Increasing Allure of US Business Schools

This article appeared in the South China Morning Post on May 5, 2008.

American business schools are creatingan increasing number of partnerprogrammes and satellite campusesin Asia. But, in spite of post-September11immigration restrictions, internationalstudents are applying to theprimary campuses of businessschools in the US in record numbers.

"Expanding abroad serves a numberof key purposes both for businessschools and the regions they enter,"says Dipak Jain, dean of the KelloggSchool of Management at NorthwesternUniversity, a top businessprogramme outside Chicago. (Fulldisclosure: I was briefly employed byKellogg several years ago.) "It obviouslyincreases access to managementeducation; we essentially bringour programmes to a new populationof students as opposed to forcingthem to come to us."

Nonetheless, while internationalstudents are applying to fledgling USand local business programmes inAsia, they're still applying to Americancampuses in record numbers.After a dip in 2002, foreign applicationsto American business schoolsresumed a steady rise. The number ofinternational students registering totake the Gmat — the business schooladmissions test — jumped more than22 per cent, from 22,256 in March lastyear to 27,196 in March this year.That's quite a contrast to the comparablyanaemic rise of 5.25 per cent inUS Gmat registrations.

That's partly because good USbusiness schools give you more thanjust a business education. MajorAmerican programmes germinatecontacts of all kinds with local businesses,and do all they can to placetheir graduates into positions atthem. At Kellogg, eager studentscome face to face with executives atKraft Foods, McDonald's, AbbottLaboratories, Baxter Healthcare, andother giants in Chicagoland.

Extracurricular activities rangefrom student-run conferences wherebusiness leaders hold forth on everyconceivable category of business andeconomics to wine tastings, ski holidaysin Vail, and trips to India.

Just as Americans seeking to dobusiness in China do all they can tolearn local customs associated withmeals and gifts, and even takecourses in Putonghua, internationalstudents hoping to sell their productsin the US want to come here to learnthe market.

The cultural exchange goes bothways. Raj Mathur, a former InternationalMonetary Fund employee andincoming student at the University ofChicago's Graduate School of Business(GSB), is familiar with the internationallocations of American programmes."GSB has campuses inLondon and Singapore. The schoolsays, 'if you're going to go abroad, wewant you to go to the local schools,like London Business School, or NanyangTech'.

"A University of Chicago studentcannot go to the Singapore campusof the Chicago B-school. He has to gothe Nanyang campus — the local campus— because the Chicago campus inSingapore recruits only people basedin Asia."

Beyond bridging cultural divides,business schools are expected tobuild lasting personal relationships.Businesses are, unavoidably, run bypeople, who make or break them andcreate their cultures. An acquisitioncan make perfect sense on paper, butif the owners and managers of eachcompany can't get to a comfort levelwith one another, it might never gothrough. Many mergers have failed todeliver any cost reductions or addany value because the organisationalcultures and incentive structuressimply weren't compatible.

To some students, a top businessschool is as much a new social outlet,and networking opportunity as anexemplary management education.American business schools offer thepurification of the meritocracy and,like the graduates of the US MilitaryAcademy class of 1915 — which includedOmar Bradley and Dwight Eisenhower— their alumni often proveinstrumental to one another later on.Connections students make at USbusiness schools serve them well inmarkets on both sides of the Pacific.

David Donadio

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