Teaching methods in Latin America closely mirror those used in most U.S. business schools, unsurprising given the role of U.S. universities in the development of executive education south of the border.
After a decade of robust economic growth, Latin America’s leading business schools are building on the region’s newly won reputation for business smarts and financial prudence. Although they might yet not compete with the big schools of Europe and North America, they are proving to be increasingly viable alternatives for executives throughout Latin America and beyond.
Although courses in business administration have a veritable tradition in the United States – the Tuck School of Business at Dartmouth College began to offer the world’s first master’s degree in business administration in 1900 – the MBA truly began to become a global phenomenon only during the long post-war economic boom, when leading U.S. schools began to export their model of executive education to campuses in Europe and Latin America.
But while schools in Europe thrived and now rival their U.S. forebears in prestige and might, the development of business education in Latin America was checked by 30 years of economic and political instability, says Dr. Jorge Talavera, dean of the ESAN graduate business school in Lima, Peru.
There were some benefits.
The uncertain times “prepared people and professors to face unusual problems,” adds Armando dal Colletto, dean of Business School São Paulo. “Some creative solutions came from that time,” he adds, some of which could now apply to the debt crises and stagnant growth facing developed economies.
However, times are changing. Latin America is now an important motor of the world economy – and one that has survived the global financial crisis largely unscathed. And its business schools are beginning to pitch their claim to executives throughout the world.
Chile’s leading business schools – such as Adolfo Ibanez University and the Pontificate Catholic University in Santiago – are living proof of how Latin America’s improved fortunes can benefit a school’s reputation.
Twenty years after the end of the Augusto Pinochet dictatorship, Chile has ushered in its first democratically elected right-wing government in half a century, while its economic model remains largely unquestioned and its companies go from strength to strength.
“Chile is an extraordinary example for the region, and the experience in Chile sells very well abroad,” says Hernan Palacios, director of the Catholic University’s MBA UC.
The school environment plays a very different role at Central America’s prestigious INCAE Business School. According to Dean Guillermo Selva, the live-in experience enjoyed by students in the Global Executive MBA program sets the school apart from its competitors. Students spend one week a month studying at the school’s Francisco de Sola campus on the forested outskirts of Managua.
Set up in 1964 by teachers from the Harvard Business School at the behest of U.S. President John F. Kennedy, the school usually is listed near the top of any ranking of regional MBA programs. With lodging, catering and even laundry service provided on-site, executive students can fully immerse themselves in study from Wednesday to Tuesday, including the weekend.
“They really have time to think and to dream… and to learn from the teachers and each other. This is what they remember about the course,” Selva says.
Then, unburdened with homework, they return to their careers and home life to stock up on real-life experiences to share when they return to classes in three weeks’ time.
Most executives planning to take time out to study, however, usually are interested in what happens inside the classroom.
Teaching methods in Latin America closely mirror those used in most U.S. business schools, unsurprising given the role of U.S. universities in the development of executive education south of the border. At Peru’s ESAN, teaching staff draw heavily on case studies in the classroom, reflecting the role the Stanford Graduate School of Business played in its founding half a century ago, Talavera says.
But in other ways, Latin American schools vary in focus.
INCAE, like its Costa Rica home, has developed a reputation for sustainable development, a specialization that attracted students from across Latin America and beyond.
In Argentina, IAE is trying to stand out by flagging its strength on developing economies. “We want to be known as the school which knows the most about emerging markets in Latin America,” says the school’s dean, Marcelo Paladino.
Santiago’s Catholic University prefers to focus on the development of soft skills required by modern business executives, such as leadership and negotiation, rather than fields of knowledge such as finance or marketing.
“We are looking to produce chief executives,” Palacios says.
But curricula require constant updating, especially given the hair-raising turbulence seen over the past five years.
At INCAE, course material has been tweaked to put greater emphasis on the globalization of the economy, as well as on issues such as corporate ethics and sustainable development, Selva says. More external teachers are being recruited so students can better understand the threats to modern society.
“Although this is experiential learning, we don’t want them to lose contact with the world outside,” Selva says.
At UC in Chile, they are planning a complete redesign of the MBA program to be implemented next year to reflect not only changing circumstances but also executives’ shifting priorities.
“Fifteen years ago, few MBA students thought about starting their own business; today everyone wants to be an entrepreneur. That’s been a major change,” Palacios says.
But others contend that business schools need to be more imaginative in dealing with new challenges. IAE’s Paladino notes that MBAs rarely consider the impact companies have on society and vice-versa – a key issue in emerging markets.
“Most business schools are totally asleep on these issues and have no answers,” he says.
With change becoming ever more rapid, schools are increasingly teaching executives not how businesses overcame hurdles in the past but how to tackle new situations on their own terms.
“The challenge for executives is to face new problems that are not solved by old methods and need new and innovative approaches. … Companies need to be learning organizations that adapt to their environment,” says Sao Paulo’s Dal Colletto.
Although Latin America’s business schools are attracting more attention overseas, they still are not competing directly with the big U.S. and European schools.
The huge difference in fees means the schools are largely angling to different markets. Schools in Latin America often lack the infrastructure and technologies enjoyed by global powerhouses. Still, there is increasing overlap.
Faced with limited demand at home, European universities have become more aggressive in recruiting in Latin America, especially leading Spanish business schools such as ESADE and IESE, because of the common language, says Dr. Laura Zapata, director of the MBA programs at Monterrey’s EGADE Business School.
In response, local schools are planning to take the fight to the competition. Selva reveals that INCAE is investing in cutting-edge technologies and faster admission processes in order to begin recruiting directly in Europe and North America.
And regional schools’ much lower fees could be a selling point to cash-strapped Europeans and Americans.
A two-year course at a top business school in Latin America costs about $30,000, compared with $100,000 for an American MBA. And despite recent inflation, life in Buenos Aires, Lima or Monterrey costs much less than a year in New York, London or Paris, notes EGADE’s Zapata.
Growing links between schools in Latin America and schools elsewhere also help break down the barriers of geography.
All the leading schools have agreements in place allowing students to obtain a double degree from a leading European or U.S. school (at a fraction of the price) or spend part of a course abroad.
Such deals are likely to become more important in the future.
On April 26, the Yale School of Management announced the launch of the Global Network for Advanced Management, the first MBA club to combine schools from advanced and developing economies to create business leaders for the transformed economic landscape. As well as France’s INSEAD and the UK’s LSE, the elite roll call also includes four business schools from Latin America: INCAE, UC, EGADE and Brazil’s FGV Business School.
“It’s a great honor to be invited,” says INCAE’s Selva.
A DIPLOMA FOR THE FINANCIAL WORLD
A specialization in international financial markets and the rapid growth of the field created a need for certification for professionals who sought to advance in their careers and to establish a benchmark for excellence and international conduct. The Institute of Chartered Financial Analysts emerged from the original Federation of Financial Analysts a decade after its creation in the United States in 1947, and work began to organize the course. Today, the CFA Institute is a nonprofit international association of investment professionals that grants the CFA (Chartered Financial Analyst) Certificate and the CIPM (Certificate in Investment Performance Measurement).
What is interesting about these certifications is that they are international, allowing those who obtain them to operate in any market in the world. The exams are demanding, and the course is carried out through distance education, specifically to allow financial professionals the option of carrying them out without having to take a break in their careers, as is the case for the majority of master’s degrees in other specialties.
In order to register, a student must have four years of qualified experience in financial markets, a university degree and must be able to speak English, the language the course in which the course is taught.
The CFA establishes two dates each year to take the exam in each country where it has representation. The program currently has a network of 135 associations in 58 countries. In June 2012, for example, the exam can be taken in more than 90 countries, including Argentina, Brazil, Chile, Colombia, Guatemala, Mexico, Panama, Peru, Puerto Rico and Venezuela.
In Latin America, the following universities are members of the program:
• INCAE Business School (Alajuela, Costa Rica).
• Insper (São Paulo, Brasil).
• Instituto de Estudios Superiores de Administración (IESA) (Caracas, Venezuela).
• Instituto Tecnológico Autónomo de México (ITAM) (Ciudad de México, México).
• Instituto Tecnológico y de Estudios Superiores de Monterrey (ITESM)- (Monterrey, México).
• Pontificia Universidad Católica de Chile (Santiago, Chile).
• Pontifícia Universidad Católica do Rio de Janeiro (Rio de Janeiro, Brasil).
• Universidad Adolfo Ibáñez (Santiago, Chile).
• Universidad del CEMA (Buenos Aires, Argentina).
• Universidad del Pacifico (Lima, Perú).
• Universidad de San Andres, Facultad de Administración (Buenos Aires, Argentina).
• Universidad Torcuato Di Tella (Buenos Aires, Argentina).
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