Archive for March/2010

IE Focus | By Barbara Huerta, Professor at IE Business School

Real estate promoters have been largely responsible for the crisis that has affected their sector so badly, and now they are finding out exactly where their business plans went wrong.´Own less to owe less´. With these words, Rafael Santamaria, CEO of Reyal Urbis, summed up his new business strategy at the end of 2008. The liquidity shortage and extremely high debt payment commitments meant that all real estate companies in the country had to let go of their assets. But how did this change in fortune come about in a sector that was heavily in debt only two years before taking on ambitious corporate projects? With a view to answering this question, I did a research project that led to my writing the book Promotores de la Crisis (Promoters of the Crisis) (Lid). In the book, I analyse the impact of the international financial crisis on the financial system and real Spanish economy and its impact on leading Spanish real estate businesses. 

When did they start to blow air into the real estate bubble and why? Everything began with a positive macroeconomic environment, low interest rates and consumers who wanted to consume. But could such an illusion ever have been maintained indefinitely? We would soon see that it couldn´t. Those responsible for the monetary policy, albeit somewhat late, took measures to prevent overinflation by upping the interest rates. What would happen when the higher rates translated into an increase in the financial burden on homes and enterprise? The highest rates reduced the amount of income available to families. In addition, from mid-2007, families that were overwhelmed by the credit crisis started to encounter difficulties in obtaining mortgage loans and consumer credit. Liquidity was short, prices were still high, there was a general lack of confidence and the outlook for the deceleration of the construction and real estate sector was less than optimistic. 2008 confirmed expectations: the situation was getting worse. Read more…

Throughout architecture´s history, there has been the perception that the best designs were created by artists whose works remained untouched by the financial constraints of business. However, contemporary architecture has proven that excellence in design, although very necessary, is not quite enough to reach success. The majority of architects are, in fact, entrepreneurs and vocational designers that undertake administrative responsibilities without the proper management education. 

In response to this scenario, IE School of Architecture is launching the Master in Architectural Management and Design, in collaboration with IE Business School and the Architectural Association School of Architecture of London, in order to bridge the gap between advanced design and business management in the architecture field. 

This is the first Master exclusively aimed at architects. The program structure is based on its internationally acclaimed International Executive MBA and helps architects to gain insight into management without setting aside their projects as it is conducted part-time.

To learn more about the program, please review our corresponding web - or if you’re an architect living in Bangkok, please join our upcoming program presentation on Monday, March 22, 2010 at the Business Centre of the Grand Hyatt Erawan.

IE Focus | By Enrique Dans, Professor at IE Business School

The barriers to entry that have plagued the music industry for decades have made it the perfect example of an imperfect market. The internet can put an end to this situation, but there are plenty of people who don’t want it to happen.An imperfect market is when the supply and demand are conditioned or altered so as to prevent normal development. Imperfect markets are often the result of monopolies, exclusivity, obstacles, blocks, etc. caused by many situations that usually lead to inefficiency.

One typical example is the music market. For many years the supply was conditioned by the “selection” process that a small number of leading record companies applied to talent. You could be a genius, propose something that was original and interesting or sound incredibly good, but if you did not pass through the record company´s filter, it was more or less impossible to access the market. The filter could depend on the mood of the person listening to your demo, your sponsors, all kinds of commercial criteria or even what you were willing to do to pass the first stage of the selection process, but if you did not pass it, your possibilities were very low indeed. The capacity for self-production was minimal, the capacity for distribution was almost zero and for promotion it was just pie in the sky: demand was also controlled and manipulated through access to the media. Read more…

IE Business School´s International Executive MBA program has been rated the best in the world in the report on online management education published today by The Economist. IE Business School shares the top position with the University of Florida (U.S.), rated for its Internet MBA. The rating further consolidates IE´s position as a leading business school worldwide.

The authors of the report underscore the profile of the student body of IE´s International Executive MBA, comprising senior managers from some 33 countries with an average of over 13 years´ management experience. In spite of the fact that they work from such far-flung locations as Nigeria and Turkmenistan, program participants profess to feel incredibly connected with the business school. The Economist also highlights the high level of motivation and discipline among IE students, which results in more than 90% of its International Executive MBA students graduating at the end of the program, in sharp contrast to the general drop-out rate among online education programs.

The IE Business School International Executive MBA is aimed at senior managers with a markedly international profile and combines onsite classes in Madrid and Shanghai with online modules. Over the last decade IE Business School has invested heavily in the development of online programs run in English and Spanish. In 2002 the School invested 12 million Euros in the launch of an online education platform that was the first of its kind in Europe. Online programs currently offered by IE Business School include the International Executive MBA, the Global MBA, and specialized masters like the Master in Biotechnology Management, Master in Sports Management and Master in Digital Marketing. Furthermore, all IE students have access to multimedia content and can study subjects online.

The rating published by The Economist evaluates online programs run by the 100 business schools that participate in its MBA ranking. The report has drawn up a list of the 13 best schools based on criteria that includes program content, what students think of the faculty and their classmates, the quality and effectiveness of online materials, how close students feel to the school, professors and other program participants during the program, and the return on investment achieved.