Business Schools Battle for Diversity

In a bid to attract international MBA candidates, business schools the world over are realising the value of opening their doors to diversity.  

In the Summer of 2003, President George Bush reduced the number of J1 and F1 visas available for international students to study in the US, whilst at the same time increasing the vetting procedure for the allocation of those visas. European business schools, with less stringent visa requirements, have traditinally been much more international in their outlook and profile. Many US Business School Deans felt shivers running down their backs, as European schools gained a further competitive advantage.

During the previous ten years, MBA programmes across the US had made a commitment to internationalise their student pool, the faculty at their school and the content of teaching materials within their programme in the belief that this was necessary to adequately teach "global business", whilst at the same time enhancing the reputation of their school. The Wharton School in Philadelphia had gradually increased its proportion of international students from 25% when Thomas Gerrity became Dean in 1992, to 46% in 2002 under the current Dean, Patrick Harker. The consequences of President Bush's actions are not to be underestimated. International students are a vital source of funding for US universities at a time when the US government is also cutting back Federal budgets and squeezing expenditure on education in favour of defence. In the state of California, the education budget for universities has been cut by over 25% during this presidential term. Visa cutbacks have been directed primarily towards candidates applying from India, China and the Middle East, however, processing delays have affected students from all countries, threatening their ability to take up offers.

The reaction of the top-ranked schools has been predictable.  "Wharton has cut back the proportion of international students to 30% of its class" says Patrick Harker. The school is heavily oversubscribed, so can easily fill places from its home market. Top European schools have been receiving applications from the best candidates around the world, further helping to reduce the quality gap between US and European institutions, if one still existed. INSEAD, based in Fontainebleau, France and Singapore, has a student population made up of 48 different nationalities, international participants constituting 90% of its class. Cliodhna Fullam, Marketing Officer at INSEAD says "every year we see better and better quality candidates applying to the school. But this year has been exceptional. We have travelled around the world recruiting on the QS World MBA Tour, and we have been truly impressed by the quality of people coming to talk to us. I am confident our class of 2004 will be our best class ever."

Some US schools are responding to the challenge by changing their recruitment strategy. There are certain regions of the world where visas are more readily attainable. MBA applicants from Europe still have little difficulty securing visas to study in the USA. As a consequence, more and more US schools are increasing the quotas for European candidates on their programmes.

Monica Gray, Admissions Director at Georgetown, says, "for the last three years, we have attended every World MBA Tour venue in Europe " 12 cities in Autumn 2003. We have seen an increase in European candidates on the programme. "With the Euro surpassing the US$1.20 mark in early December 2003, at the height of the recruiting period, the dollar has lost 31% since 2001". Christopher Redo, Assistant Dean for External Relations at the University of San Diego School of Business says, "The value proposition has clearly increased for Europeans seeking US based education."

Other US schools view the recent changes in visa restrictions as a chance to innovate. "Today, Thunderbird Europe offers more courses than ever before, and with distance learning projects and teleconferencing options in the pipeline, classrooms are no longer hampered by borders. With a foreign student population of over 60%, we viewed this as an opportunity to expand our global programmes, and allow students to complete their degrees outside the US. " says Cynthia Zoubir of Thunderbird. What are the benefits to an MBA candidate of having a highly international MBA programme? Douglas Dunn, Dean of Carnegie-Mellon (C-M) University argues "global business leaders today, need to be able to lead and contribute effectively to diverse teams in multicultural settings" A highly international class creates opportunities for teaming and sharing of cultural experiences." He adds that the experience of studying overseas encourages a willingness to embrace change as second nature and an ability to see opportunities to develop new entrepreneurial businesses (40% of C-M alumni start their own business).  AGSIM-Thunderbird in Arizona places an emphasis on learning new languages and mixing nationalities of project teams to maximise cultural as well as business learning.

Cynthia Zoubir at Thunderbird Europe says: "A truly (international) b-school must include soft-skills training in languages and cultural understanding, global job postings, an international faculty, overseas study opportunities, and worldwide alumni network ...not to mention diversity in the student body." Temple University and the Institute de Gestion Sociale, Paris France co-branded an International MBA in which the students, depending on their academic background, study four to seven months in Paris, six months in Philadelphia and one month in Tokyo.

But US schools in general are not that international in their make up of students or faculty. These 19 schools in table 1 are the exception rather than the rule. Notable absentees include Harvard Business School, with only 25% of the class originating from outside the US. Evidence suggests that parochialism is not reflected just in student numbers. Jarlath Dillon, Director of the MBA at IGS says "one of our professors at IGS, who teaches seminars at Harvard recently told me that he had, after years of trying, at last convinced the school to include a EU perspective within the law courses at the business school. The Dean of another major East Coast business school visited a few years ago. He nearly had to cancel his trip because he had not realised he needed a passport to visit Europe."

European business schools tend in general to be much more international than US schools. Chart 2 reveals that European schools have a far higher percentage of international students than their US counterparts. Whereas only six US schools have over 70% international students, over 40 European schools can proudly make this claim. If it were possible to pick one school as the most deeply committed to the international learning experience, it would have to be IMD. This small programme of 90 very experienced international managers, originating from 36 different countries, has a 1:2 student faculty ratio and professors from 21 different countries. Every class has an international perspective. WU Wien, Ashridge, Rotterdam and IMD all have over 95% of the class from overseas. Dean Hawawini of INSEAD confirms "INSEAD's strategy for the last forty years has been to build a truly global business school. In 2000 INSEAD opened a fully-fledged campus in Singapore, continuing to build on the school's multicultural philosophy, free of any dominant culture.

% International Students at N. American Schools in 2003 Hult90%Florida Int. Univ.81%Drexel75%South Carolina73%Brandeis72%Cal. State Hayward72%Hawaii Pacific67%Michigan State 65%Temple63%SMU 55%Montreal55%Thunderbird54%UCLA52%DePaul50%British Columbia50%Calgary45%Purdue 40%Ivey Western Ontario40%Emory  35% 

% International Students at European Schools in 2003 Wu Wien98%Ashridge 97%Rotterdam96%IMD96%Aston95%Strathclyde90%IGS 90%Leipzig90%Stuttgart IMT89%TSM85%Salford85% Edinburgh85% Oxford Univ. Said83%IE Instituto de Empresa83%NIMBAS83%Bradford80%LBS79%Solvay78%Manchester BS75%

The Bush Administration is under severe pressure to change its visa policies, and the situation may look radically different again a year from now. Whilst US visa restrictions continue, the proportion of international students and the quality of candidates at European schools are only likely to increase further. In March 2004, the World MBA Tour will visit nine European cities. All of the above featured schools take part in the World MBA Tour, which visits over 50 different cities all over the world during Spring and Autumn each year. Full details of dates, venues and participating schools are available on the website www.topmba.com, along with an on-line registration form.