Business schools in emerging markets: why do they matter?

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True, the image that business schools have gained in the latter years is one of elitist and expensive institutions that train greedy executives and insatiable business people whose drive for profit has not only created an unequal world but also derived in economic catastrophes such as the financial crash of 2008. And while these interpretations may not be far from the reality, arguably, a different perspective is to see business schools as tools and drivers for inclusive and sustainable economies and development. Indeed, they can also train business leaders, managers, and entrepreneurs to be socially responsible and to lead innovation in business models, processes, products, and services according to a more positive set of values. They can also educate their students to nurture firms that value diversity, close the gender gap, commit to reduce inequalities and support the development of national economies according to the UN Sustainable Development Goals.

In fact, there are 15,000 business schools in the world, half of them are located in emerging markets, yet only around 1% of these are accredited by leading organisations such as the Association to Advance Collegiate Schools of Business (AACSB), the Association of MBAs (AMBA), or the EFMD Quality Improvement System (EQUIS). Interestingly, most of the recent accreditations granted by these institutions come from business schools in emerging markets. This situation triggers the curiosity to enquire about the kind of management education that is being diffused throughout the world, especially in latecomer countries.

Driven by this concern, Camelia Ilie (INCAE Business School), Guillermo Cardoza (INCAE Business School), Gaston Fornes (University of Bristol) and myself aimed to enquire how have business schools based in emerging markets developed and grown? What are their drivers, enablers, and barriers? How have they developed and overcome these? What strategies were adopted to achieve sustainable growth? How did they develop their academic and pedagogical capabilities? What capabilities did they develop to face the challenges of management education today?

Our study, which was published in the journal Sustainability, and aimed to reduce the gap in the understanding of business schools in emerging markets and their development. To do so, we analysed the cases of 7 of leading business schools in emerging markets located in Africa, China, India, Latin America and Russia. We conducted this analysis employing in-depth interviews with their deans or presidents, complemented with archival research, underpinned by theoretical and empirical research. Although anonymity was promised and the names of these higher education institutions cannot be revealed -as a measure to obtain reliable and valid results-, our findings are based on business schools usually recognised in world and regional rankings. The sample also includes a balance between young and more mature schools, privately and state-funded, some of them with strong ties with other business schools from the United States and others born as stand-alone institutions. All of them are accredited by at least one of the major management education accreditation bodies described earlier, which implies they are part of this 1% elite schools in the world and that they comply with international academic quality standards. Furthermore, we included cases beyond the traditional countries studied by emerging markets scholars -China and India-.

Our case studies highlight very interesting patterns, similarities and differences in terms of the national context and how these schools aim to serve their societies. While the study provides a very rich account and stimulating insights for every individual case, our analysis highlights the following:

  1. Despite the differing years in which they were founded, business schools in emerging markets aim to support the country’s development by training local business people with management knowledge, skills, frameworks and techniques originating in the global North, mainly the US.
  • We could identify four models of adoption and adaptation:

(i) direct adoption of programmes;

(ii) hiring of national citizens working in business schools from abroad;

(iii) systematic exchange with partner institutions; and

(iv) hiring of local practitioners working in the domestic market.

All these four models implied the adoption and adaptation of imported teaching and learning strategies, for which the governance model and structure of the schools had a clear impact.

  • Intuitively, the adoption process of the first model took longer than the faculty-led models (ii, iii, and iv). We argue that this was facilitated by the exposure of academics to the local and international realities, which became the drivers for building the capabilities required for this process.
  • Moreover, the opening of national economies was also a relevant factor that boosted the demand for trained business professionals who could lead firms to more competitive levels. At the same time, foreign companies venturing into emerging markets also needed trained professionals who could understand the business environments of both home and host countries and efficiently implement standardised management practices. This demand provided the financial resources that fuelled a sustainable growth path for these business schools and drove the upgrading of teaching and learning strategies to international standards.
  • Business schools in emerging markets seek international accreditation to build their reputation and legitimise themselves. The schools in our study that followed models (i) and (ii) had it easier as they already had the governance model and structure that understood the international standards language. In turn, the institutions following the other models sought help from international business schools to sort out this process. This allowed these schools to gain international recognition, although, as our interviewees emphasised, accreditation requirements do not seem to understand in depth the reality faced by this type of institutions in emerging economies. 
  • While business schools have grown exponentially, especially in emerging markets, as to ‘commoditise’ business education, the processes described above enabled the schools in our study to gain a new capability: compliance with international standards by adopting teaching and learning activities from abroad, but at the same time developing learning activities that reflected the domestic reality, taking the lead not only in supporting local firms with the challenges faced by their context but also in themes such as sustainability; inclusion, diversity and social change; technological management and disruption; innovation; start-ups and global networks.  

These findings suggest that the model set by leading business schools in the Global North has been adopted and adapted by business schools in the Global South, which has facilitated the boom of these higher education institutions throughout the world. The very few, top business schools in emerging markets that have managed to build a different path, as those from our study, likewise started by adopting and adapting the model, yet they increasingly developed the critical capabilities that allowed business schools from advanced countries to stand out: on the one side, attracting and retaining highly qualified faculty members and practitioners that work closely to firms, and on the other, designing their own learning and teaching activities to meet the local needs, but at the level of international standards.

Of course, this study is based on 7 of the top 50 business schools in emerging markets. It would be interesting to expand this enquiry to understand what other processes are at stake, the relationship between non-accredited business schools and the service provided to their societies, as well as the contribution to their business environments. More importantly, our study leads to reflect on the role played by international accreditation bodies and business schools in the global North, their power and influence in shaping (and globalising) management education, including their effects in training senior executives and managers from emerging markets, and their potential contribution to model sustainable societies across the world. Similarly, we should be thinking out of the box and envision what lessons and learnings we are missing by endorsing a ‘one-size-fits-all’ business school model that has not embraced the diversity, challenges, learning needs and strategies faced in other contexts.

This blog post was written by Juan Mondragon Quintan, Assistant Support Lecturer in Economics at UWE Bristol.