Commentary

Increasing Allure of US Business Schools

American business schools are creating an increasing number of partner programmes and satellite campuses in Asia. But, in spite of post-September 11immigration restrictions, international students are applying to the primary campuses of business schools in the US in record numbers.

“Expanding abroad serves a number of key purposes both for business schools and the regions they enter,” says Dipak Jain, dean of the Kellogg School of Management at Northwestern University, a top business programme outside Chicago. (Full disclosure: I was briefly employed by Kellogg several years ago.) “It obviously increases access to management education; we essentially bring our programmes to a new population of students as opposed to forcing them to come to us.”

Nonetheless, while international students are applying to fledgling US and local business programmes in Asia, they’re still applying to American campuses in record numbers. After a dip in 2002, foreign applications to American business schools resumed a steady rise. The number of international students registering to take the Gmat — the business school admissions test — jumped more than 22 per cent, from 22,256 in March last year to 27,196 in March this year. That’s quite a contrast to the comparably anaemic rise of 5.25 per cent in US Gmat registrations.

That’s partly because good US business schools give you more than just a business education. Major American programmes germinate contacts of all kinds with local businesses, and do all they can to place their graduates into positions at them. At Kellogg, eager students come face to face with executives at Kraft Foods, McDonald’s, Abbott Laboratories, Baxter Healthcare, and other giants in Chicagoland.

Extracurricular activities range from student-run conferences where business leaders hold forth on every conceivable category of business and economics to wine tastings, ski holidays in Vail, and trips to India.

Just as Americans seeking to do business in China do all they can to learn local customs associated with meals and gifts, and even take courses in Putonghua, international students hoping to sell their products in the US want to come here to learn the market.

The cultural exchange goes both ways. Raj Mathur, a former International Monetary Fund employee and incoming student at the University of Chicago’s Graduate School of Business (GSB), is familiar with the international locations of American programmes. “GSB has campuses in London and Singapore. The school says, ‘if you’re going to go abroad, we want you to go to the local schools, like London Business School, or Nanyang Tech’.

“A University of Chicago student cannot go to the Singapore campus of the Chicago B-school. He has to go the Nanyang campus — the local campus — because the Chicago campus in Singapore recruits only people based in Asia.”

Beyond bridging cultural divides, business schools are expected to build lasting personal relationships. Businesses are, unavoidably, run by people, who make or break them and create their cultures. An acquisition can make perfect sense on paper, but if the owners and managers of each company can’t get to a comfort level with one another, it might never go through. Many mergers have failed to deliver any cost reductions or add any value because the organisational cultures and incentive structures simply weren’t compatible.

To some students, a top business school is as much a new social outlet, and networking opportunity as an exemplary management education. American business schools offer the purification of the meritocracy and, like the graduates of the US Military Academy class of 1915 — which included Omar Bradley and Dwight Eisenhower — their alumni often prove instrumental to one another later on. Connections students make at US business schools serve them well in markets on both sides of the Pacific.

David Donadio is a writer and editor at the Cato Institute in Washington.