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The emerging impact of AI on recruitment

How is AI already affecting the recruitment process, and what can we expect to see in the future? AI-oriented tech company, IPsoft, provides an overview

What types of automation solutions are at the disposal of today’s recruitment teams? AI systems are already providing numerous options.

Traditionally, recruiters have often had to log into a system and manually identify the characteristics of ideal job candidates. With conversational AI, a recruiter can use natural language to ‘tell’ the system what type of candidate they are looking for, such as, ‘I’m looking for a compliance officer with at least five years of experience.’

Advanced AI systems can even generate relevant qualifying questions to further refine the search, such as those based on location or language proficiencies. Once the recruiter’s search has been created, the AI system will independently check through numerous candidate databases and job sites. As the system already knows the role requirements, only the most appropriate candidates are shared with the recruiter to take forward.

Augmenting effective recruitment from sift to interview

Talent acquisition is one of the key tasks for recruiters and one in which AI can play a transformative role. But there is no great need to change the way that candidates apply for jobs – ultimately, it’s augmenting the ability for recruiters to work effectively and build better relationships with prospective hires. Traditional recommendations for optimising CV and LinkedIn profiles to best highlight your skills and experience remain important – whether it’s an AI or human searching.

When it comes to the interview, AI software can also design interview questions that are personalised to the person’s professional competencies and experience. This approach helps both the candidate and recruiter: the candidate has the best opportunity to present and discuss their relevant experience and skills, in turn helping the recruiter make better and more informed decisions. It can also help to reduce unconscious bias in questions, as the AI can be trained to disregard certain information and guide the recruiter away from questions that could have previously exposed a candidate to bias.

Between the search for great candidates, the time needed to conduct interviews and the challenge in hiring top-tier employees, recruiting is very resource-intensive. Many organisations – including Hilton and Unilever – therefore already rely on AI to assist HR in the lengthy hiring process. From résumé screening to interviews, AI can help limit the amount of time it takes to narrow down the pool of job seekers.

Stepping towards the hybrid workforce

Recruitment, and indeed HR as a whole, involves many routine tasks, making this an area of potential improvement through the use of AI-powered automation. From the business perspective, freeing up recruiters and HR professionals from high-volume – but not necessarily high-value – tasks, can allow them to address more complex individual needs across the business and apply their skills to other projects, such as setting up a graduate training programme, building relationships with prospects, or researching and refreshing employee benefits schemes. Automation can help make these teams more productive, and ultimately make their jobs more interesting and rewarding.

In the long term, AI is going to fully automate tasks that human employees would rather not do, or simply do not have enough time to complete along with other, more important objectives. This is an important step towards the hybrid workforce, in which human and digital associates work alongside each other to help businesses scale faster with improved productivity and efficiency.

Covid-19 is becoming the accelerator for one of the greatest workplace transformations of our lifetime, with unprecedented changes in people’s day-to-day lives. What we are experiencing today could very well hasten this transition to a hybrid workforce and bring cognitive AI into the workforce even sooner than has been anticipated.

Johan Toll is Executive Director of Transformations at IPsoft, a technology company focused on AI, cognitive and autonomic solutions.

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Reaching the right audience: Business School communications part I

An executive MBA graduate of London Business School’s prestigious Sloan Masters programme, Sarah Seedsman specialises in market research and marketing for Business Schools.

In the first of a two-part interview (you can find part two here), Seedsman considers how the lines of communication between Business Schools and students have changed and how to get your global alumni network speaking one common language – the language of your Business School. 

What has been the biggest change in how students are communicating with Business Schools?

I think the biggest change now is that prospective students are roving across a large range of platforms to get information online.

They are looking to verify what they’ve heard about a Business School and what the official marketing is saying about a School. They move across social media channels and professional platforms such as LinkedIn, where they use the LinkedIn directory to look at alumni profiles and contact them. They also go to student review platforms. A Business School’s website is still a key site of reference and information, but what we’re seeing is an era of moving away from traditional brochures and forms of communication.

At the same time, the personal touch is still preferred in communications. GMAC did a survey last year that indicated how the majority of candidates still preferred email as their official channel of communication. So, some tried and tested methods still hold true.

How do you turn your alumni into active supporters of the Business School?

This has to start offline rather than online. Students who have a very good student experience have much higher levels of pride. There is that nexus of student experience to alumni. It then becomes about the engagement strategy to keep those feelings of pride and positivity strong.

Within that strategy it’s about what channels you use. It is also about using those channels to build a strong community and sense of belonging. That is where social platforms can serve you well when using alumni groups and enabling them to connect online.

If you just think of alumni as just a list of names, it will sound a little bit cold and more clinical. You create a community through advocacy and, in a community, people will do anything for people in need within that community, including the School itself.

Alumni relations teams who communicate with transparency and honesty in a frank but personal way, are going to be able to enrol that alumni engagement. This will come in handy post-Covid-19 when students might not want to study internationally. You want to get your alumni to talk to potential applicants and convince them that this School and this degree is the right choice.

Business Schools are inherently international. How do you ensure that your communications are relevant to a global audience?

This is about understanding your audience and the audience that you want to reach, and why.

Say, for example, if you wanted to raise your School’s brand profile as an institution with great supply chain management faculty research in it and were looking to reach an international audience.  You need to look for research which is relevant to international supply chain. If you are trying to talk to a global audience about supply chain management in one country only, that won’t work.

It’s thinking about the content and the audience and getting that match right. So many issues around business are global so should work for a global audience. If, for example, you have thought leadership on leadership itself, this will vary in different cultures because they will have different approaches to leadership based on their culture and/or political systems. As long as you contextualise what you are sharing, it can still be relevant to a wider audience.

You can target your presence online for certain regions or countries depending on the tools you are using. I think when you are talking to students and alumni, they become part of your community regardless of where they come from, or where they go and work. They speak the language of your Business School and a global Business language.

Is a Business School’s ranking more about its quality or its ability to tell good stories about their Business School?

I would almost say that rankings aren’t about either. There is much debate over whether rankings’ criteria show the quality of a Business School. There are certainly many good Schools that are not ranked.

Telling good stories is interesting because these can either supplement the rankings position you have ended up with if you are not as high up the rankings as you would like to be, or they can provide evidence about your qualities if you are not ranked. 

Prospective students use rankings as a tool and reference. They don’t just look at the ranking number. We are finding that they look deeply into the criteria and profile for lots of different Schools to get a wider picture of whether a School is the right match. This is where good stories and the evidence behind them come in – they show what the School’s strengths are and why they are a particularly good fit for an individual candidate.

Read part II of this two-part interview, which focuses on the use of social media.

Sarah Seedsman is Executive Director for Engagement, Insights and Consulting at Media Minds Global.

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Being a woman leader: ‘man – I feel like a woman’

In 2020, we should be creating organisations where all genders can thrive without adopting the dominant male stereotype, argues Veronica Hope Hailey

I went to university to study for my undergraduate degree in 1975, the same year in which the UK’s first Sex Discrimination Act was passed and the country’s Equality Opportunities Commission was established.

When I entered the world of business, I believed that ability, competence and hard work would get you where you wanted to go. I did not know what I wanted to do and was content that my own lack of direction might be a self-crafted obstacle. I did not believe my gender was going to be a problem. After all, we had an Act of Parliament to protect us against gender discrimination. What could possibly go wrong?

I’m sure I wasn’t conscious of it at that time, but looking back over my career I agree with Margaret Heffernan’s book, The Naked Truth, in which she says: ‘Being smart and working hard are entry-level requirements. But they won’t protect you from the weird experience of being a businesswoman in a world that remains dominated by men and their values. The companies we see today were built by men for men. Reluctantly, grudgingly, women were granted access – at first just to lowly positions but, when self-interest was served, to more powerful positions. We called this “progress”. But everything comes at a price. The price was that we had to behave in ways that men could be comfortable with: we mustn’t frighten them, threaten them, usurp them, or in any way disturb their universe.’

Maintaining perspective

As one reaches the top levels of management, these words remain true; perhaps even more so. Despite working in a seemingly more liberal non-corporate environment than most senior women, I still have the experience of walking into some meetings, dinners or board summits to find myself the only woman in the room. Or, if there are other women there, we are still a significant minority. 

‘Mansplaining’ remains rife. If you don’t know what this word means, Google the feminist author, Rebecca Solnit, who says, ‘men explain things to me, still. And no man has ever apologised for explaining, wrongly, things that I know and they don’t’. In the face of mansplaining, I find there is the risk that in sticking up for myself with evidence of greater knowledge, I will be seen as difficult, or boastful, rather than more experienced.

So what helps me persist? A sense of the absurd, a sense of perspective and a sense of humour are important qualities for any senior manager. I also have the blessing of a large family and the most unlikely feminist husband one could encounter who has been 100% supportive of me as a person, whether I want to be a mother, a rodeo rider or a vicar. He is my greatest critic and my greatest friend. 

I am very fortunate to have another life to fall back into when persisting seems too hard in a very male senior environment. This ‘other life’ has not only been a source of comfort for me, but also a rich source of leadership development. I have built the majority of my personal resilience through dealing with tragedies and challenges in my personal life. At an early age, I was forced into needed, but unexpected, leadership roles that later equipped me brilliantly, at a psychological level, with the mental strength required to be a dean. 

If I returned home stressed or moaning, my husband often asked: ‘Did anyone die, Vron?’ Of course, my answer was always ‘no’, to which he would reply, ‘well, it’s been a good day then’. Dear women readers – do not write off experiences in your personal spheres as tangential to your development and suitability for leadership.

Challenging bias

Leadership can be a lonely and exposed place for anyone, but it can be particularly so for those who find themselves in a minority. In addition, some of the pioneering women leaders of my generation have only succeeded, as Margaret Heffernan describes, by developing a Margaret Thatcher-like carapace as part of their leadership style, taking on extreme versions of the dominant male stereotype. This does not really tackle the problem and, even if women take on these extreme characteristics, they will still never gain entry to the ‘boys club’.

Instead, those of us who are even modestly senior must try to maintain a sense of our true self, use our positions to promote the cause of the next generation of women, and challenge bias (whether conscious or unconscious) when we see it. We also need to ensure that the new constellation of female stars have leadership development opportunities that enable them to achieve their full potential while maintaining an authenticity around their own set of values. 

I feel very strongly that, in 2020, we can, and should, expect our senior male colleagues to call out sexist behaviour not ‘for’ us but ‘with’ us. Men – don’t hide behind comforting words such as your ‘concern’ about the numbers of women in leadership roles. Do something about making those roles and teams healthy places for women to join.

I am hopeful that the paths taken by my five daughters and their friends will be easier than mine, and I want to support their career journeys so that they are increasingly able to develop organisations that have been created by men and women as places in which all genders can thrive. For me, ‘thriving’ would mean that my daughters and their partners could flourish in their workplaces without having to do daily combat with unconsciously held, but biased, expectations on how the two main sexes might contribute or should behave.

Veronica Hope Hailey is University Vice President for External Engagement at the University of Bath and the former Dean of the University of Bath School of Management.

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Meritocracy, bias, and success: reward and recognition for diverse groups

Developing reward and recognition systems for the diverse individuals that make up successful groups could boost access to fair credit, writes Eugenie Hunsicker

I have been involved in diversity initiatives in the sciences for decades. During this time, there have been tremendous efforts in many areas, with particular improvements in policies relating to returning from maternity leave and flexible working. An Athena Swan initiative to celebrate the advancement of gender equality in higher education institutions has also put pressure on departments to consider carefully how all aspects of the work environment should be improved for gender equity.

But progression of women to the top academic ranks has remained stubbornly and depressingly low. In my home discipline of mathematics, the proportion of the professoriate who are women has increased in the UK from 6% in 2011 to 11% in 2016 – a large proportional increase, but overall, still nowhere near parity. 

In a recent conversation about gender diversity in UK universities, one colleague mentioned that, at her university, they had analysed how long it would take the institution to reach gender parity among the professoriate based on continuing with current practices. They discovered that due to having far fewer female academic applicants, a slower rate of female promotion, and greater female turnover, the answer was ‘never’. 

Surely, significant change is an imperative within higher education. Similar stories emerge from business, with the proportion of (white) women managers in US companies with more than 100 employees remaining constant at 29% since 2000, according to a 2016 Harvard Business Review article.

Within academia, promotion has traditionally been based on an individual’s ability to secure funding for, and publish, research. When we look at these factors, we see right away why women are still struggling to reach the highest levels at the same rate as men: they neither publish as much nor obtain research funding in the same quantities as male counterparts (according to an Elsevier report on research performance through the lens of gender, and analysis of data from the UK’s Engineering and Physical Sciences Research Council, respectively).  

On average, women simply don’t measure up in the standard metrics. Some of this is likely to be due to unequal burdens in areas other than research – an issue that universities can – and should – continue to address. But, even given equal research time, as a woman in science, it’s hard not to feel that the deck is stacked against you subtly in ways that individual universities cannot change. 

This is the frustrated mindset I found myself in a year ago when a colleague pointed me to the ‘No heroes’ blog by the London School of Economics philosopher, Liam Kofi Bright. The blog starts: ‘I am opposed to meritocracy,’ which, at first, was a shock to me. After all, surely meritocracy is the right system. But a few hours reading the papers cited there opened my eyes, and meritocracy has become my rant of the year.

Meritocracy

The term ‘meritocracy’ was coined by sociologist, Michael Young, in his satirical 1958 book, The Rise of the Meritocracy. In a 2001 column for the Guardian, he describes his horror at the current use of the word as a positive. He writes: ‘It is good sense to appoint individual people to jobs on their merit. It is the opposite when those who are judged to have merit of a particular kind harden into a new social class without room in it for others… It is hard indeed in a society that makes so much of merit to be judged as having none. No underclass has ever been left as morally naked as that.’

These ideas were taken up again in an article by the author, philosopher and former management consultant, Matthew Stewart, in a 2018 article for The Atlantic, which echoes Young’s ideas: ‘The meritocratic class has mastered the old trick of consolidating wealth and passing privilege along at the expense of other people’s children.’ 

Specifically, the problem with merit as a means of judging individuals is not in its generic usage, but rather when ‘merit’ becomes hardened into a particular set of criteria, the design and award of which are controlled by those who are deemed to already have it, and which are then used to limit inclusion in the new meritocracy.   

Bias

Both Young and Stewart are primarily concerned here with meritocracy as a means of reinforcing class division. But social class is not the only line along which privilege is divided, and reward systems focused on merit have been shown to convey benefit or disadvantage along the lines of gender and race.

In their groundbreaking 2010 paper, ‘The Paradox of Meritocracy in Organisations’, MIT Sloan Management Professor, Emilio Castilla, and Indiana University Sociology Professor, Stephen Bernard, investigated ‘whether gender and racial inequality persists in spite of management’s efforts to promote meritocracy or even because of such meritocratic efforts’. 

They carried out a study in which individuals in managerial positions were asked to make decisions about bonus pay for various employee profiles. They manipulated the gender of the employees in these profiles, as well as whether the company’s core values emphasised meritocracy in evaluations and compensation. They found that, when primed with ‘non-meritocratic’ company values, men and women were given equal bonuses, on average – $399.66 USD for men and $401.66 USD for women. However, when primed with ‘meritocratic’ company values, men were given an average bonus of $420.10 USD, compared to women’s $374.02 USD.  

Castilla and Bernard point to two possible explanations for this phenomenon. One is that, in contexts in which people are primed to believe that they are unbiased, fair or objective, studies have found that they are more likely to behave in biased ways. For instance, when individuals have been given the opportunity to disagree with sexist statements, and therefore establish their credentials as unbiased individuals, they are more likely, subsequently, to choose a male candidate over a female one.    

The second explanation relates to the idea that when people feel more objective, they become more confident that their beliefs are valid, as demonstrated in a 2007 paper co-authored by INSEAD’s Eric Luis Uhlmann
(then at Northwestern University’s Kellogg School of Management) and Stanford GSB’s Geoffrey Cohen (then at the University of Colorado, Boulder).

Blind orchestra auditions and their effect on the proportions of women hired is a well-known example in work on bias and diversity (see box on page 32). Iris Bohnet from the Harvard Kennedy School has pointed out, in an interview for the Harvard Business Review, that moves towards blind auditions met with resistance from orchestra directors: ‘Note that this [change in proportion of women] didn’t result from changing mindsets. In fact, some of the most famous orchestra directors at the time were convinced that they didn’t need curtains because they, of all people, certainly focused on the quality of the music and not whether somebody looked the part. The evidence told a different story.’

Lauren Rivera, Professor at Northwestern University’s Kellogg School of Management, has investigated another mechanism through which an emphasis on merit can in fact result in biased decisions, described in the 2015 book, Pedigree. In a study in which she observed discussions in a firm after the first round of interviews, she found that different demographic groups were subjected to greater scrutiny with regards to different aspects of merit. 

For example, the mathematical skills of women, together with those defined as ‘black’, were much more often questioned than those defined as ‘Indian’ or ‘white men’. Among candidates who made minor mistakes in mathematics, women were rejected for not having the right skills, while men were given a pass, with interviewers assuming they were having an ‘off’ day.  

The same effect is reflected in academia. In a 2017 study of publications in economics, University of Liverpool Lecturer, Erin Hengel, found that, in measures of readability, papers by women in economics journals score 1-6% better than those authored by men, and that the readability of papers by women increases over their careers, while that of those authored by men does not. 

Furthermore, by comparing pre-released versions of papers with published versions, she determined that peer review is directly responsible for about half of this difference. With the additional burden of scrutiny placed on women authors, their lower publication rate can be seen as a result of bias demonstrated by the ‘guardians’ of publishing – referees already among the subject elite – in their judgement of the merit of works submitted.

The success of groups

Recently, there has been considerable work on the benefits of diversity to the success of organisations. The 2015 McKinsey report, Diversity Matters, found that companies in the top quartile for gender diversity were 15% more likely than companies in the bottom quartile to have financial returns above the national median in their industry, and that companies in the top quartile for racial and ethnic diversity were 35% more likely. 

In academia, the majority of published work is collaborative, and studies have shown that in some areas, co-authored papers are more likely to be published in top journals and more likely to be cited. Interestingly, studies by Anita Wooley of Carnegie Mellon University’s Tepper School of Business have shown that the success of groups is not very strongly correlated to individual measures of intelligence (which are correlated to individual success). Wooley and her colleagues found that group success was better predicted by such measures as social sensitivity, turn-taking and the proportion of women in the group.    

However, as is pointed out by the University of Arizona’s Justin Bruner (then at the Australian National University) and Cailin O’Connor, a Professor at the University of California, Irvine, in their 2015 paper, ‘Power, Bargaining and Collaboration’, although success comes from the work of groups, rewards for successful work, such as promotion and raises, accrue to individuals.Their paper demonstrated a model to show how the hierarchical structure of academia can, in particular, lead to the disadvantage of underrepresented groups in bargaining for the credit for group success. Indeed, most individuals viewed by society as exceptionally successful, such as Bill Gates, are seen this way in large part due to society crediting them with the success that is, in fact, the work of a large group. History is rife with examples of individuals, such as Rosalind Franklin (DNA) and Katherine Johnson (Apollo programme) whose critical contribution to group successes have been credited to others who were in a better social position to claim them.  

This suggests one way forward that addresses the difficulties we experience due to a focus on meritocracy (which generally focuses on individuals and on particular characteristics, such as educational success, which are known to be socially linked). That way is to work on developing reward and recognition systems for the diverse individuals that make up successful groups. 

This would involve broad awareness of everyone who contributes to a group and the formulation of reward and recognition systems that provide fairer access to credit for its less prestigious members. This is a difficult challenge, but one that promises both a more equitable treatment of all who contribute, and increased success through the ability to attract and retain more diverse teams to meet the complex challenges that modern society poses.

Eugenie Hunsicker is a data scientist at Loughborough University, where she is also the Director for Equality and Diversity in the School of Science.

She is involved with equality, diversity and inclusion work at a national level, as the Chair of the Women in Mathematics Committee of the London Mathematical Society, Deputy Chair of the Athena Forum and a member of the steering group of the Women in Data Science and Statistics special interest group at the Royal Statistical Society. 

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The business master’s degree: global application and enrolment outlook

Trends in application and enrolment figures for MBM programmes around the world as well as insight into the role of technology and India’s high demand. Will Dawes and Tim Banerjee Dhoul report

The biggest enrolment and cohort numbers for master’s in business management programmes (commonly known as MBMs, or MiMs) were found among Business Schools in Europe (excluding the UK) and India, according to data compiled for AMBA & BGA’s Application and Enrolment Report 2019. The data, which relates to the calendar year of 2018, also shows that India was a clear leader for application volume and competition for places when it comes to MBM programmes.

Applications to MBM programmes

India generated by far the largest number of applications for its MBM programmes (889,730) among the 55 AMBA-accredited Business Schools included in this new analysis for Business Impact. Together, these Schools offered a total of 174 MBM programmes in 2018. 

In India, the overall application volume equated to 98,859 applications per Business School and 42,368 applications per programme, and represented 83% of all applications to MBMs measured worldwide. The next highest proportion of applications was in Europe (excluding the UK). Applications to the region totalled 14% of the global figure, with findings equating to 7,419 applications per School and 2,248 applications per programme. The remaining MBM programmes made up just 3% of the overall application total.  


MBM enrolment in 2018

The majority of the 25,020 enrolments onto AMBA-accredited MBM programmes were in Europe (excluding the UK). There were 16,519 enrolments in the region, equating to 66% of the global total. India enrolled the second-highest number of students (3,945, or 16% of the global share). Meanwhile, Schools in the UK enrolled 2,759 students (11% of the global market of AMBA-accredited MBM programmes). There were much smaller shares of MBM enrolments in Latin America (4%), China (including Hong Kong, China) (1%) and Africa (1%). The regions of North America and the Caribbean, and Oceania, each comprised less than 1% of the global share of MBM enrolments (124 and 225, respectively).  

Programmes in Europe (excluding the UK) and India had the largest average cohort sizes (250 and 188 enrolees, respectively). Other regions had substantially smaller average programme sizes, the largest of which were in Oceania (75) and the UK (67). In descending order, the remaining regional average enrolees per programme were Latin America (50), Africa (43), China (including Hong Kong, China) (32) and North America and the Caribbean (12). 

MBM programme delivery 

MBM programmes offered by AMBA-accredited Schools in 2018 were typically delivered in a physical classroom setting (89% of all programmes), while 10% were conducted in a blended format and 1% were offered fully online. It should be noted that not all Schools in our sample provided data on the format of study, meaning that these statistics should be treated with a degree of caution. Nevertheless, the findings offer an indication that blended MBM programmes were more common among those on offer in North America and the Caribbean (70%) and in Europe (excluding the UK) (15%). In the remaining regions, all programmes were delivered exclusively in the classroom, other than in the UK, in which the equivalent figure was 98%.

Gender diversity on MBM programmes  

Overall, almost two fifths of applicants to MBM programmes in AMBA & BGA’s sample were women (37%), while more than three fifths were men (63%). Although there is some variation throughout the world, the global proportion of women who applied to an MBM programme was substantially skewed by the large number of Indian applicants overall. Women applying to programmes in India made up a third (34%) of all applicants in the country and had a large impact on the overall proportion of female applicants worldwide. Indeed, when India is excluded from the global figure, the average proportions of male and female applicants were equal (50% each). 

Looking at individual regions, India’s proportion of female applicants was the world’s lowest, and only Latin America (38%), Africa (47%) and Europe (excluding the UK) (49%) had a minority of female applicants for MBM programmes among AMBA-accredited Schools in 2018. There were more female than male applicants in the UK (53% of applicants were women), North America and the Caribbean (64%), China (including Hong Kong, China) (67%) and Oceania (69%).  

Globally, there was a slightly more equal split when looking at the gender balance of those who enrolled on MBM programmes in 2018 – 54% of those enrolling worldwide were men, and 46% were women. The proportion of women enrolling increases slightly, to 48%, when India is excluded from the global analysis. MBM programmes in India were again below the global average, with women making up 31% of those enrolling. In some other regions, female enrolees were in the majority. This included North America and the Caribbean (55%), Africa (58%) and China (including Hong Kong, China) (66%).

International and domestic
applications and enrolments

Applications from individuals based in the country in which an MBM programme was offered made up 95% of global MBM applications. However, this figure falls to 70% when excluding results from programmes in India, to which all applications came from domestic candidates. In addition to India, regions with large proportions of domestic applicants included Latin America (94%), North America and the Caribbean (88%), China (including Hong Kong, China) (88%), Europe (excluding the UK) (81%) and Africa (62%). In contrast, applications from overseas comprised the great majority in the UK (97%) and Oceania (86%). 

Seven in 10 (71%) enrolments were domestically based, a figure which drops to 67% when excluding India, in which all enrolments were from within the country. The balance between domestic and international enrolments followed a similar pattern to applications, albeit with some
small variances. China (including Hong Kong, China) and Africa had higher domestic enrolments than applications (88% and 62% of enrolments, respectively, were domestic).  Meanwhile, Oceania and Europe (excluding the UK) had a slightly higher proportion of international enrolments than applications (91% and 25%, respectively). 

A UK Business School leader who wished to remain anonymous commented that the influence of students from China is a significant factor in the overall demand for MBMs, and most notably in terms of the demand among international students. ‘There is certainly increased demand from China, which is probably due to the number of individuals wanting to get an overseas qualification.’ 

Survey sample and background to MBM analysis 

AMBA & BGA’s recently released Application and Enrolment Report 2019 outlines the current status of the AMBA-accredited MBA market. The report describes the growth in both MBA applications and enrolments at AMBA-accredited Business Schools, much of which was driven by increased demand in China (including Hong Kong, China). The study highlighted that, despite the geopolitical and economic pressures in the global economy, AMBA-accredited Business Schools are performing strongly. 

As part of the data compiled for the report, 55 AMBA-accredited Business Schools also provided data on a range of master’s in business management programmes (commonly known as MBMs, or MiMs). These generalist, post-graduate, and predominantly pre-experience, degrees are most often designed to provide a thorough grounding in the theoretical fundamentals of management, accompanied by substantial practical input. As such, it typically provides a foundation for individuals starting a career in management and has been identified as a particular area of interest for members of the Business Graduates Association (BGA), which aims to ensure graduates of all levels of business education commence their careers with a firm understanding and appreciation of the principles of responsible management, positive impact and lifelong learning.   

MBM programmes analysed in this report were delivered at Schools in the following locations: Europe (excluding the UK) (36%); the UK (25%); India (16%); China (including Hong Kong, China) (7%); North America and the Caribbean (5%); Latin America (4%); Oceania (4%); and Africa (2%). This is the first year in which AMBA & BGA has conducted a separate analysis of MBM programmes offered by AMBA-accredited Business Schools responding to its annual Application and Enrolment Report. In the future, we would like to track trends in this dataset over time and, where possible, incorporate the admissions experiences of BGA Schools. 

To learn more about AMBA & BGA’s research projects and to access recent reports, including the Application and Enrolment Report 2019, please visit: www.businessgraduatesassociation.com/about-us/research 

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Understanding the drivers and challenges of sustainable business

Sustainability in business has become a vital selling point, but companies remain value-maximising entities, writes Audencia Business School’s Iordanis Kalaitzoglou

In response to spiralling scientific evidence for climate change, increasing numbers of countries are introducing environmental legislation. Global political will in this area appears higher than ever, as evidenced by the 2015 UN Climate Change Conference (COP21), 2016’s Article 173 of the French Energy Transition Law, and the European Commission’s action plan on sustainable finance. There has also been 2019’s election of Ursula von der Leyen, who put environmental action high on her agenda as President of the European Commission and successor to Jean-Claude Juncker.

However, empirical evidence suggests that much environmental legislation is either overly ambitious or inadequate, meaning that the vast majority of countries do not meet their environmental targets. The usual explanation for this is that environmental action is not cost effective. Yet this is inconsistent with the fact that, over the long term, energy generation from renewable sources will become stable and economically viable. For example, around 75% of coal production in the US is now more costly in generating energy than solar panels and wind turbines, according to a study for Energy Innovation, a San Francisco-based firm that analyses clean energy and climate policies. 

Wish lists rather than concrete plans

Unfortunately, the political will to disengage from fossil fuels does not seem to be strong in the US, while other countries, such as Brazil and Turkey, prioritise economic objectives over environmental goals. 

This leaves global energy summits seeming more like an exercise in creating wish lists than opportunities to formulate concrete action plans. In fact, evidence shows that very few countries address their environmental impact adequately, with the result that global greenhouse gas emissions are reaching ever-increasing heights. Several reports stress that we are the last generation that can act on preventing climate change. They also suggest that unless significant action is taken now, the ensuing crisis will lead to worldwide social, political and financial turmoil on a level not seen since the Second World War. Even so, the setting of high targets while carrying on with ‘business as usual’ seems to be rooted in some strong macroeconomic trends.

Environmental corporate incentives

The warning signs are already here. July 2019 was the hottest month ever recorded on Earth. Even if we put this fact aside and look at the issue from a simple business standpoint, the growing sense of urgency around climate change is creating a strong demand for more ethical entrepreneurship and for products that address environmental concerns. In other words, sustainability has become a selling point as well as being necessary for human survival. Companies therefore have a strong incentive to show that they are in line with their stakeholders’ environmental concerns. 

A significant number of companies are beginning to cater more overtly to the ever-increasing demands of their stakeholders, to present a greener profile to their customers and suppliers, and to society in general. This shift in public demand means environmentally friendly activities have become commercially valuable. An environmentally friendly social profile has become so popular that there are now agencies that evaluate firms’ environmental performance and financial entities that focus exclusively on green firms. 

But if environmental friendliness is so high on so many companies’ agendas, why are so many companies, and countries as a whole, still not aligned with officially recommended environmental targets? Are these companies’ actions simply inefficient, or are there other factors holding things back? 

Most likely, it is both.

Financial corporate incentives

Companies are value-maximising entities. The primary objective of management is to increase the wealth of shareholders because they are hired by, and answerable, to them. Over the past few decades, it has become generally understood that value maximisation is an holistic approach that doesn’t just include financial objectives, but encompasses anything that can affect the profile of a company. In that spirit, companies are inclined to offer what their stakeholders request in the best possible way. If an environmental profile is in demand, it is advantageous for a company to adopt it. 

Yet, sacrificing consumption power in favour of the environment does not resonate unconditionally with consumers. As the ‘gilets jaunes’ protests in France, or US coal and oil protectionism measures designed to save jobs, have shown, this tends to influence government actions. 

A sharp shift towards a zero-carbon economy would require a drastic shift in consumption habits. For example, energy generation from renewable sources, although abundant at times, is not stable and might result in periods of low energy generation. This might require electricity consumption (industrial and retail) to be adjusted, but current demand for electricity is completely inflexible at a global level. 

Similarly, green products might require higher production costs, which would make them more expensive. Energy-intensive industries and price-sensitive consumers are then more likely to prioritise financial needs over environmental ones. 

Companies therefore often face a trade-off between being environmentally friendly and price competitive. These two things are not necessarily aligned, so companies choose to optimise, rather than specialise. The criterion they optimise is their value-maximisation objective. This is somewhat sensible from an economic point of view, since it is more realistic to adopt new measures gradually, rather than to induce a shock. It is also the spirit of EU policies, in which promoted incentives focus on becoming smarter rather than better. This equates to a period of transition, during which individual firms and national economies are expected to move gradually towards a zero-carbon state. 

Companies’ incremental adjustments are looking to find the right balance between environmental friendliness and value maximisation. This is why their current actions might seem inefficient: the macroeconomic trends driving these actions do not yet support a full environmental engagement.

Window dressing vs. lobbying 

The economics of energy transition create both financial and environmental incentives, so different firms should be expected to pursue different strategies, according to their energy profiles. 

For example, it would be much more difficult for an energy-intensive firm, or a fossil fuel company, to change its business model drastically in order to be more environmentally friendly, because this would involve significant investment and cost. 

However, since a company’s profile is often improved if it makes this change, or at least gives the impression that it is doing so, businesses might take less conventional actions to preserve or increase their value in this way. There are two types of corporate activity that are observed frequently in this arena: ‘window dressing’ and lobbying.  

The private sector is well known for trying to bend political will towards its financial incentives by lobbying decision makers. But, when it comes to environmentally sensitive issues, these actions are often met with firm public opposition. The consumer base, especially in mature economies, is becoming more environmentally sensitive and lobbying activities that are perceived to have a negative environmental impact can also have a negative impact on the companies involved. 

Companies have been very active in trying to improve their public profile with respect to their environmental impact, but most continue to lobby at the same rate. 

In some cases, as in the examples of the big five fossil fuel companies (BP, Shell, ExxonMobil, Chevron and Total), PR campaigns are designed to show that attempts to reduce environmental impact are being made, while spending continues out of the public eye on current – and not so environmentally friendly – activities and/or lobbying. 

Again, a drastic shift in stakeholders’ consumer behaviour would help reduce the impact of lobbying, either by supplying a financial objective for these firms, or through changes to the political agenda and reforms to the relevant legislation. 

Is it all that bad?

Greater environmental awareness and a demand for more sustainable products create the foundations for a potential shift in corporate actions.

Although the demand for environmental friendliness among stakeholders may be best described as ‘lukewarm’, with an electoral base that leads governments to pursue a very slow shift of resources and priorities towards environmental policies, there is significant progress that partially mitigates the impact of the rigid demand for energy. 

The most encouraging progress has perhaps come with the realisation, among stakeholders, that to promote more environmentally responsible policies, they must mobilise the aggregated demand towards more responsible consumption. This can be done by quantifying their arguments so that people can understand and compare the relative costs – while also making use of social media platforms to nudge people to amend their spending habits.

Shifts in aggregated demand would force companies to innovate and offer
more environmentally friendly products, with the support of governments. While current levels of change are insufficient, there have been notable developments. In the finance industry, for example, terms such as ‘climate change risk’, ‘social cost of carbon’, and ‘carbon price’ have entered the vocabulary, and green financial products have emerged. As little as 10 years ago, this would have sounded far-fetched. 

The public and private sectors both serve a social purpose and are supposed to meet the needs of their stakeholders in the best possible way. Consequently, if the social groups they serve amend their attitudes at an aggregated level, it is in the best interests of both the public and private sectors to follow. In other words, if everyone played the same game, everyone would win. However, considering the demographic composition of the electoral basis, this should not be expected to happen any time soon.

Iordanis Kalaitzoglou is a Finance Professor at Audencia Business School, France. 

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Designing a tech MBA

In an age of technology, many students are seeking a specialised MBA for the tech sector or tech-centric companies, argues IE Business School’s José Esteves

Technology has emerged as one of the most relevant economic sectors in recent years, with technological innovation driving growth and labour productivity across all areas of the economy. The adoption of emerging information technologies is influencing employment and remuneration, requiring fresh skills, creating new jobs, and not only changing the nature of tasks in which workers are engaged but also the workplace environment.

At IE Business School, we believe the best way to meet these challenges is by designing a specialised MBA for the tech sector and/or for tech-centric organisations.

Why a tech MBA?

We identified four key business realities that a tech MBA can address: the rise of technology ecosystems; digital transformation; constantly evolving technology; and technology shortfalls.

1 Technology’s contribution to economic growth and labour productivity 

In a 2017 report, Huawei and Oxford Economics estimated that ‘the digital economy is worth $11.5 trillion USD globally, equivalent to 15.5% of global GDP and has grown two and a half times faster than global GDP over the past 15 years’. An analysis of the top US companies by market capitalisation shows that tech companies are the highest valued, among them Microsoft, Apple, Amazon and Google. In the past two years, some of these companies have reached capitalisation of $1 trillion USD.

2 Digital transformation 

The vast majority of companies are engaging in transformation initiatives as part of a rethink of their global strategies, business models, and organisational approaches.

3 Evolution of technology 

While the accelerated adoption of technologies, such as cloud computing, robotic automation, AI, machine learning, the internet of things (IoT), and 5G technologies is promising for the tech industry, it also demands continuous updating of skills and knowledge. 

New jobs will undoubtedly be created in this scenario, and the demand for data sciences, coding, digital ecosystems, and e-commerce will continue to grow. 

However, it will be difficult for workers to develop the skills needed in these areas. The mismatch between the skills required and workers’ capabilities will necessitate the expansion of retraining programmes.

4 The global tech talent shortage

Technology is creating more jobs than any other, but by 2030, it is estimated that the technology, media and telecommunications sectors will have a shortfall of 4.3 million workers worldwide, according to a 2018 report by Korn Ferry. 

Shortages in these industries are expected to cost $449.7 billion USD in unrealised revenue, while fintech and BFIS (banking, finance, insurance, and security) will have a shortfall of 10.7 million workers by 2030, resulting in $1.3 trillion USD in lost revenue. 

The situation when focusing in on specific countries and regions is similar: the European Commission, for example, has forecasted that 100,000 data-related jobs will be created across Europe by 2020. Since 2010, the number of tech-related jobs in the US has increased by approximately 200,000 every year, and the US economy is increasingly reliant on tech labour for its survival. Based on data from the US Bureau of Labor Statistics on projected employment in the year 2026, service-providing industries are expected to account for the majority of 11.5 million newly created jobs. 

Diving deeper into technology

IE Business School decided to create a tech MBA after listening to recruiters and students. Students are increasingly interested in working in the tech sector, or for tech-centric companies, or in tech-demand roles. In response, two years ago, as part of the International MBA programme, we launched the TechLab. 

However, we noticed that some of our students were looking for more. They wanted to dive deeper into technology – not only learning about the latest trends, but also being able to understand and leverage these emerging technologies and tech ecosystems fully. At the same time, our corporate partners were increasingly looking for graduates with a clear understanding of technology and business analytics as well as business acumen. 

The ingredients of a tech MBA 

IE Business School’s Tech MBA is a tech-centred programme that blends three modules – ‘business mastery’, ‘technology immersion’, and ‘transformational leadership’. Each of the three modules is outlined in more
detail below: 

1 Business mastery 

At the heart of any MBA programme, whether general or specialised, lies a curriculum in business management, strategy, and economics.

In the case of our specialised Tech MBA, this part of the curriculum is designed to ensure students are equipped with the knowledge and lasting growth strategies that every tech-centric business needs to succeed in the current landscape. From the very beginning it applies case studies and examples taken from the tech context.

2 Technology immersion 

This module provides a deep understanding of the tech ecosystem, exploring the processes and challenges that underpin technological innovation, and endowing students with the skills needed to manage within firms that are focused on the areas of tech and innovation.

3 Transformational leadership 

The leadership module prepares students to be leaders who can design, drive and manage change by expanding their mindsets, skills and tools in a volatile, uncertain, complex and ambiguous (VUCA) world of work. 

This is the glue that holds the programme together and differentiates our students. It is the vital element that will equip them to lead the future.

We cover core courses in all three modules, which are fully integrated. The programme runs for one year, across four periods, and the first two periods include tech-related industry forums which take an experiential learning approach and provide a practical perspective with workshops on fintech, insure-tech, edutech and so on, all featuring leading experts.

The tech MBA learning journey

The learning journey ensures that students acquire technology, management and transformational leadership competencies, using an integrative approach made up of three phases: ‘exploration’, ‘action’, and ‘immersion’.

During the ‘exploration’ phase, students discover tech and business through specialised courses. In the ‘action’ phase, they undertake a specific technology experiential learning approach, and in the ‘immersion’ phase, they choose from electives to sharpen their business and tech knowledge.

During the programme’s core modules, the focus is 55% on tech and 45% on business. However, electives mean students can customise their tech MBA to their specific needs. If all the electives chosen by a student are tech-related, the percentage of tech courses covered by the end of the MBA would be more than 75% of the total studied. 

‘Tech career treks’ take place regularly throughout all four periods. Students spend two to three hours visiting a global tech company with the objective of learning about its company culture and priorities, and also learn more about career opportunities where applicable. Treks typically happen within Madrid or Barcelona.

The School’s Tech MBA will be run separately from its International MBA. We will also create a specific portfolio of electives for the Tech MBA. However, we will allow the students of both MBA programmes to share the portfolio of electives. Plus, students will be able to network across the two programmes during extracurricular activities and events (for example, the School’s TechIE annual conference or IE Global Innovation Challenge).

The classroom experience

Students who feel they would benefit from one-to-one time with professors, or who prefer working in groups, should consider on-campus MBAs as these allow for greater face-to-face interaction with classmates and instructors, not just academically, but also socially. 

The social events that materialise from being on campus also provide valuable, yet unofficial, networking opportunities. Students should never underestimate the opportunities that a coffee break can generate, and will want to take advantage of facilities and resources on campus, including extracurricular activities, lectures, libraries, and athletic facilities. 

In addition, attending a full-time MBA provides easy access to advice, career counselling, and other on-campus student services and activities, all of which help students build a robust professional network.

José Esteves is Associate Dean for the International MBA and Tech MBA programmes at IE Business School, Spain.