The Rise of the Global MBA
Globalization of business causes universities to reinvent their MBA programs
When Aaron Landgraf traveled to Rwanda last winter, he quickly encountered a thorny business dilemma that put some real money at stake.
On a proving ground far removed from anything in his experience, the 27-year-old graduate student from Albuquerque, N.M., was assigned to help an established wholesaler, Great Lakes Energy, boost sales of the company's solar-powered lantern. In a country where many homes are off the electrical grid and rely on dirty kerosene lanterns for light, the solar model had enormous sales potential —but coming up with an efficient distribution system had been a problem.
Over the course of three weeks, Landgraf—part of a team of master's degree candidates in a new Johns Hopkins University business program—helped Great Lakes lay the foundation for a new distribution system that was simultaneously innovative and well tailored to the limited tools at hand in a developing nation.
Landgraf's gain from the exchange was far richer than a few course credits and the satisfaction in a job well done. Rwanda reshaped his understanding of the value of a globally oriented master of business administration (MBA) degree.
No longer, said Landgraf, is hands-on international experience simply another option for the budding entrepreneur. It is becoming pretty much indispensable.
“To compete in the global marketplace in the future, you are going to have to understand these global dynamics,” he said. As a member of the charter class of the new Global MBA program offered by Johns Hopkins Carey Business School, Landgraf has stretched his aspirations in the sustainable energy field to encompass markets beyond the United States.
Redefining What's Global
Variations on Landgraf's story are told again and again by students, professors, and administrators at universities that have bolstered the international offerings in their graduate schools of business. In recent years, many universities have either created new international business programs—“global MBAs,” in the shorthand of some schools—or else fortified such offerings under the aegis of their existing MBA programs.
“For too long, we've had a tendency to acknowledge globalization superficially,” said Prof. Paul Almeda of Georgetown's McDonough School of Business, which offers a Global Executive MBA program in partnership with the university's well-known Edmund A. Walsh School of Foreign Service and ESADE Business School in Spain.
Almeda, an associate dean who grew up in the onetime Portuguese colony of Goa, lampooned the superficial approach this way: “Let's go on a foreign trip and say, ‘Wow! This is global!”' Far better, he said, to “fully embrace the concept of globalization” with programs that immerse the student in a foreign culture through long preparation in class, travel that entails problem-solving with foreign companies, and follow-up studies that set the stage for globally oriented careers.
Lawrence Ward, associate dean for academic programs with the Kogod School of Business at American University, said that business today demands people who are “able to pack a suitcase, pick up and do business far from home''—on the short-term basis of a sales-development trip, for example, or on the long-term basis of a two- or three-year operations assignment to a particular country. Consequently, people shopping for MBA programs “have an expectation” of strong international offerings, said Ward.
“There's no such thing today as a totally domestic business,” added William Kooser, associate dean of students at Johns Hopkins Carey Business School. “Even if you are taking over your father's widget business in Omaha, you're going to want to know about how the world works. And if you don't, your competitor will.”
The rise of global MBA studies has tracked the globalization of the marketplace at large—and, in particular, the rise of emerging markets around the world. In the past, most of the international focus of companies from the industrial world was on building factories and service centers where labor was cheaper. Lately, however, firms in the United States and other countries have looked to sell more and more products to the rising middle classes in developing nations. The consulting firm McKinsey & Company projects that 900 million Asians will enter the middle class by 2020, wielding the market power of a surge in disposable income.
Many economists predict that China will become the world's biggest economy sometime during the decade that begins in 2020. China will thus outstrip the gross domestic product of the United States, even as India, Russia, Brazil and other developing nations begin to surpass the big European economies.
If the numbers are less dramatic in other regions of the developing world, the trend is still unmistakable: the growth of smaller developing economies such as Colombia, Vietnam and South Africa is accelerating at higher rates than it is in the G-7 industrial nations, according to surveys by the International Monetary Fund.
Overseas Travel Required
Georgetown University's flagship Global Executive MBA is a 14-month program broken into six “modules,” each culminating in a two-week immersion in an overseas locale. The program is designed for accomplished professionals who remain at their jobs while preparing individually for their overseas consulting stints through assigned studies. The program attracts many classes of professionals —executives, entrepreneurs, sales directors and more—in arenas ranging from energy and engineering to health care and the sciences.
Among the roughly 40 students in each Global Executive MBA class, more than 20 nationalities are typically represented, Almeda said. “The diversity of the classroom brings a remarkable richness to every session,'' he said, adding that such exchanges also enrich the experience during each journey abroad.
Almeda offered an example of an essential lesson for the American executive venturing overseas. “In the U.S., we believe in setting the conditions squarely and getting down to negotiations straightaway,” he said. “That's totally at odds with the culture of business in China or India,” where such an approach might be considered abrupt or even insulting. In such cultures, Almeda said trust must first be built through such rituals as taking meals together. This is the kind of lesson that can be learned only through direct overseas experience, he added.
For Hanna Dust, a veteran human resources executive originally from Tennessee, the experience at the McDonough School abounded in such lessons. Dust, 35, completed her consulting project as part of a team of four assigned to the operations of an established American company, 3M, in Bangalore, India.
Dust's work in Bangalore revolved around a continual challenge for U.S. companies there: the competition to recruit and retain members of a huge, well-educated new generation of Indian workers. All in all, Dust said it was “an amazing experience” to navigate cross-national business relationships with the “freshers”—people in their 20s and early 30s—who will lead tomorrow's global workforce.
Nurturing a Global Outlook
Amanda Cardinale, 26, is living proof that there may be no such thing as a typical MBA candidate—at least in the current era of globalization. Practically reared in the humanities, Cardinale has studied French since before she entered the first grade. She majored in European history at an old-line bastion of the liberal arts, New York City's Barnard College.
After a start in the literary publishing business, Cardinale turned to the broadcast media, gravitating toward the technically-oriented arena of operations. That experience impelled her to seek a business degree. She said the attraction at American University's Kogod School was the modest size of the classes and the university's “commitment to the individual student.”
Kogod has two MBA offerings: a two-year, full-time option and a professional (or part-time) program. The international courses in the full-time program remain optional, according to Dean Ward, “because the majority of the students seek out international coursework and take it.” The professional program requires an international business course because the global perspective has become so important, he added.
Cardinale, a full-time MBA candidate, selected one of the program's optional courses in international business because it offered studies in Paris—somewhat familiar ground for a Francophone—and in Prague. In France, she got a close-up view of how a venerable cosmetics giant, L'Oréal, has computerized and mechanized its assembly lines with no apparent loss in its traditional blends of ingredients. In the Czech Republic, she saw how “old communist craftsmanship,” as she put it, has rapidly been enlisted to the service of Western capitalism at a General Electric aviation plant.
The view of these cultures through a business lens has so changed her life, Cardinale said, that she now envisions a career overseas.
Building a Program From Scratch
The Global MBA program at Johns Hopkins' Carey School is one-of-a-kind, according to its leaders, because it was built from scratch with an eye toward serving the global market. Significant proportions of its faculty and its charter class—now in its second and concluding year—come from foreign countries. The second Global MBA class arrived on campus in August.
Kooser, the associate dean, cites one course, known as Innovation for Humanity, as emblematic of the school's approach. Its students spend up to six weeks on campus in intensive study of the history, culture and business climate of a destination country. Then they travel to that country for three weeks of work on-site with an established business. Last year's charter students chose among India, Kenya, Peru and Rwanda.
All of which gets back to Aaron Landgraf's experience with the distribution of solar lanterns in Rwanda. The device, similar in size and weight to an old-fashioned camping lamp, had tremendous profit potential. But Sam Dargan, entrepreneur and founder of Great Lakes Energy, faced a challenge. Rwanda's highways were too poor, its telephone systems too thin, and its computer networks too weak for modern pathways of inventory and distribution to function to Dargan's satisfaction. From company headquarters, he did not know at a given moment how much inventory a particular distributor had in a far-flung village—or even whether the distributor was getting the company's instructions about when the Great Lakes agent would next visit that store.
From an American point of view, the company's problem was an eye-opener. Here, on one hand, was a popular, state-of-the-art energy gadget at an affordable price. On the other hand: a vast potential market in a rapidly developing nation.
With an educational and professional background in energy, the environment, and information technology, Landgraf brought a keen understanding of energy technology to the collaboration on how to solve these problems. Similarly, each of the other four grad students on his team brought a particular skill and background to the table.
The result was a simple, effective stratagem. Great Lakes built a handful of small “hubs” around the country to extend the reach of its headquarters. These were warehouses, essentially, that also served as meeting places. Every distributor was assigned a regular time to meet the Great Lakes agent at the nearest hub in order to exchange vital information on sales and inventory and to stock up on lanterns to bring back for sale at the village store.
Thus did Great Lakes become better equipped to redeem the promise of its ingenious product. To Landgraf, the parallel was clear: his experience with Samuel Dargan's solar lantern shed new light on the promise and potential of global MBA studies.