Bringing B-School to the Mideast
A little more than a decade ago, one of the few places in the Middle East to study for an MBA was at Egypt's American University of Cairo. Times have changed, and enthusiasm for Western-style management education is starting to spread throughout the Arab world. Executives in the Mideast, where engineering and medicine used to rank among the most prestigious degrees, are starting to covet MBAs and short executive courses, and schools in the U.S. and Europe are making strides to accommodate them.
Until recently, Western business schools kept their distance, instead encouraging Arab managers to travel to universities outside the region. As Mideastern economies start to modernize and privatize, educators are taking a closer look at this region, which some predict could be the next frontier in management education. Western schools say a business education is the best way to teach a young manager, strengthen the economy, and improve a nation's business practices and ethics. And despite serious geopolitical concerns in Iraq and Saudi Arabia, some schools are sticking around for the long haul.
On May 31, for instance, Barcelona's IESE Business School graduated its first class of 40 Executive Development Program (EDP) graduates in Cairo after four, week-long sessions over a four-month period. EDP is the first step in a multiyear plan to train professors in the region and to ultimately help establish a new B-school in Egypt called Nile University of Technology (NileTech). (IESE has helped open a dozen B-schools worldwide, but none in Arab countries.)
With help from IESE professors and others in Europe, NileTech hopes to enroll its first class of MBA students in October, 2004. To help build a base of local instructors, IESE is offering three fellowships to Egyptians who enroll in classes leading to PhDs in business. To date, though, only one person has applied for the fellowship.
France and Singapore's INSEAD has also started to focus on promoting its custom executive-education work in the Mideast. The school has plans to open a satellite center in Beirut, Lebanon -- home to many of its regional graduates -- in the next 6-to-12 months to serve as a hub for its Mideast case-writing and conference work. "In order to play a role in the region and to make an impact, we...have to invest in it," says Peter Jadersten, director of development at INSEAD. He adds: It's "a part of the world that to some extent we've neglected."
London Business School has run Worldclasses in Dubai, United Arab Emirates since February, 2001, and will host its third class in Jordan at a cost of about $7,500 per person. The school has also produced a custom-made executive program on strategy and leadership for the Islamic Development Bank's middle and senior managers.
Ashridge, a B-school based just outside of London, has a three-year-old office in Dubai to help sell its short courses to privatizing companies throughout the kingdom and region. David Klewin, Ashridge's strategic partner for the Middle East, says the school is "reaching far more people," noting that they hope to run 10 to 12 tailor-made programs per year by 2006, vs. five in 2004. The University of Virginia's Darden School of Business has taught new business concepts to 120 rising managers from Bahrain since 1999, with a class of 21 students set to start in July.
Demand for business courses isn't solid throughout the region. It's greatest in countries like the UAE, which gained entry into the World Trade Organization in April 1996, and has lost some of its protective barriers. "A big advantage is the opportunity [for our bankers] to network with people from more developed parts of the world," says British native Alan Skofield, head of human resource development at the National Bank of Dubai.
Elsewhere, "companies need to learn how to compete in a global marketplace in order to enhance our export capabilities and create jobs," says Khaled Ismail, president of the Cairo-based System Design & Software Development (SySDSoft), which sells design services for digital-communication systems. Ismail sent two of his employees to the IESE course.
Politics also plays a role in boosting demand for regional schools. In some countries, policymakers want to increase the numbers of local citizens vs. expatriates in key positions. In the UAE, many financial institutions are following government guidelines that urge them to "Emitarize" their staffs, creating huge demand for leadership lessons. Skofield says he has been increasing the percentage of the bank's local employees. His aim is to reach 40%, up from 33% now.
To do this, Skofield is turning mostly to British schools like Ashridge, where he sends as many as a dozen employees each year. He also leans on British B-schools at Bradford University and the University of Leicester, which offer MBA degrees via distance learning. "To find the quality of education you need, you have to go other places," Skofield says.
Still, schools with regional experience say doing business in the Mideast can be taxing. Take Georgia State University's Robinson College of Business, which ran an MBA for Working Professionals with Cairo University. It graduated 55 MBAs before pulling the plug in 2002, when it became too difficult to travel to and from Egypt and raise money in the wake of September 11. "In order to have the impact you'd like to have, you need to have scale," says Sidney Harris, Georgia State B-school's outgoing dean. The school still helps to run marketing courses for Egyptian professionals in partnership with the Alexandria Institute of Technology. (The college gets help from the U.S. Agency for International Development, the government of Egypt, and others in running the program.)
Then there's the cost issue. Trying to charge $100,000 per person for an MBA program is nearly impossible, since most Mideast CEOs lacks sufficient training budgets. "The need is here, but the demand is price-sensitive," says Jim Abernathy, director of the Bahrain Institute of Banking & Finance (BIBF), a training institute run by the Bahrain government for its banking, finance, and insurance sectors. Abernathy has used DePaul University in Chicago to deliver a part-time MBA program to 39 of his students, and an additional 29 are enrolled this year. The cost is about $31,000, vs. around $50,000 for part-time students in Chicago.
The Darden School also teaches BIBF students, but it charges just $4,500 per week per person for its Gulf Executive Development Program -- half the cost of an 11-day course back in the U.S. And Jordi Canals, dean at IESE, says the fees his school charged in Egypt, about $6,000 per person, were bargain prices compared with the $24,000-plus that students pay for similar courses in Barcelona. "When you think about offering those programs in emerging regions, you never do this for money," Canals adds.
True, the real gain isn't in dollars. Schools say the value lies in making a difference. Eric Weber, associate dean for executive education at IESE, notes that to the "extent that you train the top management, and to the extent that top management understands management, this will filter through organizations and filter into the country."
IESE's message to Mideast execs is not just profits, he says, but corporate responsibility and ethics. To get that done, tact is critical. "We're not going with a short list of 10 things that have to be solved in Egyptian management, because that could even be seen as offensive," he says. "A management program will help you perfect your framework for making better decisions in all possible dimensions."
The ultimate reward for Western B-schools is that having a stronghold in the Mideast might help boost their repuations back home. IESE's Canals says part of his school's interest in Egypt was fueled by existing clients in Spain and France that are operating more of their business from in the Middle East and North Africa. The shift of production to the region is a slow one. It takes a lot of training and infrastructure to create call centers in North Africa, Canals notes, but "the right time to do [these courses] is now, because...it's going to increase," and existing clients could use the insight, he says.
With support from Egypt's Communications & Information Technology Ministry, the main sponsor of the IESE Cairo program, IESE doesn't run much risk of failing in its Egyptian venture. Other schools will have to work harder, since Arab managers are still skeptical of spending so much money to teach leadership skills. But if more executives give B-school a shot, companies may start to see improvements to their bottom lines and in their managers' business savvy. Then more Western B-schools might find a welcome in the Arab world.
By Mica Schneider in London