Archive for May/2009

A joint initiative for research and training for commerce, entrepreneurship and organizational Management
IE Business School and Brown University are delighted to announce the formalization of a multifaceted relationship, bringing together one of Europe’s leading business schools and a leading North American research university.

Brown and IE share a commitment to academic excellence and to innovation in research and teaching. Both are committed to the importance of the entrepreneurial spirit in the academic world no less than in the worlds of management and technological innovation.

We anticipate developing a wide range of research and teaching opportunities together over the coming years as we explore synergies between our interdisciplinary approaches to graduate and undergraduate training for leadership in our increasingly global world.

“This initiative comes at a particularly propitious time, as the global economic situation calls for a systematic rethinking of financial systems and management paradigms. There needs to be a much wider approach to understanding the role of corporations and managers within our global society. Managers need to be exposed to broader philosophies and schools of thought, building a wider vision of value creation and sustainability. This alliance is a major step forward in developing a higher education model which is focused on developing students who are global citizens as well as well rounded professionals” says Santiago Iñiguez, Dean of IE Business School.

To support this agenda, Brown and IE seek to link the expertise of the two institutions in a number of innovative exchanges and programs. Utilizing the strengths of IE Business School in management and Brown’s excellence in the humanities, social, biological and physical sciences, both institutions seek to foster a platform of interdisciplinary research and teaching. This will be supported through exchanges of faculty and students from various programs and at different levels of each school.

David Kennedy, Vice President of International Affairs at Brown University described the new relationship as an opportunity to focus on innovative approaches to management. “The future of management and leadership education lies in reimagining the MBA and other management programs so as to link traditional analytic skills with humanist and scientific learning, pursue interdisciplinary research across a broad range of fields relating to organizational, economic and social dynamics, and develop new pedagogic and research avenues in the fields of innovation, creativity and entrepreneurship.”

Brown’s undergraduate program on Commerce, Organization and Entrepreneurship will be a key component of the relationship with IE, as will Brown’s Master’s Program in Innovation Management and Entrepreneurship (PRIME). We expect additional synergies among our summer and continuing education, adult education and executive education offerings, both in Rhode Island and in Spain.

One of the first major ventures to be launched will be an IE Executive MBA developed through an alliance between IE and Brown’s Continuing Education division. IE will launch a version of its top ranked International Executive MBA with some distinct characteristics developed with Brown in the summer of 2009, aiming to commence the program in the fall of 2010. Aimed at senior executives with more than 10 years work experience, the program will draw on IE’s expertise in blended learning formats, linking state of the art online learning methodologies and face to face periods. This program will include residential periods on Brown’s campus in Providence Rhode Island and IE’s centre in Madrid. Faculty from both institutions will be involved in the design and delivery of the program, which will primarily be taught by leading faculty from IE’s world renowned faculty. This effort represents a major step for Brown in the field of continuing, adult and on-line education.

“This promises to be a truly innovative program in terms of content and delivery. The opportunity for participants to take part in an internationally diverse, blended program whilst exploring some exciting new approaches to management through disciplines in the humanities and physical sciences, promises to be a really unique experience.”

VERY INTERESTING ARTICLE BY FINANCIAL TIMES.
Call me mad but this crisis is good for China. It is also good for China’s role and responsibilities in the world.
Yesterday, we upgraded our gross domestic product forecasts for China for 2009 and 2010; we are now looking for 8.3 and 10.9 per cent, respectively, up from 6 and 9 per cent.
Why the optimism? It was clear that the massive rise in exports, the mainstay of the China growth model until 2008, was not sustainable. At one stage in late 2007, Chinese exports to the US alone were about 12 per cent of total GDP. This meant that exports would suffer badly in the event of something going wrong with demand in the US, and the risk of a protectionist backlash.
This led some of us to expect an end to the fixed Rmb8.28 exchange rate to the dollar and a gradual shift to a more flexible, stronger exchange rate a few years ago.
Fast-forward to the crisis. When this intensified post-Lehman, global trade suffered enormously and quickly, and it was clear that Chinese growth would suffer. It was also reasonably clear that, just as they did in response to the Asian crisis in 1997, Chinese policymakers would react swiftly and shift gears. That they have done.
Three policy initiatives stand out, and the results are starting to bear fruit, hence our upgraded forecasts.
First, in November the authorities announced massive fiscal expansion, centred on fresh infrastructure spending. While my industry has quibbled about its true size ever since, this misses the point. The statement of intent was clear; interestingly, the stock market noticed and has rallied since.
Second, and ultimately perhaps the most important development in the world economy, the government announced plans to develop a full medical insurance policy for the still vast rural community, the beginnings of which it plans to have fully implemented for 90 per cent of the rural community by 2011. This could result in an end to the excessively high Chinese savings rate and allow much stronger consumption.
Third, and critical to our forecast upgrade, the authorities, led by the People’s Bank of China, embarked on a timely reversal of tightening financial conditions of the previous two years. According to our Chinese financial conditions index, conditions have eased a huge 520 basis points since last October.
These three measures have set the scene for an acceleration of Chinese domestic demand for the rest of 2009 and 2010, just the right recipe for China and, critically, the world.
The next stage of China’s development has started and is likely to go on for years. It was partly in anticipation of this that we highlighted owning China “A” shares as one of our most favoured trades for 2009. As they have risen 50 per cent since the November stimulus announcement, the entry point is now less attractive but, as evidence of rising demand accumulates, many investors are rightly going to be attracted back to China.
The “C” in the Bric economies (Brazil, Russia, India, China) has always been the most important of the four and the events of the past five months continue to justify our excitement for the longer term.
Amusingly, in the past year many people have suggested that the Brics story is over. Nonsense – it is still in its infancy. Indeed, the updated longer-term projections we published last summer, suggesting that China could overtake the US by 2027 and that the Brics collectively could be as big as the G7 by 2027, still look decent bets to me.
At some stage in the coming months, once it becomes clear that Chinese GDP growth is safely back above 8 per cent, policymakers will allow for some tightening of financial conditions again, possibly led by the exchange rate.
In the next two years, China is very likely to overtake Japan to become the second-largest economy in the world. Some say that China might get old before it gets rich, but it is getting bigger and richer, that is for sure. One or two of its ageing G20 partners may wish to take a closer look at Chinese economic policy to see how it’s done.
Jim O’Neill is chief economist at Goldman Sachs

Fiat Stilo is a multimedia case study that has been designed to show the analysis that should be followed for positioning a new company product. In the case there are two opposing positions: the marketing department point of view and that of the sales department.
Before the preparation of the case, the professor divides the class into two groups: one half takes on the role of the sales director and the other half take the role of the Marketing Director. Depending on the role adopted, students’ decisions will be different.

The first few minutes of the class are used to discuss the problems that Fiat is facing at that particular moment; both sides of the class generally agree with each other about this stage. However, as the class progresses the two roles start to emerge and different points of views/interests start appearing, provoking a confrontation of ideas and achieving an excellent debate. At the end of the class, professors guide students through the conclusions.

As Professor Miguel Costa comments, “this experience allows us to analyse a product launch from a wider perspective, to develop the positioning concept with interactive tools and playing with different scenarios, to understand two different points of view (Sales Department and the Marketing Department) of the company and how all these things will condition the decision making of the launch. The case allows students to take two different roles, to practice with the different possibilities of specifications and optional equipment, and to defend them in class. On top of all this, students love it.”

Students also appreciate the value this case brings: “I particularly liked being able to play the part of one of the directors and then compare how I did with the other results. The possibility of role play (Sale Manager vs. Marketing manager) helped me in defining my positioning strategy”

As many students commented, it brings them closer to real life; not only through the decisions made but also because of the way the class is structured.

IE Focus | By Rafael Puyol, President IE University

The crisis has affected every level of society, but particularly immigrants. Madrid’s immigrants are faring better than most, however, evidencing that the capital is still an attractive destination for the immigrant population.
The report on the foreign population registered on the Comunidad de Madrid census on 1 January 2009 is very recent and is one of the first documents to show the impact of the crisis on immigration.

Every intuitive guess and forecast for the situation of the foreign population is confirmed in the report, but it applies in Madrid less severely than in other parts of Spain.

The base figures for the analysis are very clear. The first is the slowing-down of growth and, to a certain extent, the absolute reduction of immigrants if the count includes only the last few months. But it is a quasi-symbolic reversal as there are only 159 immigrants less than last October. It is true that the number has fallen and that some have gone, which means that the year-on-year growth is down on other periods. However, consideration must be given to the fact that many foreigners are no longer considered as such because they have been awarded Spanish nationality. Madrid is also unique in this respect, since it accounts for one third of Spain’s nationalisation processes. Read more…