Prepared by. Shubhashis Gangopadhyay 1. and. Dale Whittington 2. October 30, 2011

Transcription

1 Audit Reports of the Masters Programme in Finance and the Masters Programme in Economics, The Graduate School, School of Business, Economics, and Law, University of Gothenburg Prepared by Shubhashis Gangopadhyay 1 and Dale Whittington 2 October 30, Research Director and Managing Trustee, India Development Foundation and Director of School of Humanities and Social Sciences, Shiv Nadar University; sg@idfresearch.org. Gangopadhyay is also on the Visiting Professors Program of the School of Business, Economics, and Law, University of Gothenburg. 2 Departments of Environmental Sciences & Engineering and City & Regional Planning, University of North Carolina at Chapel Hill (USA), and the Manchester Business School, University of Manchester (UK), Dale_Whittington@unc.edu. Whittington is also on the Visiting Professors Program of the School of Business, Economics, and Law, University of Gothenburg. 1

2 Introduction In this audit report we first share our thoughts on issues that relate to both the Masters programme in Finance and the Masters Programme in Economics. We then provide some comments on the individual programmes. Our evaluation of both programmes is based our review of the Blue 11 reports and interviews with faculty, students, and Maureen McKelvey, head of the Graduate School. In addition to our review of the two masters programmes, our overarching objective was to see what Handelshogskolan (HH) needs to do to increase the quality of its graduate programmes and raise its global visability. A Thought Experiment We begin with a thought experiment. Suppose that a senior Swedish entrepreneur is planning to retire soon from the company he founded. He has made fortune in international business and would like to give something back to Sweden for the many opportunities he has received. He has reviewed the Financial Times rankings of MBA programmes and their associated businesses schools. He notes that the top 40 business schools (in terms of their MBA programmes) are located in 10 different countries, and that 5 European countries have top ranked business schools (UK 7; Spain 3; France 2; and Switzerland and Italy 1 each). He is puzzled to find that the School of Business, Economics, and Law at the University of Gothenburg is not listed in the top 200 business schools. Yet he has hired numerous graduates of the School of Business, Economics, and Law at the University of Gothenburg, and he knows that they are well trained, and have made major contributions over the years to his company. He resolves to make a donation of 100 million euros to help the School of Business, Economics, and Law at the University of Gothenburg become a world class business school. Before making this donation, our Swedish benefactor wants to see a plan for making this happen. What would the Director need to do to make School of Business, Economics, and Law at the University of Gothenburg a globally ranked business school? What would his plan look like? How would the Director spend these funds to achieve this goal? On reflection, we think that there would be two main priorities. First, the School of Business, Economics, and Law at the University of Gothenburg (HH) would need to offer a full time MBA programme. This is the flagstaff programme for all top ranked business schools. Launching a full time MBA would have numerous implications. Perhaps the most important would be the need to recruit international faculty to support a comprehensive MBA curriculum. Second, a top ranked business school must attract students globally. While the current fee structure makes it easier to attract students from Europe, HH must strive to attract students from outside of Europe. To be internationally ranked, students graduating from HH must be able to access the market for global careers, and HH must attract students from all parts of the world. Since students outside of Europe will have to pay to study, their willingness to come to HH will be a true measure of its international reputation. A more international student body will also benefit Swedish and other European students. They will be better trained for global careers, through networking and a deeper understanding of different cultures and ways of doing things if their peer group consists of young people from all parts of the world. We believe that HH has numerous strengths that make it realistic to aspire to become a home for a globally ranked business school. First, to achieve the objective of becoming a top ranked business school, everyone on the team must have a common goal. In this aspect we found that the administration, the students and the faculty all aspire to become internationally reputed and for HH 2

3 to attract international faculty and students. In other words, there is a common goal now, and this should make it that much easier for the school to reach this objective. Second, HH has a unique advantage in that law, economics and business administration are housed together. In the global business world where new and emerging economies are assuming significance with every passing day, it is imperative that these three units work together to develop a new structure and methodology for global business activities. Earlier business models and practices, carried out in a western dominated socio cultural milieu, is giving way to accommodate economies with entirely different social, cultural and economic imperatives. All three departments, or faculties, must therefore work together to provide a unique opportunity to students studying in the HH graduate school. In this context, the fact that each faculty has restricted physical access to other faculties is not conducive to a cross disciplinary research and training institution. Third, the medium of instruction in the school is already English. This is a plus as it enables students from outside Europe to attend the HH programme(s) very easily. However, there are some aspects that require more attention. In a vibrant international school, there should be greater interactions among international and Swedish students. In most internationally reputed institutions, student bodies from different countries have institutional support to organize cultural activities that showcase their country. This is currently lacking in HH. Fourth, and finally, HH is situated in an attractive, safe, friendly city. Gothenburg is sufficiently vibrant to engage the young mind and yet supports a rather relaxed and easy life for a new comer. The ease with which poor students can move around in the city is remarkable. This goes a long way in allowing foreign students, far away from home and in a very different cultural setting, to effortlessly settle in. Our impression is that the Masters programmes in Economics and Finance has served many students well in their professional and academic development. Indeed, all the major stakeholders appear relatively content with aspects of the status quo. Students are receiving a high quality educational experience for free. The indirect cost that they pay is the lower salaries they appear to receive upon completion of their degrees compared to the global market. This seems a trade off that many students are now willing to make. Although we have no evidence, we speculate that Swedish companies are happy with the status quo because HH graduates are well trained, and many do not seek jobs outside Sweden. Companies thus do not need to pay graduates globally competitive salaries. The faculty with who we spoke also seem relatively content with aspects of the status quo. They have good students, first class physical facilities, and reasonable teaching loads. And they often have deep personal roots in Gothenburg and Sweden. Is the status quo stable? Two developments could disrupt the current equilibrium. First, HH would appear to us to be at some risk of losing its best faculty. Salaries are low for globally ranked business schools, and the best faculty potentially have many other options. Second, the best Swedish students could increasingly decide that they prefer to attend the London Business School or Insead. Because HH is relatively small, an exodus of senior faculty and/or deterioration in high quality student applicants could happen quickly and could be difficult to stop. There has evidently already been a sharp drop off in the number of international student applicants after the recent fee increases. This is a serious threat to any move HH would want to make to move up in the global rankings. 3

4 Specific Comments on the Masters Programme in Finance The Finance programme can be easily tweaked to offer Finance specialization in an MBA degree course. In this context, our discussions with the faculty and a look at the history of programmes offered at GU, pointed to a successful experiment with an MBA programme organized by Chalmers and HH about a decade back. This was discontinued after some technical issues and not due to any problems with demand from students. Such a programme can be easily re established and should be done. The Finance faculty is a set of good and dedicated people who do some serious research and teaching. The courses offered and the syllabi covered in each of the courses are comparable to anywhere in the world, as are the standards of teaching and evaluation. However, certain important courses are dependent on visiting faculty. In and of itself, this exposure to international faculty is a good experience for the students; on the other hand, this has allowed HH to get away without hiring more permanent faculty. If the finance programme is to become a full fledged degree programme comparable to the best in the world, it requires more people to be hired. Specific Comments on the Masters Programme in Economics Our recommendation above for a full time MBA should not be interpreted as threatening to the existing Masters programme in Economics. Probably the vast majority of the students in the Masters Programme in Economics especially those specializing in development, health, and environmental economics would have little interest in a MBA degree. But we do think that the entire student body at the School of Business, Economics, and Law at the University of Gothenburg would benefit from a more vibrant international student body and global perspective that a full time MBA would bring. Many of the challenges facing societies in the 21st century such as the IT revolution, sustainability, and globalization involve a nuanced understanding of the roles of both the public and private sectors. Students who understand both the public and private perspectives, and who can work comfortably at the interface of the private and public sectors will have a comparative advantage in their professional careers. Summary In summary, what does HH need to do push itself over the threshold to become a truly international institution? First, it must match its goals with its structure. To become a globally ranked business school, HH must offer programmes that compete with top ranked schools. Most paying foreign students go to top ranked business schools to attend full time MBA programmes, which HH does not currently offer. This is a continental European legacy that numerous European countries have overcome. Students from all disciplines attend MBA programmes from the sciences, engineering, as well as the humanities. The current structure of HH does not allow the intake of such students nor does it offer a full time MBA programme that would permit its students to enter the global business world in the same way that MBA graduates from other top ranked business schools do. The School of Business, Economics, and Law at the University of Gothenburg, though known as a business school, does not offer a programme that can compare with the flagship MBA programmes of internationally ranked business schools. What it has instead is something similar to a Masters programme in any University. Second, HH must match its goal with its resources. Many of the well known MBA programmes are very expensive and, yet, most schools make losses in these programmes. However, their networking and alumni raise resources for the schools to undertake research and develop specialties that attract 4

5 foreign students. HH will have to raise more external resources to become an internationally ranked business school and, develop a globally competitive MBA programme that will attract students from all parts of the world. Third, without a major infusion of resources, such as envisaged in our thought experiment to become a globally ranked business school quickly, it is difficult for HH to move forward quickly. In the absence of a major donor, the path followed by, say LBS a few years back, or National University of Singapore (NUS) more recently, is not possible for HH. What it could do instead is offer something that these schools do not. Specialized programmes for managing environment, understanding global commercial law, financing start ups, etc., can be developed as special modules that will attract young practitioners wanting to boost their current careers in emerging global economies. Fourth, to make the specialized programmes successful, both the courses taught and the research done must be specialized in these areas. Both the economics and finance programmes have a course schedule that compares favourably with any school. Added electives are needed in the special fields HH desires to uniquely offer. Fifth, faculty must be given more incentives to do research so that the teaching can be cutting edge rather than one that follows curricula elsewhere. This, we feel, is a serious drawback in some programmes in HH. Our understanding after talking to faculty and administrators is that teachers are expected to teach and the remuneration is based on the amount of teaching they are supposed to do. If they want to reduce their teaching load, they have to go out and get money to buy out teaching time to generate research time. This puts young faculty, who should spend more time in research, at great difficulty. To get research grants, they must show research potential and activity; they can indulge in research only if they can buy research time through grants. This is a chicken andegg problem and needs to be addressed immediately. High level of research is a must for being internationally reputed. In most good schools, administration decides on the level of research they want, ensure the minimum amount of time needed to achieve that and, hence, come out with the maximum amount of teaching a faculty must do. Here, it seems the opposite is in place. A minimum amount of teaching is first specified and faculty is expected to reduce this by buying out teaching time and generating research time. Indeed, we were impressed with the research that still takes place pointing favourably to the quality of the faculty. We strongly feel that the performance model needs to be reoriented and the (quantitative) strength of the faculty needs to be improved, especially in light of the customized modules mentioned in the previous two paragraphs. Sixth, faculty must be encouraged to become global in approach. The programmes in development economics and environmental economics at HH are two wonderful experiences that must be implemented across the school. Non European students will not come to the school if the faculty and the programmes they offer are short on knowledge and expertise required in Asia, Africa and Latin America. Here, the faculty must play an active role in developing these areas. 5