[LCM Articles] AUB in the FT.com

[Elias Muhanna]

*School profile: The American University in Beirut** *

*Financial Times** 12/04/2007 *

*Author: Ferry Biedermann*

The business education sector in the Middle East is booming and new
schools or branches of established foreign ones are becoming
increasingly active. But the Arab world’s oldest business school at the
American University in Beirut, now named the Suliman Olayan School of
Business, is, despite its turbulent home base, determined to remain
pre-eminent and rival even such august international institutions as
Harvard, Wharton and Insead.

“Business education is a global industry. There is no junior league any
more. You have to follow best practice and best standards otherwise you
have no business to be part of the sector,” says George Najjar, the dean.

To keep pace with the dean’s ambitions, the school is set to move into
what he says will be a state-of-the-art building in a new development on
the lower campus, next to the sea. It will be adjacent to the
university’s new sports centre and is set to be completed by the middle
of next year.

Demand for business education is growing rapidly as globalisation forces
parts of the commercial sector at least to keep up -- or catch up --
with the rest of the world, even as the region’s governments stay mired
in a corrupt and bureaucratic past. Of course, the money from the oil
glut in the Gulf needs its local fund managers and business leaders as
well. Many established US and European business schools have recognised
the potential and are opening branches around the region, mainly in the
Gulf. They see a niche in particular for Executive and Corporate MBA
programmes to tap the huge pool of liquidity that local businesses have
at their disposal.

In addition, local universities in the Gulf are pouring money into
business programmes. Institutions such as the American University of
Sharjah in the United Arab Emirates, which was established just 10 years
ago, benefit from their benefactors’ very deep pockets.

Faculty members at the Olayan business school acknowledge that their
institution cannot always rival the compensation packages or even the
research money and support that some of the schools in the Gulf offer.
But they unanimously emphasise the attraction of working in Beirut and
say that the co-operative atmosphere among colleagues is especially
conducive to research, which the school has made a priority.

Prof Najjar speaks of research as part of what he sees as academia’s
knowledge creation mission. But he acknowledges the practical side of
it, which is to help the school attract eminent lecturers who publish in
top-rated journals, thus also burnishing the school’s image.

Business education started at AUB in 1900 as part of the faculty of arts
and sciences. In 2000 the university turned the programme into an
autonomous school of business, which was named after Suliman S Olayan in
2003, following a large bequest.

The school still falls fully under AUB’s umbrella, both academically and
financially. Faculty members describe what they say are arduous rules
for promotions. Income from the school’s various programmes flows back
into the university’s coffers, to the tune of more than $11m a year.

The dean says that the one way in which the school can increase the
funds that it can spend at its own discretion is by attracting donations
and endowments. Over the past five years, this has brought in $11m
which, among other things, has allowed the school to establish four
endowed chairs. For fundraising, the school relies heavily on the AUB’s
network of business alumni, many of whom have gone on to work for big
international companies outside the region.

One way for the school to work towards its goal of competing with
important international institutions is by pursuing accreditation from
the US Association to Advance Collegiate Schools of Business, which it
is hoping to attain by June 2009. It will then, relatively rapidly, hope
to acquire approval from the European Foundation for Management
Development’s accrediting arm, Equis.

The one circumstance that the Olayan school does not share with its
international counterparts, and not even with other institutions in the
region, is Lebanon’s political instability and the accompanying security
risk. This is making it both harder to attract faculty and students.

The EMBA programme is a case in point. Launched first in 2003, it has
over the years attracted more than 20 per cent of its students from
elsewhere, mainly from the Gulf. This year, amid the continuing
political crisis that carries the threat of violence, 87 per cent of the
students are from Lebanon while the only other nationality represented
is Kuwait. The figures mask the fact that some of the Lebanese who are
participating in the programme have built their professional careers in
the Gulf, part of a longstanding but accelerating brain drain. Both for
the participants from abroad and for the ones in Lebanon who have busy
jobs, the format of the EMBA, three days every three weeks, is very
attractive because it allows them to continue their work, although they
have dubbed the initial 10-day orientation period, “boot camp” . The
price too, is a selling point, at less than $50,000 its stands at
one-third of that charged by other schools, says Mr Najjar. One way to
sidestep Lebanon’s turmoil is to launch programmes abroad, which the
school is doing for the first time starting next month. One way in which
AUB has dealt with the pressures of Lebanon’s 1975-1990 civil war has
been to sell consulting services in the region. But the new corporate
EMBA programme for the Gulf Investment Corporation in Kuwait will
represent the first time that the school has run a degree programme
outside the campus.

The faculty involved in the programme says Gulf companies have been
bypassing the schools that have been set up in their countries and have
opted for the Beirut-based school instead.

Prof Najjar says several other corporate EMBA programmes are under
consideration. Apart from extending his school’s reach in the region, he
says it will also help his goal of establishing the Olayan school as a
premier research centre with a database of case studies on the Middle
East and North Africa region.

Some facts and figures the school provided:

●The number of full-time faculty grew from 13 in 2000 to 49 in
2007-2008. Staff come from all over the world but there is a heavy
emphasis on returning Lebanese expatriates.

●In 2007-2008, 1,300 students are enrolled at the school, most of them
Lebanese. GMAT scores for admission to the MBA programme are on average
598, which the dean points out is higher that the aspirant peer average
for the AACSB accreditation.

The school requires a two-year minimum prior relevant experience for
admission to the MBA programme. They say all their graduates find
employment within three months and many end up at international
companies such as HSBC, *Morgan Stanley*, Citigroup, and Pepsi.

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