This is the unedited English version of the interview to John Fernandes, CEO of AACSB (The Association to Advance Collegiate Schools of Business), originally published by AméricaEconomía on October 21st, 2013.
John Fernandes, CEO at AACSB
As CEO of AACSB, John Fernandes shared his take away and expectations about some of the most important issues discussed at the Conferece of the Latin American and Caribbean Advisory Council (LAAC), that was celebrated in Mexico on August, 2013.
LAAC’s main goal is to support Latin American Business Schools, not only those accredited by the AACSB but the total amount of the almost 2000 schools offering programs in the region. The LAAC will gather again this November 2014 in Lima, Peru and later in Buenos Aires, Argentina, in June 2014.
What were the main voices represented at the LAAC Conference in Mexico, and what were the main debated issues?
As we discuss AACSB’s inaugural Latin American and Caribbean Annual Conference (LAAC) held in August, I will be referencing the top business schools across all of Latin American and the Caribbean coming together as one. Such schools are institutions that are financially equipped, and sufficiently developed to be able to join the best-of-the best in conversation. Unfortunately, there are still many schools in Latin America that are not familiar with AACSB, or are not at a point where they can participate in such an event.
In total, we had eleven countries represented, with more than 80 attendees – which was a great turnout, as we had counted on maybe slightly more than 70 schools represented. So, when discussing viewpoints of attendees to this Conference, you are getting a viewpoint that is coming from the elite business schools, not necessarily those that make up the 2,300 schools across the region.
AACSB Accredited: EGADE Business School, Tec de Monterrey
EXCITING TIME IN MANAGEMENT EDUCATION
The biggest issue we discussed at the conference is that right now it is an exciting time to be a business school in Latin America. In many countries across the region, such as Mexico, Columbia, Peru, Chile, Brazil – maybe not as much yet in the Caribbean – the economy is booming with significant growth in GDP and substantial activity of business, so there is demand for students to fill those positions. This puts business schools in a key position, as what they are doing can make significant impact on their economies. Such an opportunity is very intrinsically rewarding and very productive for the business schools. They are training and graduating students that are immediately going into booming economies to make a difference.
Business schools across the region are excited about being in this position, and are trying to do the best they can for their students, and for business needs. At the same time they are also very concerned about their countries because they know that most are still, primarily, in the extraction business. They want to help transition their economies to eventually become service economies, not focused chiefly on extraction (because in the long term that will start to run out).
In that, it’s very important for these schools to graduate individuals that will help build the fabric of the economy to expand past extraction to the point of providing higher level services. As leaders of the community, this is something that business schools can do, but they would have the capability of doing it much better by having a better number of academic faculty.
Let me explain what I mean by that: when you have someone from industry teaching a course, mostly what you have is a business person teaching what a student can read via a textbook, and what the individual knows hands-on from doing their job. It’s not necessarily teaching the individual how to think critically in abstract business situations or in a different point of the economy’s development. If I’m a manager from a mining company in Peru, and am teaching a management course, I’m most likely going to focus more on the current, contextual viewpoint and convey that to students. If am an academic I would approach it from both an extraction viewpoint, as well as how it should be in a service economy or other industries. Such a narrowness in the development of students worries me, to some extent, and how that occurs in a vast majority of schools in Latin America. However with all things said, it’s a very exciting time because business schools are graduating people right now that will make a difference from day one, and this has a significant impact on the economy.
DOCTORAL FACULTY SHORTAGE
AACSB Accredited: IAE Business School, Argentina
Another thing that comes out of the conference is that the schools are uncertain about what to do regarding the lack of PhD programs. I hear from many: “We are not growing academics; we don’t have the funds to produce PhDs; it’s difficult to recruit faculty members from other regions to come in; our programs are mostly in Spanish so we have to recruit people that a) have their doctorate, and b) have Spanish skills”. As a result, many are facing frustrations about finding doctoral faculty. Currently most institutions do not graduate them internally and find that it’s hard to import PhDs from other countries—such individuals that are Spanish speaking are expensive and budgets are tight, there is certainly a global shortage of doctoral faculty across the region. They are battling for very few spots, and unless a school is well endowed financially, it’s very tough to address the problems that we’ve discussed.
There are many that attended the LAAC conference that want to seek the AACSB accreditation, but yet in doing so they know they will have to build their academic faculty and better balance the academic versus practicing ratios. It’s not that practicing faculties are bad, they are valuable, but you can’t have all practicing part-time faculty filling the roster of professorships. To build a good business school, institutions must have both academic faculty and practicing faculty, (mostly full-time, some part time), and that’s a big challenge for many of the schools in the region.
So, these are exciting times due to the growth of the economy, and because of the number of higher-education aged students in Latin America is quite high. Comparatively, (and unfortunately), this level is at a bit of a decline in Western Europe and is pretty much flat in the USA (maybe with a little bit increase). But Latin America and the Caribbean, the higher-education aged students are keeping a good pace with those in Asia, the Middle East and Africa. So there’s a big pool of students to pull from, which it is exciting for the schools too.
But then they sit must back because they “don’t have the faculty”. It’s challenging for them yet exciting all at the same time.
Among the topics of debate at the Conference there was “the evolving trends on management education”. How updated is the academic curricula at Latin American B-Schools to fit the new 2013 standards?
The new 2013 standards that were approved by the AACSB membership are very good for Latin America. Let me provide a few examples:
For the first time, executive education programs are part of the standards. Executive education is very important in Latin America, and this inclusion will help to both grow and improve quality of exec ed programs at the global level.
Another very important and relevant change, is how the standards approach the appropriate composition of a “leader”. We have always said that “leaders” should be ethical, but now we say they should be ethical but also socially responsible in their communities. In society today, it is important that leaders and their companies get back to the community. Thoroughly we are saying that leaders should make sure that they are ethical and sustainable, that their organization is ethical and sustainable, and that each are not doing short-term “fixes” that would hurt in the long run. Also, that business must consider ways to develop, or improve, their environmental sustainability practices.
AACSB Accredited: Fundação Getulio Vargas, Brazil
Through the 2013 Standards, AACSB is saying that this is what we, (business schools and society as a whole), need to emphasize to develop leaders, to make sure they have the necessary fabrics in them from their first day on the job. Many individuals are dealing with governments and sometimes practices that don’t operate in accordance with these traits of a leader, or at least not consistently. Our membership felt that it was very important that these be included in in the new standards, to help institutions change their curriculum to better build responsible leaders.
There is also an emphasis on strong teaching, and an emphasis of the standard on assuring student learning through program improvements that assurance of learning practices. The whole umbrella of the standards says that you should follow your mission, be very clear about your mission and seek to be innovative, and be engaged with business practice – which many already are today.
The point is that the standards are going to a direction that is helpful for Latin American Business Schools. The only downside is that there is still a large requirement of doctoral faculty, and that’s where the standards hurt. The standards also have intellectual contribution requirements, but currently most of the faculty within the region are teaching part-time, and they not have the opportunity to provide such items. These are generally research, papers, or other innovative techniques that come out of a business school, most often as a product of a full-time faculty.
By and large, the schools in Latin America that embrace the new standards will find them very helpful. The only one that we are still seeking answers for right now is the faculty challenge—which in the short run will probably deter many schools from seeking AACSB Accreditation.
As an organization, we have to figure out how this can work – how can we modify the faculty requirement so we can get more schools from Latin America (or other emerging economies) more involved. It is a difficult question to answer, because accreditation needs to be fair to all. As an organization, we have to think about whether we should develop something else that would be very similar to accreditation, but maybe not at the same level of faculty requirements.
Can we expect a greater engagement of the AACSB with Latin American B-Schools? In case there will be, will the AACSB take a more “hands-on” role helping B-Schools to improve the quality of the education offered?
Among one of our initiatives for the region has been the development of AACSB’s Latin American and Caribbean Advisory (LAAC) Council. The LAAC Council was established with the goal of improving AACSB’s support to those within management education in Latin America and the Caribbean regions. We realized that AACSB has many top schools that are part of our accreditation family, but what about the other 2,200 or so that could benefit from our membership services, thought leadership initiatives, and professional development opportunities?
Today, AACSB is set up better to help schools that have more balanced faculties, more balance of full-time/part-time students, or schools with a rich or historic academic tradition. What we’ve found is that most business schools in Latin America have more of a practice relationship, where business people tend to be part-time students. Aside from the 16 accredited (and approximate 8 to 10 in process), most business schools within the greater region do not “look” like AASCB schools worldwide in terms of curriculum and structure. So it is up to AACSB to establish how we can better work with this large number of schools, to find out what they need, and determine how we might be able to help them.
AACSB Accredited: Universidad Adolfo Ibáñez, Chile
We realize that most schools cannot just change their structure because we come in and ask them to have 40% scholarly academics and 10% practice academic faculty, or tell them you must have scholarly practitioners, etc… I anticipate that most would answer they are lucky to have faculty. So as an organization serving management education worldwide, we need to find out how we can structure our services to help this vast majority of schools. Most likely, it will be different in many ways than the services we provide to the more developed nations’ school faculties.
There’s a lot of listening going on now. We are making great efforts to encourage schools to become members of AACSB. We are doing more things in Spanish for this demographic—items such as a website, or even more articles printed in Spanish. This August we offered the inaugural Latin American and Caribbean Conference, which is going to be every year. We are also doing seminars in Spanish about business accreditation and about improving teaching effectiveness… The intent is to do a lot more professional development services like those as well. I’m excited to see the results of the work that is being put into place by the LAAC Advisory Council. Lead by Fernando Antonio D’Alessio, director general of CENTRUM Catolica, the Council has already provided an immense amount of insight and guidance, and the LAAC conference and seminar serve as a small sample of what we would like to do to help schools.
But in the long run, AACSB still has an obstacle it must overcome in its efforts to help schools across the region. We have an accreditation model that was built for a very mature business school market, but most of Latin American business schools are young, and are practitioner taught. As an organization we have to find a way to help schools to continuously improve, but at the same time respond to their faculties’ makeup.
Currently AACSB does not have quality insurance product (or even certification) that works for schools that are more practitioner taught. Part of our job for the next couple of years will be in studying schools – not just those in Latin America and the Caribbean, but many countries in Asia and Africa – that do not have the faculties to participate in or benefit from AACSB Accreditation.
Pankaj Ghemawat, author of World 3.0 and professor of Global strategy at IESE, has stated that Business Schools have a crucial role in economic development and thus societal progress, because they are directly involved with the education of the business sector professionals. He points to the fact that there are only a limited number of schools –those in the rankings- offering the kind of state-of-the-art education that students need, and most of poor countries can’t offer it to its population, so the poverty cycle repeats itself. What do you think it’s the current situation in this sense in Latin American countries? How could, or what do you think the AACSB could do to support the quality of business education in Latin American, improving or balancing its standards?
We as an organization need to be much better at serving emerging economies. It is incredible the shifts that are occurring in both the economic cloud and also student volume cloud that is coming from emerging economies. It is much greater than in some developed economies.
AACSB is built out of a “developed nation” status, and as a result, it is causing us to retool our own models so that we are relevant with emerging economies’ business schools. This is very important with the organization’s mission long term. As for the Latin America and Caribbean initiatives, such as the LAAC Council, we are focusing on Latin America, but a lot of what we are learning there will help us worldwide.
The Council is made of deans from eight or nine of the top schools of the region. Unfortunately this small number doesn’t represent the vast majority of the schools, but it is a start. But, the leaders of the Council operate in the environments that all of the Latin American or Caribbean schools are in. So they understand the needs at those schools that are not with AACSB, and thus far has done a good job. A strategic plan has been approved by the board, and the Council will meet two more times within the 13-14 academic year – once in Lima, Peru, in November 2013 and then in Buenos Aires, Argentina, at the end of June 2014.
The Council is doing well, and there’s a lot to learn from emerging economies’ business schools. Such institutions are right on the front lines producing students, and are looking at innovations in a very open business environment. I think developed countries will soon learn a lot from emerging economies about the innovations they are making, because their economies are a lot more flexible right now. It encourages doing things differently as opposed to “this works so let’s keep doing it this way”. It’s an exciting time for business, and for business schools in Latin America.
There is competition between Business Schools in Latin America, while the context gets more globalized with increasing internationalization. From the time you shared with deans from the top business schools, would you expect to see more collaboration with each other, or are they more inclined to compete with each other? Can we expect more faculty exchange or joint programs?
As it relates to collaboration, the best schools in Latin America have strong international collaborations outside of their regions. But what I’ve sensed, within their local region, it is different. The August LAAC Conference was held in Mexico City. The city itself has three world class business schools –ITAM, Ipade and Egade. As a part of the conference, we invited the deans from each of the local schools to a dinner to speak with our Council’s members. I think there’s a high likelihood that this dinner was the first time most of them had ever have gotten together. And I think that’s the case in most every Latin American country—the top business schools know who each other are, but they do not usually have the opportunity nor make an opportunity talk to each other.
AACSB Accredited: Universidad de Los Andes, Colombia
So one of the benefits of the AACSB is, (and I’m not making a sales pitch!), is that we provide a platform for them to all come together. There they start talking, find out what each other do, and start expanding campuses…they talk a mile a minute with each other and you can see that they love it. I think these schools have very strong collaborations with international partners and intercontinental partners, but within their country or region, there are still very few acts of collaboration. What they tend to do is decentralize their campuses so they can serve multiple regions as opposed to establishing collaborations locally. That’s very expensive, to move faculty.
One of the benefits that AACSB will have throughout this process is our power to convene, to bring people together. The Latin American Council has brought together LA schools for the last years. But now through our new efforts, we will be able to bring together even more schools, which will encourage a much higher level of communications, cooperation, and potential collaborations for the future.
AACSB has been around for almost 100 years here in the USA, and as a result, we have always served that role. Through our outreach efforts we have served that role in Europe for the past 15 years, and Asia for the past 5 years. But we haven’t done too much of this in Latin America. But now it is time to begin to bring schools together, which in the end is going to help them.
Corporate voices keep repeating that there’s a talent gap – mostly in the Centro America region but not exclusively- and it is hard to find and retain high skilled workers, even for administrative positions, marketing, finance, etc. What are business schools doing to help tackling this need? Was it a topic discussed at the Conference?
This is not only happening in Latin America, but it’s happening in emerging economies all over the world. Big multinational corporations enter in with a sophisticated level of management and they hire locally. I hear CEOs saying, half the people we have to fire, and the other half we have to completely retrain them. We are not getting what we need out of the schools.
Then they look at their practices and realize none of the schools that they are working with or have recruited from are accredited. This means that nobody is reviewing the institution to make sure the business program is providing a state of the art education, or even simply meeting learning goals… so of course that is going to happen.
AACSB Accredited: INCAE, Costa Rica
The schools that met at our conference all know this and are trying to produce better and better students. Unfortunately, that’s only 60 or 70 schools that attended, plus the 16 that are accredited. This is going to keep happening, as there are more than 2,200 schools in the region. Business is going to keep having situations where they hire graduates and they are going to be disappointed, and they will have to retrain or replace. This cycle will not get any better until more schools get serious about improving their quality. And what forces them to improve quality is an external review process, such as the accreditation process. This requires schools to be reviewed against a set of standards every 5 years, and benchmarked against other schools in the institution’s peer group … and that’s globally.
Another problem that corporations have in all emerging economies is that they all want the same quality of graduates. But just as I described, business schools that are not focused on improving their quality, produce an uneven quality of graduates. This is a problem, but it’s yet to be fixed. And in circumstances such as the Latin America region, having less than 1% of schools accredited is very low. It just can’t continue to be that way.