It's an issue that faces universities around the world and is a particular concern of colleges here - how do you keep abreast of foreign competition and turn yourself into a world-class institution? Since its establishment in 1965, the London Business School (LBS), which is an affiliated college of the University of London, has done just that. The postgraduate institution now ranks eighth in the Financial Times international index of business schools. "We're the top school outside the USA," comments Professor John Quelch, the school's dean. Harvard Business School was rated the world's top business school, he notes.
But why are American business schools so far ahead of the rest? "The premier business schools are all 100 years old," Quelch replies. "As a result they have a much larger group of alumni. There is also a much greater tradition of alumni `giving' in the States. In very many cases, alumni contributions give institutions a margin for innovation that the European competition finds it hard to keep up with." Harvard Business School, for example, has an endowment of $1.2 billion, he says. Getting to the top also requires colleges to attract the world's best teaching staff and its best graduates. To do this, colleges need to be able to free themselves from pay restriction constraints. Public service pay is hardly likely to attract international high flyers - particularly in areas where people can command top salaries in business or industry. "It's impossible for any institution to compete unless you can afford world class faculty," comments Quelch. "We have taken ourselves out of the standard British compensation system. Professorial salaries range between £50,000 and £100,000 and we have a performance-based pay structure, based on teaching, research and citizenship."
The in-house review process is examined every three years by outside consultants, he says. "All of the courses are rated by students. We treat this as part of the review process and we have introduced awards for teaching excellence." (Interestingly, Howard Newby, the new president of Britain's Committee of Vice-Chancellors and Principals recently told colleagues that the only way academics will win substantial salary increases is by accepting performance-related pay.) Meanwhile, LBS's government funding now represents only 7 per cent of total revenue - compared with 40 per cent in the London School of Economics, for example. Fees from postgraduate degree programmes and executive education provide two-thirds of the college's income. Meanwhile, fees from alumni donations, corporate fund-raising and research grants from government agencies and business make up the rest.
How can Irish business schools achieve worldclass status? With difficulty. "It's pretty challenging in a small country to develop a business school with a world-class reputation because of the problem of attracting a critical mass of top class researchers," Quelch believes. The fact that start-up costs for business schools are relatively low - you don't need expensively equipped labs for example - means that in recent years there has been a proliferation of institutions offering business education and meeting a growing demand.
In Britain alone, there are over 110 MBA programmes on offer. Quality assurance is a vital issue, he argues. "There is a concern that we ensure that quality standards of the MBA is assured and that we don't have a dilution of standards." In Britain, the MBA remains less acceptable to employers than an accountancy qualification. `It's not as prevalent or acceptable in some circles as it is in North America. But a heavy emphasis on accountancy usually results in conservative business practices and less risk-taking. In the US, you have a much higher percentage of CEOs with a marketing rather than an accounting and finance background. To an extent, this explains why there is a higher level of customer responsiveness and entrepreneurship in US businesses." Good MBA qualifications are expensive to acquire - but graduates reap the rewards, Quelch argues. "With a MBA our graduates get an average 70 per cent increase in salary as a result of a 21 months' investment." (LBS fees for a two-year MBA programme total £30,000.) "Our fees," notes Quelch, "are 10 per cent shy of the top US schools and our faculty compensation is similar to that of US faculties." The London Business School, he says, is attracting top graduates from around the world. "Only 20 per cent of our students are British, 30 per cent are from the rest of Europe, while two-fifths are North American and Asian." A major selling point is the fact that LBS programmes are taught within a European, rather than an American, cultural context, Quelch says.
The London Business School offers full and part-time MBAs and masters in finance and executive education programmes.
