NEW TRENDS IN MANAGEMENT EDUCATION IN EASTERN EUROPE

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NEW TRENDS IN MANAGEMENT EDUCATION IN EASTERN
EUROPE

• Marc LUYCKX GHISI
• Dean Cotrugli Business Academy
• Zagreb, Croatia.

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NEW TRENDS ?

• Eastern Europe and the Balkans have a hidden
  competitive advantage. They are more open to the
  future than Western Europeans
• Probably because of their recent and older story.
• They have been obliged in 50 years to adopt
  communism and abandon it.

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NEW TRENDS ? II

• They are now eager to find a place in the new
  capitalist industrial world.
• And to join the European Union if it is possible
• But it seems that they also have less objections
  to shift further to the post industrial, post
  capitalist knowledge economy.

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NEW TRENDS ? III

• Comparing my students in Rouen (France) and in
  Zagreb, I find a difference of creativity and
  motivations.
• East europeans are smart and more open to the
  change.
• They are more ready to innovate and to take risks.

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NEW TRENDS ?

• But they have also much less security of
  employment and carreers.
• They are more obliged than others to be proactive
  and creative.
• Their actual insititutions are not always
  transparent. OK. But everyone knows that they
  will change and possibly improve, if they enter
  the EU

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EXAMPLES

• COTRUGLI BUSINESS ACADEMY, in ZAGREB, Croatia, is
  one example of innovation in management
  education. (Drazen KAPUSTA)
•  SEAVUS  is a very innovative company in
  Macedonia.(Igor LESTAR)
• Both will be presented here in this congress.

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CBAs HYPOTHESIS (I)

• Our hypothesis is that we are worldwide going
  full speed towards the knowledge economy.
• EU Lisbon Strategy (2000-2010)
• EU economy is already 45 in this knowledge
  economy, which according to Peter DRUCKER is post
  capitalist.
• The classical Management education prepares
  only for todays industrial, capitalist non
  sustainable, society

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CBAs HYPOTHESIS (II)

• CBA has has decided to have a  two
  legs approach  to management education.
• One leg is education for the industrial
  capitalist economy
• The second leg is education for the
  post-industrial, and post capitalist, knowledge
  economy.

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CBAs HYPOTHESIS (III)

• Now students discover that this second leg
  approach asks from them new skills, and a new
  vision of the market, of concurrentce,
  competition,
• They must understand  intangible assets  which
  are forcing them to take into account new factors
  like the environment and social inclusion.

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CBAs HYPOTHESIS (IV)

• This changes the CEOs image and the companys
  image.
• We must prepare our students for this new world,
  with a new Management education strategy.
• Thus our Management education is really twofold.
• We are preparing our students for 2 societies and
  2 economies.

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CBAs HYPOTHESIS (V)

• Most of our students understand and approve our
  vision and our education proposal. Not all.
• Some are really enthusastic and understand fully.
• We consider our duty to help Croatia to
   leapfrog to the post-industrial society, and
  be excellent in the 21 st century.

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CBAs FUTURE

• Drazen KAPUSTA, CEO of CBA will explain how CBA
  is planning the future

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SEAVUS

• I have recommended SEAVUS, because it appears to
  be one of the most innovative company in the
  region.
• Igor LESTAR CEO of SEAVUS will explain
• How the company works
• What his company expects from Management
  education in the XXIst century

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EASTERN EUROPE

• I believe in the potential of Eastern Europe, and
  specially the Balkans.
• Because they have had hard times and are most of
  the time open to the future, at least among our
  business students.
• They have a potential to be able to leapfrog to
  the next post industrial society, and pull the
  rest of Europe

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THE NEW DEBATE ON MANAGEMENT EDUCATION
Bangalore, august 17,18,2007
Marc Luyckx Ghisi CBA Dean, expert European
Commission
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DRUCKER ON POST CAPITALISM

• We are far enough advanced into the new
  post-capitalist society to review and revise the
  social, economic, and political history of the
  Age of Capitalism and of the nation-state. That
  the new society will be both a non-socialist and
  a post-capitalist society is practically certain.
  And it is certain also that its primary resource
  will be knowledge. (page 4).

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DRUCKER OLD MANAGEMENT

• When I first began to study management, during
  and immediately after World War II, a manager was
  defined as someone who is responsible for the
  work of subordinates. A manager in other words
  was a boss, and management was a rank of power.
  This is probably still the definition good many
  people have in mind when they speak of managers
  and management.

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DRUCKER NEW MANAGEMENT

• The right definition of a manager is one who is
  responsible for the application and performance
  of knowledge. This change means that we now see
  knowledge as the essential resource. Land,
  labour, and capital are important chiefly as
  restraints. Without them, even knowledge cannot
  produce. Without them even management cannot
  perform. But where there is effective management,
  that is application of knowledge to knowledge,
  one can always obtain the other resources.

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QUESTION ON EDUCATION

• Are our management education schools able to
  prepare managers to be responsible for the
  application and performance of knowledge ?
• Naturally we have to prepare them also for the
  industrial society
• But are we sufficiently aware that we have to
  really prepare our students for a different
  future?

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Transition to Transmodern
Death ?
Bangalore, august 17,18,2007
Marc Luyckx Ghisi CBA Dean, expert European
Commission
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WHY KNOWLEDGE SOCIETY?

• UNESCO (2005) has also made an important
  declaration on the  Knowledge society .
• Distinguishing  information society  as still
  industrial with more ICT, and  knowledge
  society  as a new post industrial and
  sustainable/inclusive society.

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WHY KNOWLEDGE SOCIETY ?

• The EU Head of State have decided in March 2000
  that the EU has to be the most competitive
  economy in the knowledge society before 2010.
• And this must happen in a completely sustainable
  and socially inclusive way.
• This is what is called  The Lisbon Strategy
  2000-2010).

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DEFINITIONS

• Data what is on the web, non-organised
• Information is already sorted by  google .
  Overabundance.
• Knowledge is created by human brains interacting
  in networks
• Wisdom takes future into account!
• Knowledge, Wisdom are rare. Not enough.

Bangalore, august 17,18,2007
Marc Luyckx Ghisi CBA Dean, expert European
Commission
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EXAMPLE ASCO

• ASCO won the bid of the EU Commission for running
  its site. Huge contract.
• ASCO has 48 hours to translate into 15 languages
  all productions of the EU Commission.
• Computers and capital are 20
• 80 of the companys value are its people

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A NEW WORLD...

1. New tool of production human brain
2. New CEO Enabling creativity and sharing,
3. New human-centered management
4. New value creation process adding K to K.
5. New Trade from Free Trade to Free Sharing
6. New measurements qualitative intangibles
7. New strategy beyond war win-win not win-loose
8. New definition of Progress qualitative
9. Beyond patenting towards Open Source
10. Beyond pyramids towards networks
11. Capitalizing on cultural capital gender capital

Bangalore, august 17,18,2007
Marc Luyckx Ghisi CBA Dean, expert European
Commission
26
1. NEW TOOL OF PRODUCTION

• The tool of production is not anymore machine
  technol.
• It is human brain networks for sharing
  knowledge in order to create new Knowledge.
• This new tool of production is more important
  than capital and technol.
• Hence Post capitalist society (Peter Drucker).

Bangalore, august 17,18,2007
Marc Luyckx Ghisi CBA Dean, expert European
Commission
27
ASCO

• The new tool of production are the translators
• Better treat them well

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2. NEW VALUE CREATION PROCES

• INDUSTRIAL SOC.
• Add value to object
• From steel to car !
• Tool is Machine
• Humans are cost
• Management is machine-centered
• Machine is central

• KNOWLEDGE SOC.
• Create new Knowl.
• From data info to K
• Tool is Human
• Humans are capital
• Management is Human-centered
• Machine is second

Bangalore, august 17,18,2007
Marc Luyckx Ghisi CBA Dean, expert European
Commission
29
ASCO

• The value creation process here is to apply the
  translators knowledge on knowledge Commission
  texts.
• Translators are the main tool of production.
• Computers are necessary but not first.

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ASCO

• How to control the quality of translations ?
• Through  command and control ? This is
  impossible. What to do?
• Networking Cocktails with all the  Slovenians 
  of Brussels. They all want a good text and accept
  to collaborate in improving the text.
• This full WIN-WIN strategy
• And it worked perfectly.

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3. NEW MANAGEMENT

• Human capital is central because it is caring for
  the tool of production Please come back!
• Thus Management shifts 180 towards human
  centeredness more creativity-centred, gender
  culture centred.

Bangalore, august 17,18,2007
Marc Luyckx Ghisi CBA Dean, expert European
Commission
32
4 NEW CEO FUNCTION

• Old CEO command, control, capture
• New CEO
• enable the creativity of his human capital
  tool of Production
• Enable and creator of networks around his team.
  Cannot control networks!
• Care for the intangible assets brand

Bangalore, august 17,18,2007
Marc Luyckx Ghisi CBA Dean, expert European
Commission
33
ASCO

• A new CEO came in. He had bought the prosperous
  company.
• And he imposed the old industrial style of
  management.
• In 48 hours, half of the personnel was gone
• And the Commission suspended the contract.

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ASCO

• In a few days ASCOs Share hd lost 50 of its
  value.
• An error of management can be terrible and fatal

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5. BEYOND TRADE (I)

• If I exchange an object against money, I loose
  the object. This is trade I win and I loose.
  Win-Loose logic
• If I exchange knowledge, I do not loose my
  knowledge. I win and you win. I am not trading
  anymore. I share. This is a win-win logic of
  sharing.

Bangalore, august 17,18,2007
Marc Luyckx Ghisi CBA Dean, expert European
Commission
36
5. BEYOND TRADE (II)

• INDUSTRIAL SOC.
• Free trade of objects
• Industrial structure
• Pyramids
• Unemployment
• Pollution
• Quantitative growth

• KNOWLEDGE SOC.
• Free sharing of knowl.
• Post-industrial
• Network value creation
• Self-creation of my job
• Dematerialization of production.
• Qualitaitve growth

Bangalore, august 17,18,2007
Marc Luyckx Ghisi CBA Dean, expert European
Commission
37
6. 1. A NEW SYSTEM OF MEASUREMENTS

• Intangible assets is a new concept invented
  by Karl Erik SVEIBY (Sweden).
• They are becoming more and more important in the
  knowledge society
• Because the knowledge society is about knowledge
  which is immaterial, intangible and qualitative.

Bangalore, august 17,18,2007
Marc Luyckx Ghisi CBA Dean, expert European
Commission
38
6. 2. INTANGIBLE ASSETS

• Intangibles assets
• Know how,
• Reputation,
• Trust in the company,
• Structure of the company,
• Strategy (balanced scorecards)
• Relations with personnel,
• Relations with clients,

Bangalore, august 17,18,2007
Marc Luyckx Ghisi CBA Dean, expert European
Commission
39
6.3. INTANGIBLE ASSETS (II)

• Relation with civil society
• Relation to environment
• Relation to our collective Future and
  sustainability
• But also quality of the Networks

Bangalore, august 17,18,2007
Marc Luyckx Ghisi CBA Dean, expert European
Commission
40
6.4.MEASURING INTANGIBLE ASSETS ?

• Stock exchange measurements are still looking at
  financial tangible assets (quantitative) but
  they increasingly look at intangible assets
  (qualitative).
• Today a company is measured more and more by its
  intangible assets.
• Example Mens Wear USA. World Business
  Academy, Spirit in Business.
• See also Neskey www.neskey.com

Bangalore, august 17,18,2007
Marc Luyckx Ghisi CBA Dean, expert European
Commission
41
6. 5. Intangible indicators grow
Bangalore, august 17,18,2007
Marc Luyckx Ghisi CBA Dean, expert European
Commission
42
6.6. GROWING IMPORTANCE OF INTANGIBLE ASSETS (II)
Bangalore, august 17,18,2007
Marc Luyckx Ghisi CBA Dean, expert European
Commission
43
ASCO INTANGIBLE ASSETS

• In two days ASCO shares lost 50, because their
  reputation was down
• In the Commission contractor
• Among the workers producers
• In the consumers community readers
• Intangible assets here are 90 !

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7. NEW BUSINESS STRATEGY/ WIN-WIN

• Old business strategy is warlike. Battlefield
  images are frequent. Patriarchal values dominate
  win-loose
• New business strategy much less violent,
  competition through collaboration is the new
  motto.
• Knowledge behaves like love!

Bangalore, august 17,18,2007
Marc Luyckx Ghisi CBA Dean, expert European
Commission
45
ASCO WIN-WIN

• Impossible for ASCO to have a command and control
  strategy
• It is obliged to have a win-win approach.

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8. NEW DEFINTION OF PROGRESS

• The industrial modern definition of progress is
  quantitative. More is better.
• This definition is UNSUSTAINABLE
• The knowledge society implies a qualitative
  definition of progress.
• Good new! this allows a reorientation of our
  societies towards sustainability

Bangalore, august 17,18,2007
Marc Luyckx Ghisi CBA Dean, expert European
Commission
47
9. BEYOND PATENTING

• The whole of the industrial production system is
  based on secrecy and patenting. I have this
  technology and you have not. So I win!
• Information and knowledge always leak
• In the knowledge economy we will NOT be able to
  maintain secrecy patenting.
• See generic medecines, I-Pod music, etc,.

Bangalore, august 17,18,2007
Marc Luyckx Ghisi CBA Dean, expert European
Commission
48
10. BEYOND PYRAMIDS TOWARDS NETWORKS

• Pyramids are the normal structure of
  industrial organizations
• But knowledge is created only in networks. This
  is the shape that could prevail in the XXIst
  century.
• Pyramids are all in crisis everywhere. In
  Busienss, Governments, Military, Churches,
  NGOs, etc.

Bangalore, august 17,18,2007
Marc Luyckx Ghisi CBA Dean, expert European
Commission
49
ASCO NETWORK !

• Impossible to survive as pyramid!
• The new CEO tried ad killed the company in a few
  days !

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11. CAPITALIZING ON CULTURAL AND GENDER CAPITAL

• Unexpectedly, culture and gender diversity
  becomes important as they feed creativity
• The knowledge management is thus potentially
  socially inclusive and sustainable
• The Lisbon strategy was thus excellent and
  forward looking.

Bangalore, august 17,18,2007
Marc Luyckx Ghisi CBA Dean, expert European
Commission
51
CONCLUSION NEW VALUES

• Underlying values needed in the industrial
  capitalist society are freedom, initiative,
  ceativity
• NEW Values are needed
• Freedom (of sharing)
• Solidarity, Caring, Respect
• Transparency
• Concern for the Common Good

Bangalore, august 17,18,2007
Marc Luyckx Ghisi CBA Dean, expert European
Commission
52
Consequences for the Business (II)

• IN US, only 10 of the Knowledge society
  business has survived the dot.com crash.
  Example CISCO
• Because they have changed
• The tools (ICT)
• The structure of their enterprise
• The underlying vision of their scope and values
  (Verna ALLEE)

Bangalore, august 17,18,2007
Marc Luyckx Ghisi CBA Dean, expert European
Commission
53
Consequences for the business

• 90 of the EU Business leaders stick to the old
  industrial strategies
• More capital advanced technology
• 10 of the EU Business leaders change their
  strategy
• Capital Technology.human creativ
• Entreprise in Network win-win strat.
• Personnel is not a cost but key asset

Bangalore, august 17,18,2007
Marc Luyckx Ghisi CBA Dean, expert European
Commission
54
Business society A new relation

• Industrial objects are tangibles ethically
  neutral.
• Knowledge is intangible always linked to a
  meaning and thus to ethics.
• Producing knowledge thus involves a meaning and a
  business reputation an intangible asset.

Bangalore, august 17,18,2007
Marc Luyckx Ghisi CBA Dean, expert European
Commission
55
Four definitions of entrepreneurship

1. Agrarian Conquer More land
2. Industrial Conquer Markets. CEO controls and
   knows.
3. Knowledge entrepreneur cares for human capital,
   fosters creativity, Sustainable. Facilitator.
4. Spiritual entrepreneur conscious of his
   mission towards the Common Good of Humanity.

Bangalore, august 17,18,2007
Marc Luyckx Ghisi CBA Dean, expert European
Commission
56
CONCLUSION
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CHALLENGES FOR MANAGEMENT EDUCATION

• Most Business schools seem slow to adapt, but
  Business is quick !
• It seems easier to innovate far from the power
  centers Croatia, Macedonia, Bulgaria, Serbia.
• Croatian students response is 60 positive. They
  are the voice of CBA outside.

Bangalore, august 17,18,2007
Marc Luyckx Ghisi CBA Dean, expert European
Commission
58
A NEW CONVERSATION?

• India is a leader in Knowledge economy.
• But is India enough aware of the post industrial
  dimension?
• India has also been the creator of the greatest
  religions in the world

Bangalore, august 17,18,2007
Marc Luyckx Ghisi CBA Dean, expert European
Commission
59
A NEW CONVERSATION ?

• Could we not initiate with India, a new
  conversation
• on Management education in the knowledge society?
• on spirituality and responsibility in this new
  knowledge business
• On wisdom in Business preparing for a really
  sustainable society?

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Some good Books

• Peter DRUCKER Post capitalist society, Harper
  Business, New York, 1993.
• Verna ALLEE The future of knowledge Elsevier
  Science, 2003, USA.
• Jeremy RIFKIN The European Dream when Europes
  vision of the future is silently eclipsing the
  American dream Penguin 2004.
• Ray ANDERSON Mid Course correction 1998.
  www.chelseagreen.com (Interface)
• World Business Academy www.worldbusiness.org

Bangalore, august 17,18,2007
Marc Luyckx Ghisi CBA Dean, expert European
Commission
61
SOME GOOD BOOKS

• Neskey on intangible measurements
  www.neskey.com
• David ROONEY (Australia) Handbook on the
  Knowledge economy 2005.
• Marc LUYCKX GHISI  The Knowledge society
  Building a sustainable future.  editions
  romaines, Luxembourg. 2008. www.leseditionsromaine
  s.com

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SOME GOOD BOOKS III

• Marc LUYCKX GHISI "A winwin strategy for the
  European Union in the knowledge society"
  published in the "European Visions for the
  knowledge age a quest for a New Horizon in the
  information society". Paul KIDD(Ed.) Cheshire
  Henbury, UK, 2007.