Schulich students take a lesson from the sub-prime Medicis

It’s 2001, and the business world is reeling as Enron Corp., one of the world’s biggest energy companies, collapses amid revelations of fraudulent financial statements and billions in concealed debt, wrote the Toronto Star Sept. 8 in a special section about MBA programs.

To many, it’s a new low in business history. But maybe it’s not. Go back about 70 years, to 1932, when Ivar Kreuger, head of the giant Swedish Match company, commits suicide, spawning international headlines and igniting a financial scandal that costs American investors more than $250 million and leads to the formation of the Securities and Exchange Commission.

Kreuger, a world-famous business leader and Time magazine cover boy, had been running an early version of a Ponzi scheme, paying dividends out of the company’s capital, falsifying the books, running dummy corporations, even forging Italian bonds to raise cash.

Today, few remember Ivar Kreuger. That is, except for the students in Managing Globally, Prof. Matthias Kipping‘s MBA course at the Schulich School of Business.

Unlike most MBA courses, Kipping’s course focuses on the past, not the present, and on what we can learn from business leaders’ mistakes, as well as their successes.

"I was amazed at how many parallels there are from even 500 years ago," says Nik Ljiljanic, an executive MBA student who took Kipping’s course this year.

He points to the Medici family, one of the high-profile subjects of the course. The Medicis built a powerful financial empire in Europe during the 15th century before finally being done in by bad loans to nobles, who were clients. The Medici bank’s failure seems to eerily foreshadow the recent U.S. banking crisis.

Although scandals, such as those of Bernie Madoff and Ivar Kreuger, seem to be more and more common these days, that may be just because we’re paying more attention, Kipping suggests.

"We’ve had corporate malfeasance as long as we’ve had business," he says. "My course tries to teach people not to forget."

Ontario MBA schools target demand overseas

Three years ago, Raveesh Khosa was working as a technology consultant in Mumbai. He liked his work and enjoyed his life, but he knew he’d have to get an MBA if he wanted to make a good living and get a better job, wrote the Toronto Star Sept. 8 in its special section on MBA programs.

But Khosa didn’t just want any MBA, he wanted one from an international school.

Khosa considered a few schools in North America, but settled on York University’s Schulich School of Business, not only because it’s a respected institution, but because the first year of the program was taught in India, at one of the country’s leading universities. The second is taught in Toronto.

"You get exposure to a foremost Indian school and a top Canadian school at a cheaper cost," he says.

Schulich is just one of many North American MBA schools offering its programs in places such as India, China and Hong Kong.

While the school currently partners with SP Jain Institute of Management and Research, a Mumbai-based institution, it will open its own campus in Hyderabad in 2013.

Dezsö Horváth, the school’s dean, has made a point of attracting international students. About 70 per cent of the students in the Canadian-based MBA degree are from outside the country, but the dean wants the University to become an even bigger international destination.

"We’re one of the most global schools today," he says. "But just like corporations that have a global business, schools have to go global."

While the two-year Schulich MBA in India program has been successful, most emerging market students can’t afford the costs of living abroad, Horváth says. The MBA schools in developing countries aren’t of the same quality as international ones, so demand for affordable, world-class education in domestic markets is high.

But Canadian universities can’t just set up shop in any country. Schulich‘s only building an international school now because, until recently, India’s legislation would only let outside schools partner with homegrown ones.

Horváth says it’s hard to work in a country such as China, because it requires schools work with domestic universities, and the better Chinese schools don’t want to partner.

Energy clubs well established at business schools

The idea of this kind of [energy] club for MBA students is well-established at leading business schools, wrote the Toronto Star Sept. 8 in a story about an energy club at Queen’s University.

The Richard Ivey School of Business has a sustainability initiative for MBA students, involved in the energy and green fields. The University of Toronto’s Rotman School of Management, has had an energy and natural resources club for many years. And the Schulich School of Business at York University has two clubs focused on green energy.

Time for Apple to open its factories

In a Sept. 8 column about Apple Computer’s factories, columnist Michael Skapinker of London’s Financial Times wrote that in 2005, Nike posted the names and addresses of its suppliers on its website. Levi Strauss and Adidas, among others, have done the same.

It wasn’t an easy decision, David Doorey of York University [School of Human Resource Management, Faculty of Liberal Arts & Professional Studies] in Toronto says. Nike spent some years resisting student protesters who demanded to know where their campus clothing was made. Nike was worried that campaigners would uncover even more abuses at its factories and that competitors would steal its intellectual property.

In fact, Doorey says, once the information became public and rivals realized they were using the same factories, they found that they could cooperate to enforce common standards. Suppliers whose locations were published had an interest in abiding by those standards too.

Switch hands to prevent overeating, says study 

A new study from psychologists at the University of Southern California shows how subtle changes in circumstance, such as changing the hand you eat with, can result in more moderate levels of consumption, particularly if you’re not even enjoying the food you’re eating, reported Postmedia News Sept. 8 in a story that also quoted other researchers.  

Caroline Davis, a health science professor at York University [Faculty of Health] in Toronto, said addictions to food and drugs tend to be based on many things, including situational factors and the specific substance the person is craving.

"(Overeating is) such a complex behaviour that we know all kinds of other things contribute," she said. "I subscribe to the idea that, for particularly palatable foods like sugar and fat and highly processed foods, we have the potential to become physiologically dependent on them the same way people can become physiologically dependent on other substances."

On air

  • Allan Middleton, marketing professor in York’s Schulich School of Business, talked about the Ontarion provincial election, on Toronto’s 680 News Sept. 6.
  • David Wiesenthal, psychology professor in the Faculty of Health, talked about horn-honking while driving, on CBC Radio’s "Metro Morning" (Toronto) Sept. 7.
  • Alexandre Brassard, political science professor at York’s Glendon campus, spoke about the Ontario election, on RDI’s "Telejournal Matin" (Montreal) Sept. 7.