by public or private law which have been formed in accordance with the law of a Member State and which have their registered office in the Community. It can also be formed by individuals carrying on an industrial, commercial, craft or agricultural activity or providing professional or other services in the Community.
· An EEIG must have at least two members from different Member States.
· The contract for the formation of an EEIG must include its name, its official address and objects, the name, registration number and place of registration, if any, of each member of the grouping and the duration of the grouping, except where this is indefinite. The contract must be filed at the registry designated by each Member State. Registration in this manner confers full legal capacity on the EEIG throughout the Community.
· When a grouping is formed or dissolved, a notice must be published in the Official Journal of the European Communities (C and S series).
· A grouping's official address must be within the Community. It may be transferred from one Member State to another subject to certain conditions.
· Each member of an EEIG has one vote, although the contract for its formation may give certain members more than one vote provided that no one member holds a majority of the votes. The Regulation lists those decisions for which unanimity is required.
· The EEIG must have at least two organs: the members acting collectively and the manager or managers. The managers represent and bind the EEIG in its dealings with third parties even where their acts do not fall within the objects of the grouping.
· An EEIG may not invite investment by the public.
· An EEIG does not necessarily have to be formed with capital. Members are free to use alternative means of financing.
· The profits of an EEIG will be deemed to be the profits of its members and will be apportioned either according to the relevant clause in the contract or, failing such a clause, in equal shares. The profits or losses of an EEIG will be taxable only in the hands of its members. As a counterweight to the contractual freedom which is at the basis of the EEIG and the fact that members are not required to provide a minimum amount of capital, each member of the EEIG has unlimited joint and several liability for its debts.
This international platform will be used to build up a leading global community of scholars for the creation and dissemination of knowledge in International Business and Policy issues. It transcends the boundaries and restrictions of national education systems in academic disciplines and in managerial functions to enhance international business education and practice.[5]
These objectives include the following:
Facilitating post graduate study programs in the field of International Business, namely the Master in International Business and Administration, M(I)BA, currently proposed, that is international from the outset and takes advantage of the many technical and communications tools now available to us.
Encouraging and fostering research activities that advance knowledge in International Business and increase the available body of teaching materials.
Cooperating, whenever possible, with public, business and academic enterprises and associations to support the internationalization objectives of the DEMI foundation.
The Foundation solicits funds from member academies, corporations, other foundations and other sources, that may be used for a wide range of purposes: student scholarships, faculty fellowships, research grants, travel grants, doctoral dissertation grants and publication subsidies. Incorporated as a charitable foundation contributions would be tax deductible within the European Union and other countries.
The Foundation, also supported by sponsors, offers several awards for academic and business achievement throughout the year. The award recipients are recognized at the annual meetings and promoted accordingly through appropriate mass media.
A foundation or an educational services firm based on European business law would be the ideal vehicles to implement such an initiative. The shareholders could be any and all of the participating education and business entities. This legal framework would provide this initiative with as much flexibility as needed and possible without neglecting the pertinent interests of the partners.
9 - Price / Tuition fees
Graduate and nondegree students are obliged to pay tuition fees per credit point (ECTS) of a teaching module. This pricing model will allow a much higher flexibility compared to a package price for the whole study program. A European master program has usually to amount up to 120 ECTS and students will pay per ECTS point.[6] The MIBA program would offer around 14 to 21 modules, including project work and master thesis. Not all modules need to function at every edition. The real figures have to be seriously calculated based on a detailed business plan including a financial analysis, both still to be implemented.
The price envisioned for the product/service at hand should be in the medium or high range in order to signal quality and to guarantee a independently viable business model. This is supposed to have a positive monetary return to all parties involved, not excluding any form of complementary funding. Prices should/could be differentiated between candidates on an individual basis, and scholarships (of different amounts and types) should be made available to the students on a means tested and academic potential basis.
One source of funds for this purpose could become the European ERASMUS MUNDUS Action program (http://europa.eu.int/comm/education/programmes/mundus/index_en.html ).
10 - Costs
Up-front costs would be reduced to a minimum and actual teaching would only start after a certain number of enrolments were acquired. The project coordinators, one per institution and an overall coordinator, who would intervene mainly in case of conflict, would then approach suitable teachers, included in a previously arranged database, who would be considered relevant and adequate to participate in the teaching side of the project. A salary would be set according to subject, quantity of students enrolled and other specificities, like CV and reputation.
The participant institutions would get a return on the basis of their input in terms of teaching, technical and administrative staff, and other incurred extra costs, like facilities made available to MIBA. This could assume the form of an overhead cost. The overall project coordinator should work fulltime and could be recruited among Ph.D.s in an international public competition organized by the coordinators of all partner institutions bearing a vote with a weight proportional to the share in the virtual European firm/foundation to be created. He should be assisted by an administrative staff member of his choosing. These two persons would be the only fixed costs to be supported at least at the begin of the initiative. The board members would increase on this according with their means and needs, as they see fit. All costs should be supported by the inherent incomes, except for the start-up costs of the first six months.
Other types of subsidized participation could be envisioned for students recruited from participant and sponsoring universities/polytechnics/organizations according to local conditions and subject to approval by the M(I)BA board.
Legal advice for the setup of the MIBA legal entity could be efficiently provided by the legal departments of founding institutions. If specialized advice was deemed necessary funds would have to be withdrawn from start-up contributions.
11 - Financial viability
Startup one time costs
Preparation of project outline
Coordination up to the first edition start
Setup of legal entity
Accreditation process
Scenario A
Cohorts of 40 to 60 students, one fourth to one third of them local, i.e. at the school whose teacher is offering the module are envisioned as the ideal case.
If fees are 18,000€ each, then income would amount to between 720,000 and 1,080,000€, distributed among 15 to 20 teaching modules.
That would give between 36,000 and 72,000€ for each module to be allocated according to following rule:
10 per cent for advertisement
10 per cent for selection process
10 per cent for the use of school facilities and other overhead costs
10 per cent for administrative work and coordination
10 per cent for teaching materials/tools
50 per cent for teachers, tutors and others, like outside speakers
12 - SWOT analysis
Strengths
Relatively innovative enterprise.
Experience with international business teaching by the consortium members.
Flexibility of the distribution channel to deliver the product.
Distinguished European character of the program, although including global perspective and contribution of non-European partners.
Weaknesses
Lack of experience with international business teaching by some of the consortium members.
Joint venture with multiple partners with concomitant complications in terms of unified management, sense of purpose and individual responsibility. Therefore a strong leadership is needed to bring the project through.
Lack of brand name recognition so far.
Lack of proficiency in the English language by some prospective teachers.
Opportunities
Anticipated high and growing demand for such teaching initiative worldwide.[7]
Current lack of funds in some of the member universities can make them more prone to engage in a financially sustainable teaching initiative as the one proposed here
Threats
Competition by some incumbent higher education providers of similar degrees.[8]
[1] Currently the “Virtual Class Room in International Business” (3rd edition) is being run together by teachers in three universities: Carlos Machado, University of Minho, Braga, Portugal; Rainer Lenz, Universidad Iberoamericana, Puebla, Mexico and Gisbert Lensing, University of Applied Sciences, Bielefeld, Germany. For a quick look at some aspects of the first two editions you might consider to click on http://www2.eeg.uminho.pt/economia/pascoa/vcib20405/VCIB/index.htm
[2] European MBA Guidelines: http://www.fibaa.de/ger/downlo/europeanmbaguidelines.pdf
[3] The authors of this proposal are natural candidates to help draft such a report.
[4] Source: http://europa.eu.int/scadplus/leg/en/lvb/l26015.htm
[5] See the European International Business Academia (EIBA) ( http://www.eiba-online.org/associations/eiba/index.asp ) and the Academy of International Business (AIB) (http://aib.msu.edu/ ), perhaps also for the accreditation process and alliance building.
[6] According to a Wall Street Journal Europe article of June 14, 2005, Warwick was charging £24,400 (€36,500) for its 12-month program, and London Business School was planning to charge £41,970 in September. Other more local programs were charging between €16,000 and €14,000. The Financial Times of July 25, 2005 mentions that the University of Auckland charges “just” US$20,000 for its MBA program. The same newspaper of August 1, 2005 mentions US$35,500 for the most expensive EMBA in China offered by the first privately owned business school to be licensed there, the Cheung Kong business school.
[7] According to a McKinsey report mentioned in the Financial Times of October 7, 2005 by Geoff Dyer and Khozem Merchant “Graduates may fail Chinese economy”, and to Sarah Schafer “Help Wanted. China has too many factories and too few skilled managers, a talent gap that could trip up its runaway economy” in the Busness Week of August 29, 2005. Many of these prospective students are being diverted from the traditionally most popular providers, as reported by Jon Boone in the Financial Times of September 14, 2005 under the title “Fewer foreign students choose US and UK”. These trends could be confirmed by proposed market research, if deemed necessary and in case funds are available for that purpose.
[8] A quick Internet search under this keyword will bring forward some of the institutions in point.
The aim of this proposal is to set in motion a process of congregation of wills that should result in the implementation of a thoroughly international Master program in the business related field, which would benefit from the strength of the educational local/national experience of involved universities and by the same token allow the prospective partners of this initiative to overcome some of the restrictions inherent to their domestic higher education policies. The idea is to build up a transnational education services platform institutionally anchored in European and/or international law, committed to the education of highest quality, accredited and rated by relevant international agencies.
This proposal submits to every DEMI member university the opportunity to participate (as one of the main founding shareholders) in a common study program “Master in International Business Administration - MIBA”, which will strive to gain international reputation and a good ranking position in related evaluation lists. Let us bring together the different and disseminated strengths and experience of individual DEMI universities and put them to the service of this initiative in the shape of a powerful institutional education network.
The authors’ experience mainly with the organization of several editions of what we labelled a “Virtual Classroom in International Business” [1], as a common lecture in the study program of different national universities lead us to the obvious conclusion that business knowledge in a globalised world is international from the outset and needs no new bricks and mortar facilities in order to be delivered, as we suppose the DEMI consortium was built to prove. The success of such a project, embodied currently in this proposed Master program is based on professional knowledge, a learning management system (LMS), combined with a qualified lecturer pool residing predominantly in the DEMI member institutions. The supply of knowledge is therefore no more physically located at a local/national university – it is virtual and boundless.
By spinning off this Master program from national universities towards an international non-profit organisation a much higher level of quality, efficiency and flexibility could eventually be reached. This level would hardly ever be reached by the highly bureaucratic working style of traditional public and private universities, constrained as they are by numerous regulations and working habits.
2 - Product
The product in question is a postgraduate degree born internationally and dedicated to spread state of the art theoretical and applied knowledge needed to implement and develop international business operations, namely from areas such as management, economics, law, all of course under an intercultural perspective.
Problem and project based and distance learning are de rigueur as methods of delivering, but they should be complemented with more traditional teaching methods, according to teachers’ preferences and pedagogical needs.
The program design will comply among others with the “European MBA Guidelines” issued recently by the European Quality Link (EQUAL), the European association of national accrediting bodies. These guidelines aim to establish common standards for programs and to set a benchmark.[2] Therefore the MBA will require a minimum of 400 hours of classroom study or structured contact. All in all, the program should require a minimum of 1,200 hours personal work. The MBA has a minimum length of one academic year of full-time study or the equivalent when the programme is offered on a part-time or modular basis.
These minimum requirements provide a framework for building up a flexible study program, which has no time limits for graduation: take it as you go. The students get the degree as soon as they have acquired a certain amount of credit points, not after a specific period of time, like a certain number of semesters.
The learning process is organized in standardized and ad-hoc modules. The syllabus would include both standard obligatory and elective modules, besides one especially dedicated to the dissertation work. Across all modules presentation and communication skills, intercultural management, business ethics and teamwork are supposed to be stressed and relied upon, besides the international aspects of them all that should be pervasive. Most of the teaching should be based on problem solving, case study and project implementation. The exclusive teaching, learning (and preferably also thinking) language is English.
3 - MIBA study program
a) Standard modules (10 ECTS points each)
1 – International Business
2 - Marketing
3 - Finance
4 - Human Resources
5 - Trade
6 – International Business Strategy
7 - Economics of the Multinational Firm
8 – Leadership
b) Electives (10 ECTS points each)
1 - Law
2 - Accounting
3 - Econometrics
4 - Entrepreneurship
5 - Negotiation
6 – Logistics / Supply chain management
7 - Decision Making
8 - Risk Management
9 - Operations Management
10 - E-commerce and E-conomics
11 - Economics and Management of Innovation
12 – Area studies (Doing business in…)
c) Other (10 ECTS points)
1 - Dissertation project
4 - Target market
The program is designed for experienced professionals with a managerial track record (at least 2-3 years business experience in a position of responsibility after they received their Bachelor, Diploma, Licenciatura, or equivalent degree), who are seeking a way to prepare themselves adequately to take on more responsibility and move forward in their careers. The potential worldwide audience is made out of graduates from different scientific areas that want to acquire knowledge and practical working tools needed for the current and strategic operations of multinational corporations and other organizations deeply involved in all kinds of international activities.
Potential candidates and their future employers are seeking for a high-level degree, that is simultaneously accredited by international (mainly European and U.S.) agencies, by the higher education national institutions directly involved and by brand names of known multinational firms that will eventually support this initiative.
The potential candidates are eager to find a suitable institutional framework which provides them with a training program that is update both from the scientific/technical point of view and from the state of the art methods and tools used in the process, as well as a learning experience that is predominantly proactive, on the job, including internships in sponsoring international firms and other organizations.
The candidates would all have to sit a GMAT test and be interviewed by the local and overall coordinators.
The selection process would be based on these two points and the selection committee, made out of all coordinators, would have ideally a final decision prerogative.
5 - Distribution
As indicated before, the distribution methods will go beyond traditional classroom activity and take advantage of Internet enabled e-Learning Management System(s), and other tools including multi-track video-conferencing, chat, collaboration, whiteboard and automatic test and exam giving and taking.
It should be stressed that the students can have direct face to face contact with the teachers involved in the project at the locations currently occupied by them, at one of the participating institution. All other contact needs would be satisfied by above mentioned means.
6 - Promotion
It would include advertisement in the specialized international press and other media and be based on or make a reference to the DEMI, VCIB (Virtual Classroom in International Business), INTOPIA® (International Business Simulation Game) and other experiences on course in the different participating colleges.
It could help if something about this in connection with a report about the previously mentioned initiatives was presented in conferences and got published in journals like the Journal of Teaching in International Business and others more widely distributed.[3]
7 - Unique Selling Point
International education/training for international business players.
Born global initiative based on a network of talent and other resources that are used to train students organized in virtual cross-country classes to solve concrete problems of the sort multinational firms are confronted with. The MIBA member or associated higher education institutions are committed not only to train their students in problem solving prospective way, but also to educate them in critical and interdisciplinary thinking.
All teaching staff will have a Ph D. and their language skills in English derive from their native use or from proficiency acquired during their academic and other professional activities. A restricted number of the teaching staff can compensate their lack of a Ph. D. with a relevant professional experience, but the ideal combination would ally a Ph. D. with relevant international business and teaching experience.
8 - Institutional strategy: DEMI as a European Economic Interest Group
Partner universities within the DEMI-Consortium will found a European Foundation for International Business Development (working title) to foster education and advanced professional standards in the field of international business. Based on EU Community law (Council Regulation (EEC) No 2137/85 of 25 July 1985) the new legal entity could be founded as a “European Economic Interest Grouping (EEIG)” with the objective to facilitate and encourage cross-border cooperation.
A European Economic Interest Grouping must be formed in accordance with the following rules:[4]
· The purpose of the grouping is to facilitate or develop the economic activities of its members by a pooling of resources, activities or skills. This will produce better results than the members acting alone. It is not intended that the grouping should make profits for itself. If it does make any profits, they will be apportioned among the members and taxed accordingly. Its activities must be related to the economic activities of its members, but cannot replace them.
· An EEIG can be formed by companies, firms and other legal entities governed by public or private law which have been formed in accordance with the law of a Member State and which have their registered office in the Community. It can also be formed by individuals carrying on an industrial, commercial, craft or agricultural activity or providing professional or other services in the Community.
· An EEIG must have at least two members from different Member States.
· The contract for the formation of an EEIG must include its name, its official address and objects, the name, registration number and place of registration, if any, of each member of the grouping and the duration of the grouping, except where this is indefinite. The contract must be filed at the registry designated by each Member State. Registration in this manner confers full legal capacity on the EEIG throughout the Community.
· When a grouping is formed or dissolved, a notice must be published in the Official Journal of the European Communities (C and S series).
· A grouping's official address must be within the Community. It may be transferred from one Member State to another subject to certain conditions.
· Each member of an EEIG has one vote, although the contract for its formation may give certain members more than one vote provided that no one member holds a majority of the votes. The Regulation lists those decisions for which unanimity is required.
· The EEIG must have at least two organs: the members acting collectively and the manager or managers. The managers represent and bind the EEIG in its dealings with third parties even where their acts do not fall within the objects of the grouping.
· An EEIG may not invite investment by the public.
· An EEIG does not necessarily have to be formed with capital. Members are free to use alternative means of financing.
· The profits of an EEIG will be deemed to be the profits of its members and will be apportioned either according to the relevant clause in the contract or, failing such a clause, in equal shares. The profits or losses of an EEIG will be taxable only in the hands of its members. As a counterweight to the contractual freedom which is at the basis of the EEIG and the fact that members are not required to provide a minimum amount of capital, each member of the EEIG has unlimited joint and several liability for its debts.
This international platform will be used to build up a leading global community of scholars for the creation and dissemination of knowledge in International Business and Policy issues. It transcends the boundaries and restrictions of national education systems in academic disciplines and in managerial functions to enhance international business education and practice.[5]
These objectives include the following:
Facilitating post graduate study programs in the field of International Business, namely the Master in International Business and Administration, M(I)BA, currently proposed, that is international from the outset and takes advantage of the many technical and communications tools now available to us.
Encouraging and fostering research activities that advance knowledge in International Business and increase the available body of teaching materials.
Cooperating, whenever possible, with public, business and academic enterprises and associations to support the internationalization objectives of the DEMI foundation.
The Foundation solicits funds from member academies, corporations, other foundations and other sources, that may be used for a wide range of purposes: student scholarships, faculty fellowships, research grants, travel grants, doctoral dissertation grants and publication subsidies. Incorporated as a charitable foundation contributions would be tax deductible within the European Union and other countries.
The Foundation, also supported by sponsors, offers several awards for academic and business achievement throughout the year. The award recipients are recognized at the annual meetings and promoted accordingly through appropriate mass media.
A foundation or an educational services firm based on European business law would be the ideal vehicles to implement such an initiative. The shareholders could be any and all of the participating education and business entities. This legal framework would provide this initiative with as much flexibility as needed and possible without neglecting the pertinent interests of the partners.
9 - Price / Tuition fees
Graduate and nondegree students are obliged to pay tuition fees per credit point (ECTS) of a teaching module. This pricing model will allow a much higher flexibility compared to a package price for the whole study program. A European master program has usually to amount up to 120 ECTS and students will pay per ECTS point.[6] The MIBA program would offer around 14 to 21 modules, including project work and master thesis. Not all modules need to function at every edition. The real figures have to be seriously calculated based on a detailed business plan including a financial analysis, both still to be implemented.
The price envisioned for the product/service at hand should be in the medium or high range in order to signal quality and to guarantee a independently viable business model. This is supposed to have a positive monetary return to all parties involved, not excluding any form of complementary funding. Prices should/could be differentiated between candidates on an individual basis, and scholarships (of different amounts and types) should be made available to the students on a means tested and academic potential basis.
One source of funds for this purpose could become the European ERASMUS MUNDUS Action program (http://europa.eu.int/comm/education/programmes/mundus/index_en.html ).
10 - Costs
Up-front costs would be reduced to a minimum and actual teaching would only start after a certain number of enrolments were acquired. The project coordinators, one per institution and an overall coordinator, who would intervene mainly in case of conflict, would then approach suitable teachers, included in a previously arranged database, who would be considered relevant and adequate to participate in the teaching side of the project. A salary would be set according to subject, quantity of students enrolled and other specificities, like CV and reputation.
The participant institutions would get a return on the basis of their input in terms of teaching, technical and administrative staff, and other incurred extra costs, like facilities made available to MIBA. This could assume the form of an overhead cost. The overall project coordinator should work fulltime and could be recruited among Ph.D.s in an international public competition organized by the coordinators of all partner institutions bearing a vote with a weight proportional to the share in the virtual European firm/foundation to be created. He should be assisted by an administrative staff member of his choosing. These two persons would be the only fixed costs to be supported at least at the begin of the initiative. The board members would increase on this according with their means and needs, as they see fit. All costs should be supported by the inherent incomes, except for the start-up costs of the first six months.
Other types of subsidized participation could be envisioned for students recruited from participant and sponsoring universities/polytechnics/organizations according to local conditions and subject to approval by the M(I)BA board.
Legal advice for the setup of the MIBA legal entity could be efficiently provided by the legal departments of founding institutions. If specialized advice was deemed necessary funds would have to be withdrawn from start-up contributions.
11 - Financial viability
Startup one time costs
Preparation of project outline
Coordination up to the first edition start
Setup of legal entity
Accreditation process
Scenario A
Cohorts of 40 to 60 students, one fourth to one third of them local, i.e. at the school whose teacher is offering the module are envisioned as the ideal case.
If fees are 18,000€ each, then income would amount to between 720,000 and 1,080,000€, distributed among 15 to 20 teaching modules.
That would give between 36,000 and 72,000€ for each module to be allocated according to following rule:
10 per cent for advertisement
10 per cent for selection process
10 per cent for the use of school facilities and other overhead costs
10 per cent for administrative work and coordination
10 per cent for teaching materials/tools
50 per cent for teachers, tutors and others, like outside speakers
12 - SWOT analysis
Strengths
Relatively innovative enterprise.
Experience with international business teaching by the consortium members.
Flexibility of the distribution channel to deliver the product.
Distinguished European character of the program, although including global perspective and contribution of non-European partners.
Weaknesses
Lack of experience with international business teaching by some of the consortium members.
Joint venture with multiple partners with concomitant complications in terms of unified management, sense of purpose and individual responsibility. Therefore a strong leadership is needed to bring the project through.
Lack of brand name recognition so far.
Lack of proficiency in the English language by some prospective teachers.
Opportunities
Anticipated high and growing demand for such teaching initiative worldwide.[7]
Current lack of funds in some of the member universities can make them more prone to engage in a financially sustainable teaching initiative as the one proposed here
Threats
Competition by some incumbent higher education providers of similar degrees.[8]
[1] Currently the “Virtual Class Room in International Business” (3rd edition) is being run together by teachers in three universities: Carlos Machado, University of Minho, Braga, Portugal; Rainer Lenz, Universidad Iberoamericana, Puebla, Mexico and Gisbert Lensing, University of Applied Sciences, Bielefeld, Germany. For a quick look at some aspects of the first two editions you might consider to click on http://www2.eeg.uminho.pt/economia/pascoa/vcib20405/VCIB/index.htm
[2] European MBA Guidelines: http://www.fibaa.de/ger/downlo/europeanmbaguidelines.pdf
[3] The authors of this proposal are natural candidates to help draft such a report.
[4] Source: http://europa.eu.int/scadplus/leg/en/lvb/l26015.htm
[5] See the European International Business Academia (EIBA) ( http://www.eiba-online.org/associations/eiba/index.asp ) and the Academy of International Business (AIB) (http://aib.msu.edu/ ), perhaps also for the accreditation process and alliance building.
[6] According to a Wall Street Journal Europe article of June 14, 2005, Warwick was charging £24,400 (€36,500) for its 12-month program, and London Business School was planning to charge £41,970 in September. Other more local programs were charging between €16,000 and €14,000. The Financial Times of July 25, 2005 mentions that the University of Auckland charges “just” US$20,000 for its MBA program. The same newspaper of August 1, 2005 mentions US$35,500 for the most expensive EMBA in China offered by the first privately owned business school to be licensed there, the Cheung Kong business school.
[7] According to a McKinsey report mentioned in the Financial Times of October 7, 2005 by Geoff Dyer and Khozem Merchant “Graduates may fail Chinese economy”, and to Sarah Schafer “Help Wanted. China has too many factories and too few skilled managers, a talent gap that could trip up its runaway economy” in the Busness Week of August 29, 2005. Many of these prospective students are being diverted from the traditionally most popular providers, as reported by Jon Boone in the Financial Times of September 14, 2005 under the title “Fewer foreign students choose US and UK”. These trends could be confirmed by proposed market research, if deemed necessary and in case funds are available for that purpose.
[8] A quick Internet search under this keyword will bring forward some of the institutions in point.
posted by Carlos A. Páscoa Machado at 10:24 AM
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