The Responsibility of Business Schools In a Changing Asia FRANCIS - - PDF document

The Responsibility of Business Schools In a Changing Asia

2nd International Business School Shanghai Conference 4 November 2008

FRANCIS G. ESTRADA

President, AIM

have a role to play in developing leaders, entrepreneurs, and managers equipped to deal with the complex challenges presented by our rapidly changing world.

MANAGEMENT SCHOOLS

Management education in Asia must address 4 issues:

• A. The Growing Global Interdependence of

Economies and the Demise of the Unipolar World

• Develop programs in the

context of Asia’s rapid economic integration

• ADB: “Asia trades about

as much with itself as Europe and America do with themselves.”

• A. Global Interdependence of Economies (cont’d)
• 1. Asia Today
• 3.7 billion people
• Combined GDP of more than US$10 trillion
• 2/ 3 of global international reserves
• Fastest-growing region in the world

• 2. Asia in the Next 40 Years
• Asia will account for over half of global economic activity

(from 20% today)

• G7 economies’share will decline from 55% to under 30%.
• China, Japan, and India will be at the forefront. Indonesia

and Vietnam will be important players.

• ASEAN Community by 2015
• A. Global Interdependence of Economies (cont’d)
• 3. Role of Managem ent Schools in Asia

In addition to management tools and knowledge, provide students a deep understanding of the differences among Asian cultures, values, economic structures, regulatory frameworks, and governance systems

• A. Global Interdependence of Economies (cont’d)

• B. Regional Integration
• 1. Econom ic Integration and 20 0 8 Financial Crisis
• No more insulation from the rest
• f the world
• 1997-98: Asian Financial Crisis
• 2008: Subprime losses at major

US and international financial institutions, which failed to provide appropriate regulatory framework

• B. Regional Economic Integration (cont’d)
• 1. Econom ic Integration and 20 0 8 Financial Crisis
• Unipolar character of old financial

architecture – despite severe structural economic problems, the US$ and US Treasury instruments were the only viable vehicles that could accommodate the huge surpluses of Asia and oil- producing countries.

• East Asian economies’export-led growth policies

must be tempered by encouraging domestic demand-driven growth.

• B. Regional Economic Integration (cont’d)
• 2. Managem ent Schools in Asia Must Provide…
• a. An understanding of regional integration at the macro and

firm levels

• b. Opportunity identification skills
• c. Skills and understanding to engage different cultures, values,

business practices, and regulatory environments

• d. Ability to bridge cultural, racial, social, and political divides
• e. Ability to manage in a rapidly-changing environment
• f. Entrepreneurial disposition to develop solutions
• g. Understanding of and commitment to good governance
• C. Sustainable and Inclusive Development
• 1. Poverty
• ADB: Principal challenge of

Asia is the unfinished poverty agenda and rising inequality.

• 2/ 3 of the world’s poor live in

Asia

• 600 M people have no access

to clean water

• 107 M children under 5 are

underweight

• C. Sustainable and Inclusive Development (cont’d)
• 2. Role of Managem ent Schools in Asia
• Show students that poverty

is not extraneous to enterprise.

• Poverty reduction creates

enormous opportunity, while poverty increase creates tensions that impede growth.

• C. Sustainable and Inclusive Development (cont’d)
• 3. Inclusive Growth
• Inclusive, integrated,

and sustainable growth

• Predicated on improved

communications, flow

• f information,

connectivity, and rising expectations of civil society

Consider these:

• 1. Poverty is probably the single most destructive economic,

political, and social divide. Poverty – and its elimination – is everyone’s responsibility.

• 2. Human capital development is not measured exclusively

in financial terms.

• 3. For business to create value over time, it must
• Produce goods/ services that address market demand
• Be engaged in an activity that does not damage life systems
• Have a viable economic model
• Enjoy multi-reinforcing relationship with its communities
• D. Bridging Divides

IMPORTANT THEMES

• A. Corporate Social Responsibility
• 1. Company initiatives aim to support important social

programs for the communities they serve.

• 2. “Do well by doing good.”
• 3. AIM holds annual Asian

Forum on Corporate Social Responsibility (in Singapore on Nov. 20-21, 2008).

IMPORTANT THEMES

• B. Good Governance
• 1. Response to excessive corruption and the clamor for

transparency, fairness, and accountability

• 2. Movement seeks to establish universal code of conduct

and best practices in governance.

• C. Public-Private Partnerships

Public and private sectors are interdependent. Business schools must lead in researching, advocating, and developing ways to improve upon these themes.

www.aim.ed u

THANK YOU