Special Report November 2, 2009, 11:12AM EST

How Western Business Schools Should Play Asia

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We predict that by 2020 the most successful EMBA programs will be those that are taught across multiple continents, include at least two Asian locations, and are the product of a formal long-term collaboration among two or three business schools, each with its home base at one of the teaching locations.

immersive stays in Asia are essential

Our logic is straightforward. First, in order to excel, managers need deep, on-the-ground understanding of the world's major economies. In most cases such understanding will be better provided by local experts than by a faculty member based in the U.S. or Europe on a short visit to the foreign location. Second, ambitious managers also need tight interpersonal linkages with colleagues who are native to, grew up in, and are embedded in these economies. These linkages (in terms of both number and strength) are most naturally developed when the EMBA student undertakes the entire 18-month program with a cohort of peers rooted in different economies and cultures. Third, by leveraging the geographically complementary resources, relationships, and reputations of partner schools, collaborative EMBA programs are likely be both more effective and more efficient on all key dimensions: marketing, the teaching-learning process, operations, and placement. Finally, students who graduate from dual-degree programs (such as the INSEAD-Tsinghua EMBA or the Kellogg-Hong Kong UST EMBA) will have the added advantage of lifelong memberships in different and non-overlapping alumni networks across two or more continents.

Given their short duration and near-complete freedom from institutional constraints, nondegree executive-education programs offer Western business schools the greatest degree of flexibility. A business school's Asia strategy for these programs should be extremely market-centric and tailored to the peculiarities of each specific country and, if need be, even a particular industry within the country. Even questions such as whether or not to partner with another institution (such as a business school, a government agency, an industry association, or a law firm) should be viewed as tactical questions to be addressed on a case-by-case basis.

For many of the leading Western business schools, the toughest issue regarding nondegree executive-education programs pertains to pricing. Notwithstanding the fact that companies such as Tata Motors (TTM), Infosys (INFY), Huawei, and Haier are large global corporations by any measure, it is critical to remember that they are creatures of an extremely cost-conscious environment. More often than not, a lower cost structure is also one of their primary sources of global competitive advantage. As a result, they tend to be price-conscious buyers and tough negotiators.

western b-schools must prove their premium

Whether or not a Tata Motors or a Huawei will be willing to pay a premium price to a Western business school—relative to a top-tier local school—will depend entirely on two factors: one, whether or not the Western business school can make a persuasive case that it offers added value; two, whether or not it brings brand cachet as a "thought leader." Faculty from a top-tier local school will almost always bring a better understanding of the local environment. The Western business school must be able to prove that the expertise of its faculty on globally important subjects will more than compensate for any weaknesses in local knowledge.

Partnering with a local school on an as-needed basis can be another strategy to address this weakness. Aside from making the case for added value, it is also important to note that premium pricing is impossible without a top-tier brand image. Even schools such as Harvard, Wharton, or INSEAD that enjoy the highest rankings in global surveys need to keep investing in brand-building efforts. Several of the leading local players in countries such as China, India, South Korea, and Singapore are extremely ambitious. They are also rapidly building the financial muscle to recruit top-tier PhD graduates and faculty from Western business schools to try to leapfrog into the ranks of the leading global schools.

In sum, Asia is different, diverse, and dynamic. To Western business schools it offers vast new opportunities but also serious competitive challenges. In designing their Asia strategies, business school deans need to undertake the analysis for each product line separately. They should also never forget the central maxim of business strategy: If you don't have a competitive advantage, don't compete.

Anil K. Gupta is the Michael Dingman Chair in Global Strategy & Entrepreneurship at Smith Business School at the University of Maryland. Haiyan Wang is Managing Partner of China India Institute, a research and consulting organization. They are the coauthors of Getting China and India Right (Jossey-Bass/Wiley, 2009) and The Quest for Global Dominance (Jossey-Bass/Wiley, 2008).