Archive for July/2008

July 2008 | By Juan Pedro Gomez, Professor at IE Business School

They are about liquidity and a desire to invest millions in leading international banks in order to leverage the subprime crisis. They are sovereign wealth funds, the new focus of debate in the western world.

In February, the Qatary Investment Authority (QIA), the Qatar governmentâ??s investment fund, purchased between 1 and 2% of the Swiss bank Credit Suisse. More recently, rumours of investments by the same fund in the Royal Bank of Scotland increased the British bank´s share price by 5% on the London Stock Exchange on 25 February.

In January this year, Merrill Lynch and Citigroup received a total of $21 thousand million from sovereign wealth funds (SWF) from the Middle East and Asia. Overall, according to Morgan Stanley, since the liquidity crisis began in August last year, more than $69 thousand million have been invested by SWF in financial groups in developed countries. There is not the slightest doubt that the money has been welcome, not only by the banks (who continue to lower the market value of mortgage portfolios and their derivatives), but also by the market as a whole, anxious for liquidity and stability. So far, SWFs are heroes.
At the same time, leaders such as Nicolas Sarkozy and Angela Merkel have promised to protect their investors and managers from the “aggressive practices” of these funds.

The president of the European Commission, Durao Barroso, commented that “we cannot allow non-European funds to be used to carry out geopolitical strategies”. The European Commission has recently approved a proposal for the SWF to voluntarily subscribe to corporate government and transparency policies that are common in Western economies. And now, it would seem that for political managers and legislators they are villains.

Who is behind these funds? Are they a recent phenomenon? Should we be concerned about their movements? Are they heroes or villains? Read more…

In recent years there has been a marked increase in the use of multimedia materials in the educational sector. IE Business School foresaw this trend when it created its e-learning unit back in 2001 for the explicit purpose of the production of multimedia materials. The resulting games simulators, interactive graphs and tutorials serve to support onsite, blended and online programs at IE Business School. Innovation and interactivity are the basic principles that have led the unit to develop some 200 items in all areas of management. The growing quantity of multimedia material used each year is very well received by our students and faculty. For more information visit the online catalogue at www.ie.edu/multimedia.

If you wish to see, how the multimedia cases are developed and imparted, please watch this video.

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July 2008 | By Javier Roza, Professor at IE Business School

The alignment of markets and companies is an inevitable result of globalization, but a highly motivated team can gain competitive advantages by breaking the mould.

Let us accept for a moment that multinational business sets the latest trends in management. In this type of environment, country managers do not normally generate product innovation or communication on an individual basis; they are usually not even responsible for production, and in some cases they do not produce their own organisational design. In this situation, local responsibility consists of implementing the strategies developed centrally.

Let us also accept that countries in the same geopolitical environment have a similar level of development and that the consumer pattern is one of convergence. Enterprises also converge in terms of the brands and products they market. Systems and processes are also global. Even the type and quality of employees are becoming more and more consistent owing to the similarity of recruitment and promotion processes. And to cap it all, competitors are the same in each country, complete with globalised strategies.

Furthermore, technical capacities are increasingly reaching the same level. It is becoming more and more difficult to gain a sustainable competitive advantage through technology. When a new product triumphs, competitors rapidly appear with similar products and more competitive offers. Read more…

Prof. David Allen is talking about Leadership and his approach of teaching. Enjoy!

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As you certainly screened the market, you have seen a wide range of online MBA programs. Some of them are delivered in the often-believed only possible “download-print-out and study on your own” format. These kind of programs seldom involve interaction with both classmates and professors and you might get together just only for the exam period. This category of online programs falls under the Internet scheme – less intermediaries, less interaction with people and therefore cheaper.

When IE started to research and develop its own online methodology in 2001 the only premise was “How can we transform the physical classroom with the continuous and enriching interaction between students and professors into a virtual classroom maintaining the case study method maintaining the same or even higher level of quality?”
And with what we came up with, was an online platform with forums and private rooms (plus many other features) where students can discuss exactly the same cases as in the face to face programs. Team discussions are made in 2-3 days without any intervention from the professors and class discussions are done in another 2-3 days. So, a normal session in an online program last about one week instead of 90 minutes in a face-to-face program. Therefore, the dedication of the professor is higher than in traditional programs, being this a critical cost driver in online programs. The faculty we use for our online programs is the same as in the face-to-face programs, so they are teaching both methodologies. Additionally, class sizes are also reduced to about 30 students per class. So, the exposure of students to the professor is more relevant at the same time providing students in that way a higher interaction opportunity with an increased learning outcome.

To sum up, top quality online education follows the same price standards as the traditional methodology since there is no concession of quality. You can be sure of the same selection criteria and standards during the admissions process, you can expect the same student profile, you will have the same faculty as in the face-to-face program and, of course, we use the same cases for the class discussion.

IE Business School is set to invest around â?¬14 million in the former convent of Santa Cruz la Real in Segovia to convert the building and the adjoining land into an international business university equipped with state-of-the-art technology. The project aims to make IE University a European benchmark for quality.

 

The venue chosen for IEâ??s university project is the former convent of Santa Cruz la Real, a building which was declared a national monument in 1931 and is one of the architectural gems of the city of Segovia. The restoration project for the building, which is located by the city wall and is very close to the aqueduct, was presented at a press conference in July by Miguel Sagüés, IE Universityâ??s managing director, and the architects Fernando Serrano-Suñer and Ismael Rodriguez.

 

The whole restoration project involves five phases which will take in the buildingâ??s 18,000 m² surface area, in addition to a plot of land covering 30,000 m² adjacent to the former convent. Restoration work began a year ago on the communal areas of the ground floor such as the cloister, the chapterhouse, the refectory hall and the dormitories. This summer, work will focus on the universityâ??s lecture halls and include fitting automated lighting and sound systems in order to save energy while respecting the structure of the building. According to the architect, Fernando Serrano-Suñer, work on each of these two phases will cover a surface area of around 4,000 m².

 

After these first two stages, a third phase of restoration work will begin in 2009 and include a complete renovation project which will be presented to the Segovia City Council and the Heritage Commission during the next few days so that they can assess its feasibility. This phase will include work on the interior design and furnishings and will supplement the work carried out during the first two phases. It will also involve work on the outside of the building and the facades and a glass roof for the complexâ??s two characteristic courtyards. During the press conference, Fernando Serrano-Suñer insisted that the restoration work would â??respect the buildingâ??s heritageâ? at all times and stressed that in the case of the facades, which are at present in a very poor state of repair, the aim was to â??restore them to their former splendourâ?. Read more…

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Asia is showing an increasing interest in Latin American markets due to their abundance of raw materials, emerging internal markets, and macroeconomic stability, as well as ongoing globalization and market liberalization.

This reality has led two Sumaq Alliance members, IE Business School and the Getulio Vargas Foundation of Sao Paolo, Brazil, to organize the â??Executive Management Program on Latin Americaâ? for the International Enterprise Singapore (www.iesinapore.gov.sg) â?? an institution dedicated to the promotion of the Singaporean economy.  

These executive education conferences were developed at the request of International Enterprise Singapore, and attended by 15 high-ranking corporate directors of private and public sector Asian businesses.  For five days the program participants were immersed in the economic reality of the Latin America, a region with a GDP of 3 trillion dollars and double the population of the United States, making it the third largest economy in the world. 

 

â??Relations between Asia and Latin America are strengthening due to an increasingly larger and consolidated middle class in both regions.  There are significant opportunities in both regions for European players that know how to leverage these new trade and economic flows,â? says Antonio Montes, General Director of the Sumaq Alliance. (www.Sumaq.org)

 

The course combined discussions and lectures with a special focus on the economies of Mexico and Brazil, visits to companies such as Embraer or Natura, and activities designed to build networks among businesses in Brazil and Singapore.  Professors that participated in the event included Gonzalo Garland, Director of International Relations for IE Business School and professor of Economics.

 

“The crisis is having far less impact on Asian and Latin American economies than on European and American markets in terms of GDP, consumption and loans, hence gaining a foothold in these emerging trade flows is vital for the future of any business organisation. Establishing a business network with entrepreneurs from both regions is a challenge for many companies,â? says Professor Garland.

July 2008 | By Ignacio de la Torre, Academic Director of Master in Finance, IE Business School

Over the last few years, Madrid has managed to climb a few positions to become a more important international centre of finance, but in order to consolidate itself in a top position it needs to carry out a series of improvements.

At the beginning of the 13th century, the all-powerful England of King John (the baddie in the Robin Hood films) was defeated by an extremely modest France, which at the time comprised only Paris and the surrounding area. What was the secret behind the French success? London was an important political centre with a financial power that was on the decline, whereas Paris was a political centre of little significance with a financial power that was just beginning.

This mediaeval anecdote should help us reflect on our capital city´s role as an international financial centre. Paradoxically, in a context of political decentralisation in which Madrid has seen how its political power has been considerably reduced, the city has developed huge economic power in terms of GDP and GDP per inhabitant. The next challenge is to take advantage of this economic importance, “capitalising” on Madridâ??s position as a top-tier financial centre. A few weeks ago, Deloitte published a report that classified Madrid as the fourth-ranking international financial centre (behind New York, London and Paris). However, a report commissioned by the city of London on the basis of 7,193 surveys (many of them biased towards Anglo-Saxon markets) position Madrid in 42nd place in terms of international financial importance. In recent years, Madrid has enjoyed an economic and financial environment that has allowed it to climb many positions as a financial capital, higher than number 42 without a doubt. Nevertheless, the black clouds that hang over our economy, the deficit of the Spanish current account, the difficulties affecting the securities markets and the low-level volume of corporate transactions will force us to increase efforts if we want Madrid to effectively be among the top five financial capitals. Read more…

In conjunction with the FAS (Femmes Africa Solidarite) and the Spanish Government, the Center for Global Diversity in Management and the Department of Entrepreneurial Management at IE Business School has accepted twenty-two women from Liberia, South Africa, DRC, Mozambique, Senegal and Rwanda into the recently launched advanced training and mentoring program for women-lead businesses in Africa.The projectâ??s aim is to assist the female participants with the expansion of their businesses in African countries, growing the size and sustainability of the ventures and ultimately reducing the gap between male and female entrepreneurs.

Power of collaboration – Each of the four partners will provide specific resources to the project to help equip, empower, and connect the women selected into the program. FAS will operate through its Pan African Center for Gender, Peace, and Development (PAC) to provide mentoring networks to connect the women in open forums with relevant parties in their business sector to exchange ideas, and find support. Meanwhile, the Center for Global Diversity in Management, along with the Department of Entrepreneurial Management at IE Business School, will provide the training, strategies and tools to equip the women with the business plan development and IT skills they will need to develop their businesses. The Spanish government supports the project through its development initiative, the Program of Cooperation, a commitment to fight poverty and aid Africaâ??s development primarily in Senegal, Mozambique, and South Africa. In addition, the Maputo Declaration, created during the Women for a Better World Meeting in March 2006, has created a partnership between African and Spanish women working together on common issues, primarily in Senegal, Mozambique, and South Africa.

Facilitators and the selections Process – The FAS selected six facilitators from the each of the six countries to help with the implementation of the project in these nations. From January 11th to January 12th of 2008, IE professors from the Center for Global Diversity in Management and the Department of Entrepreneurial Management held a training workshop to prepare the 6 facilitators to recruit and select participants for the program. The facilitators subsequently identified potential candidates, and gathered information on the social, political, and economic situations of their respective countries. Assessments were made of the financial management skills of applicants, as well as the potential scope for development of the businesses selected by the in-country facilitators. Based on these preliminary evaluations, FAS and IE reviewed all candidates and selected the final 22 candidates for the program after evaluating each individualâ??s business and capacities for expansion, in addition to the socio-economic condition of the candidateâ??s country.

Ignacio de la Vega, Professor of Entrepreneurship and Strategic Management at IE and one of the faculty on the program discussed working with the candidates, â??The teaching experience of working with a talented group of African women entrepreneurs was extremely enriching. I could really see how critical the human factors are in Entrepreneurial activities and how important it becomes to marshall and obtain very scarce resources within this region. Their spirit to achieve their goals and overcome major difficulties is just incredible. I fully expect that these initiatives can contribute to the improvement of conditions for women in Africa and to contribute to the sustainable generation of wealth and employment.â?

Mentors provide support – Mentors have also been chosen to support each of the participants. Women entrepreneurs who are all ready established in the six African countries will serve as mentors, assisting participants with their business plans, and providing advice and support.

IEâ??s Center for Global Diversity in Management is supported by the IE fund, a non-profit organization that is dedicated to the promotion of sustainable development through business education. The Center works to provide programs and tools to aid the advance of women in management all over the globe.

â??African countries offer complex and exciting business opportunities,â? stated Javier Amazega, Director of Development for Middle East and Africa, â??We hope that by aiding these entrepreneurs in capitalizing on these business opportunities, we can start to promote the sustainable economic development that will carry Africa through the transition into an emerging market.â?

Role of MBA Students â?? International MBA students from IE Business School have volunteered to assist these entrepreneurs in the process of creating and refining their business plan. After a selection process, students were matched with entrepreneurs according to skill, need and preference. The IMBA students, assisted by Professors of the Entrepreneurial Management area, provide a more balanced focus in the development of the Business Plans, a necessary condition for success. These new teams collaborate in the development of a business plan, providing different perspectives that lead to stronger documents, by incorporating the needs of the customers, of the entrepreneur but also of the investor in the venture.

在6月初上海举行的全球商学院院长圆桌会议之前，IE商学院院长Santiago Iniguez和Tuck商学院院长Paul Danos在上海浦东君悦大酒店接受了新浪财经频道采访，以下为全部视频和谈话文字内容。
Prior to the Dean’s Roundtable in Shanghai this June, Dean Santiago Iñiguez and Dean Paul Danos from Tuck School of Business had a joint discussion at Sina, the leading Chinese portal, about how overseas business schools are developing synergies with their Chinese counterparts in the fields of research, programs, and teaching/learning processes, aimed at helping equip Chinese students with more sophisticated cross-cultural capabilities and skills in the global context.