One School, Two Campuses - INSEAD’s Decision to Open a Second Campus

In the 1990s, as the Asian economy was booming, many US and Western business schools began creating joint ventures or collaborations with Asian schools in order to capture this growing market. INSEAD already had a jump on this trend having created in 1980 the Euro-Asia Centre (EAC), a research and executive education centre on its Fontainebleau campus. By 1994, the EAC had grown to a point where it was organizing about 70 weeks of executive education attended by 600 participants annually. The next step in INSEAD’s expansion in the Asian market, explain Professor Philippe Lasserre, Arnoud De Meyer, and Research Assistant Sam Garg, would be a much larger one.

by Arnoud De Meyer,Philippe Lasserre, Sam Garg
Last Updated: 23 Jul 2013

In the 1990s, as the Asian economy was booming, many US and Western business schools began creating joint ventures or collaborations with Asian schools in order to capture this growing market. INSEAD already had a jump on this trend having created in 1980 the Euro-Asia Centre (EAC), a research and executive education centre on its Fontainebleau campus. By 1994, the EAC had grown to a point where it was organizing about 70 weeks of executive education attended by 600 participants annually.

The next step in INSEAD’s expansion in the Asian market, explain Philippe Lasserre, Professor of Strategy and Asian Business, Arnoud De Meyer, Akzo Nobel Fellow in Strategic Management and Dean of the Asia Campus, and Sam Garg, Research Assistant, would be a much larger one.

The initial idea to have a permanent presence in Asia stemmed from several factors, say the authors. First, it would be one way for the school to fully differentiate itself from all other business schools. Second, as a non-university-affiliated institution, INSEAD relies greatly on executive education for its income. With a booming economy, Asia represented huge potential in this area. Third, having already been active in the market through the EAC, a permanent campus would allow the school to further its activities and reinforce its relationships there. Finally, a second campus fit nicely with the school’s strategy of cultural diversity.

By 1996, representatives from INSEAD had begun exploring 11 major cities in East Asia. In parallel, the institution conducted a feasibility study, conducting market research on the state of business education in Asia-Pacific, as well as interviews with INSEAD faculty and students. An ad-hoc committee of six faculty members formed to further analyse whether it made sense to go to Asia.

Moving ahead quickly, three of the 11 cities were selected for the short list: Kuala Lumpur, Hong Kong, and Singapore. As talks progressed, faculty were consulted for their input. Though generally positive about the expansion, they also raised several concerns.

<UL>

<LI>Had enough attention been paid to adapt the MBA and executive education programs for Asia?

<LI>Was a multi-campus institution the only model of internationalisation?

<LI>Did INSEAD have the processes, resources, and appropriate mindset needed for a successful global organization?

<LI>By moving ahead so quickly and in the event that the venture failed, might INSEAD be risking damage to its reputation and financial health?

<LI>As a European school, why not just focus on Europe?

</UL>

As decision-time neared, INSEAD managers drew up a list of key perceived benefits and risks:

Benefits:<OL>

<LI>The booming market demand for INSEAD’s executive programs in Asia.

<LI>An opportunity to assert the image of the one and only truly global business school.

<LI>Increased opportunities for the recruitment of more faculty, including some of Asian origin.

<LI>Opportunities for increasing research output on Asia.

</OL>

Risks: <OL>

<LI>Financial risk and strain to the institution.

<LI>Two campuses could lose cohesion over time.

<LI>INSEAD could be spreading itself too thin, having been in the midst of a major Development Campaign.

<LI>Concern that INSEAD might not be able to attract and retain enough faculty for the Asia campus.

<LI>Fears over diluting the INSEAD brand.

</OL>

The authors conclude the Case Study by asking how the decision-makers should weigh these two groups of concerns, while at the same time keeping in mind the key stakeholders.

INSEAD 2003

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