Archive for January/2009

January 2009 | By Rafael Puyol, Professor at IE Business School and President of IE University

Pride in a language is not compromised by using English or Spanish, the worldâ??s two most important languages. Holland shows Galicia, Catalonia and the Basque Country how itâ??s done.

Last week, an academic commitment took me to Amsterdam, an attractive city with a human face and an excellent selection of cultural options. I had not been there for several years and as soon as I landed in Schipol, I was pleasantly surprised by two things.

The first was that, besides their own language, all the Dutch speak excellent English. It doesn´t matter whom you speak to, where you speak to them or why you speak to them. Most educated people speak English, but in a taxi, a restaurant, a museum or in the street, it is spoken by drivers, waiters, porters or the police, and that defines Holland as a modern, international country.

The second pleasant surprise was the large number of people who can or try to speak Spanish. They do not feel uncomfortable when they speak it. They like to speak to Spanish-speakers in Spanish, whether to talk about the place they know or the fact that Real Madrid has five Dutch players or to comment on the way the Spanish national side play and even how they are capable of beating the Dutch. Read more…

This is a short interview with Owen Fernando from Indonesia who started his International MBA at IE in November 2008.

What was the motivation to start your MBA at IE Business School?
I am originally from Bandung, Indonesia, and have spent most of my life working in Jakarta and Bandung. For the past four years, I have put my efforts in starting and building up my own company, majoring in commercial printing service. This entrepreneurial experience has a big impact on my business attributes. However, the more I immerse myself in the business world, the more I feel the need to broaden my horizons as it is significantly becoming an urgent matter.
In the business world, while so many changes take place really fast, some do not, such as the need of skillful leaders who can guide organizations through difficult times and take advantage when everything seems against them. This point of view has motivated me to start an MBA program. I need to learn, comprehend, and incorporate the best management skills and I need to do it now. So I started my research on top tier MBA schools, tried to find out the student life and culture, collected information on what programs they offer, and established contacts with alumni.
Fortunately, I was in contact with Dirk Höpfl, who helped me out in handing me valuable information about IE Business School. I was deeply intrigued by IE’s reputation. It is one of the world’s best business schools, well-known for highly entrepreneurial environment (it was founded by young entrepreneurs), offers both intensive, 13-month, and innovative MBA program, and has the most diverse academic community. This school is exactly the school I want to be graduated from, and I am very proud that I became a part of IE’s academic environment.

As an entrepreneur, how much you can still learn from the Entrepreneurship activities at IE?
I am truly amazed with many entrepreneurship activities at IE, from the informal one, such as entrepreneurship club, to formal courses, such as entrepreneurial management and venture lab.
For me, these activities indeed provide deeper insight of entrepreneurial process. This week, for example, our team has just pitched our business feasibility study and been preparing to write up our business plan for the next step. We also wish to bring our idea to venture lab, put it together to the next level, and make it real.
I experience this whole process as a out-of-comfort-zone experience, everything seems so unsure but exceptionally exciting. Not only from professors, but also from fellow students I learn the most.

From an academic perspective, how is your learning experience?
IE offers a very innovative curriculum and provides in-depth knowledge for future competitive global managers. It is a life-changing learning experience. Each subject is scrupulously designed and built to enrich business knowledge, and conducted by professors who are not only competent in teaching, but also expert in real business practice.
Teaching methodologies are targeting both hard skills and soft skills development. IE’s academic environment has allowed me to cultivate these skills, and gain access to a broader global network.

How do you cope with the Spanish lifestyle and the new environment?
Spain is an interesting Iberian country, Spaniards are even more. Generally, people here are warm and laid-back. They have a nice ritual every time they meet, giving each other left and right cheek kisses. Spaniards enjoy socializing and could chat for hours and hours, mentioning from their dogs to recent economy crisis, so to speak.
One thing must be kept in mind to cope with Spanish time, day is long. You should have enough energy to keep awake from 8 am until 2 am. You do not want to skip 11 pm tapas with your friends, since it is a wonderful custom to socialize with others.
Time for meal is absolutely peculiar. Normally, they have breakfast at 7-8 am, then lunch at 2-4 pm followed by siesta, then dinner at 8-9 pm, followed by snack and drinks at 11 pm. ¡Es muy tarde!, I thought at first time, and it took me three months to adapt my meal schedule. Fortunately, I did not have problems with my stomach.
I love Madrid’s weather in general, it is quite friendly for people like me who come from tropical country. It was autumn when I arrived in Madrid, and I have been through winter. I was quite lucky to see snow in Madrid, since it has never been snowing for the last decade. The sky is blue almost everyday, with light rain sometimes. It is not hard for me to adapt with weather here.

Which recommendation would you give to potential applicants from Indonesia?
If I may give some recommendations to you if you are interested in pursuing degree in IE, start your application at least 3-4 months prior to submission deadline. Complete your application as thorough as possible.
I would strongly suggest you to establish communication with IE students, to inquire about program structures, activities, and student’s life. IE’s representatives and wide alumni networks support completely in disseminating information for potential candidates. Do not hesitate to contact us.
Studying at IE Business School is an extraordinary opportunity and great investment for your future. I encourage you to find out more information about scholarship and loan program. Be prepared to do hard work during the fast-paced program. Bring your qualities and contribute to learning experience for everybody.

This is a short interview with the Academic Director of the IE Master of Finance, Ignacio de la Torre, to explain the difference between IE’s Master of Finance and more quantitative oriented Finance programs.

To what extend the program considers quantitative approaches as most finance programs do?
At the moment we have 3 courses in quantitative finance, totalizing about 90 hours of classes:
Financial maths
Quant finance I
Quant finance II

We don´t study quant finance deeper as its rise was associated with the development of quant models to assess risk and to invest. The credit crisis has left clear the malfunctioning of these models, and the tendency is back to basics.  Structured finance is in intensive care, the same applies to quant investment (look at hedge fund returns and outflows) and the same for risk measurement (many subprime mortgages were deemed as AAA following quantitative models).  Taking into account these thoughts and the future of the job market in quant finance, taking a more ample view is a good advice. IE understands that is better to be generalist on the financial industry than dedicate to a determined segment as job opportunities would be also restricted.

Why do we decided to go for another curriculum?
Since September 2008, our original program, called the Master in Financial Management became two different programs, forming a new family of â??Masters in Financeâ?: the Master in Finance will be aimed at students that have recently finished their university studies and young professionals with limited work experience and who aim to pursue a career as analyst; and the Master in Advanced Finance that will be designed for professionals with 2-5 years of previous experience, who wish to change career or advance in top-tier financial institutions. Each of the two programs will have one annual intake, in September 2008 for the Master in Finance (running for 10 months) and in January 2009 for the Master in Advanced Finance (running for 12 months).

We´ve decided to switch our curriculum due to:
i) the phenomenal growth that the Master in Financial Management has experienced in terms of enrolments
ii) the demand for segmentation of students by differentiating those without previous experience, who seek analyst positions in financial institutions, from those with 2-5 years of previous experience, who seek associate positions in the financial world
iii) recruiters in the financial world are starting to demand that master in finance syllabi centre more heavily on increasingly specialized areas of finance.

Hence the curriculum is also evolving by focusing entirely on the interests of financial institutions. It now includes courses in the most innovative areas of finance, such as Islamic Finance, Institutions of International Financial Stability, Geopolitics, Behavioral Finance or Historical Episodes in the Financial Markets. These courses adopt a highly practical approach, many of them being taught by practitioners who also work in large financial institutions.

How different are career opportunities between a Master in Quant Finance and our Master in Finance?
Quant Finance: mainly employers are: hedge funds using quant investing, structured finance departments of investment banks, departments of credit derivatives, departments of risk measurement in structured productsâ?¦ all of these recruiters are now in the worst crisis (they are the epicenter of the credit crisis): heavy layoffs, a lot of qualified people unemployed, will take years for this inventory to adjust

Masters in Finance: Can prepare you to become a CFO, work in corporate finance, venture capital and private equity, equities, mergers and adquisitions, portfolio manager, fixed income, derivatives, asset management, private banking, financial consulting, auditing, public finance, regulator (such as SEC), finance departments of large corporations, etc.

The full-time MBA Program of IE Business School has been ranked third in Europe and sixth in the world in the 2009 edition of the annual Financial Times ranking of full-time MBA programs.

This position marks a rise of two places on the 2008 ranking, and consolidates the school as the top ranked institution in Spain. One of the most outstanding aspects of this year´s ranking is the No. 1 position worldwide of IE Business School with respect to the career progress of graduates. The program also delivers one of the highest percentage rises in terms of increase on base salary, evidencing the value added to the career development of the program´s participants.

An MBA for change
´In 2008 we recalibrated the program, aiming to adapt certain aspects of it to the needs of companies in the rapidly changing global economic environment. The intention is to accentuate the capacities of the participants to understand and manage change, helping them to be adaptable and flexible in the evolving global markets we face today. We focus on innovation to leverage the search for creative solutions to global problems, creating real value for companies and society´, said David Bach, Associate Dean for MBA Programs. In 2008 the school launched the revamped MBA program complete with a number of new modules in the curriculum. They included the LAUNCH module (Learning, Awareness, Understanding, Networking, Communication, Humanities) which kicks off the program. The objective of LAUNCH is to drive internal change in the participant through exposure to a wide array of disciplines and approaches not necessarily associated with business and management. This year the module included sessions with actors from the renowned Shakespeare´s Globe Theatre in London, and professors from the Architectural Association School of Architecture.

Change is the theme of two other new modules in the program; ´Making change happen´ focuses on changes in organizations by studying the same business case from numerous perspectives, observing the impact of changing social, economic and market forces on the corporation and how it affects corporate strategy and organization. The final module, ´Change in action´, explores the impact of macro changes in society and the environment and how this shapes economies and markets. The module takes a key issue, such as energy, bringing in guest speakers alongside IE faculty to provide an insight into their respective fields, challenging participants to look for innovative solutions to major problems.

On behalf of IE we wish you a happy and prosperous Chinese New Year, the Year of the Ox!

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Beginning of this year 2009, IE has inaugurated its second Finance Master program in just only a couple of months: Master in Advanced Finance. All initial projections about the influence of the biggest financial turmoil in history which we are currently experiencing and the down sliding interest in Finance careers were proven wrong. The Master in Advanced Finance started with more than expected students. From 17 different nationalities, there is no dominant region in the class indicating that this industry is really global.

The participants have on average about 4 years of work experience coming with around 60% directly from the financial industry and 40% with the keen interest to move there. The statistic shows as well that this sector is still man-dominated as more than 4/5 of the participants are male.

In comparison the previously offered Master in Financial Management, the redesigned IE Master in Finance programs could boost the enrolment by more than 80% and diversify the geographic background from 19 to 37 nationalities. This clearly positions IE as one of the leading Finance schools with its market driven approach.

If you wish to learn more about the IE Master in Finance programs, just click the following links:

Master in Finance
Master in Advanced Finance

The Lake Simulator is used in online and face to face masters by 1500 students in some 40 classes around the world.

“It is much more powerful for students to find themselves trapped inside a collective action problem or prisoners´ dilemma, than to just study the theory behind it.” David Bach.

“The simulation is a great way to help students get into the mindset of thinking about public goods and how we manage them collectively. Each group represents a firm that is pursuing its own objectives, learning how its actions impact on the public good (the lake) and their profits. Students explore the relationship between individual and collective behaviour.” David Bruce Allen.

This is what strategy professors David Bach and David Allen think about the Lake simulation, also called the Uncommon Value simulation. The simulation is presented in a very simple format where students have to manage a common natural resource, “the lake”. Class sections are separated into 8 groups, each taking charge of an industrial plant, and are exposed to the struggle of achieving good business performance whilst maintaining the water quality of the lake, which affects directly the industrial process. It is not only professors that highly value the experience, but also students: “These types of games are very useful because they give us a real view of how things are going to be: although everyone in class knew which the right choice was, no one followed it.”

IE University, the extension of the IE Business School educational model to graduate and postgraduate training, and Fujitsu Siemens Computers, have implemented a pilot project during the first year of the University’s new Segovia-based degree courses so that its students can convert the notes they take into digital files in real time without the need for special paper or electronic notebooks.

The project is based on the implementation of a revolutionary electronic pen, the Mobile NoteTaker, by Fujitsu Siemens, which converts handwriting on a sheet of paper into a Word or PDF file. This latest-generation device has put an end to notes being left forgotten in notebooks and time lost searching for information. Its mechanism is as simple as that of a normal pen. The tool does not require special paper or an electronic screen and users can write on any surface. Moreover users do not need to be connected to a computer while writing, since the information can be downloaded after the work is finished using the USB cable included in the package.

The LCD screen on the electronic pen enables users to see and control the information entered in real time. Users can scan, save and share drawings, notes and meeting memorandums, talks and conferences on up to 100 pages of A4-size paper.

For Gayle Allard, Vice Dean for Research at IE University, â??the project has been welcomed by every student and with enormous satisfaction. Technology is one of our University’s key commitments. Our students will join the employment market with a greater knowledge of all the technology that can be applied to their work, helping them make the transition into the business world. Accordingly, the introduction of this new electronic pen places us at the leading edge of education, equipping our students with a tool that connects the traditional world of note-taking with new digital technologies”.

December 2009 | By Manuel Bermejo, Professor at IE Business School

The explanations offered by economists for the financial crisis only serve to understand how the whole house of cards fell down… but the earthquake that caused the collapse is a crisis of values that affects us all.

In the last quarter and for the first time in 15 years, Spainâ??s GDP has fallen. Numbers are never wrong. Political debates more concerned with words and appearance than the actual situation have come to an end.

We have reached this situation thanks to a chain of different factors. A financial crisis that arises from the appearance on the market of the so-called ´toxic assets´, which generates a loss in confidence, deterioration of bank balances (to the point of bankruptcy in some cases) and a loss in liquidity.

This situation permeates the real economy. Even with business models of proven success, many companies are asphyxiated by the lack of credit they need to balance their cash flows and, in the best of cases, they decide to adapt their costs or even close down, leading to more unemployment and less business activity, which affects suppliers. On the other hand, we have individuals with less purchasing power due to a lack of confidence or the effect of the increase in the price of money or less capacity for generating revenue. A vicious circle. The Spanish economic model, so dependent on construction, which has fallen to the deepest depths, domestic demand and tourism, both affected by the consumer crisis, has inevitably fallen into a recession. Read more…