The Institution of Business Management - Essay Example

?Contents Contents Introduction 2 A bird’s eye view of the new and the education it proposes to impart 2 Market analysis of the proposed business school 4 Analysis of UK market 4 Analysis of investment potential in UK education sector 5 Strategies that have to adopted by GSBM 9 Conclusion 10 References 11 Introduction Global School of Business Management (GSBM) is the name of the proposed business school that would be headquartered in London with a global orientation with future plans of expanding into Australia and India. There has been a surge of students that are interested in MBA and it would be proper to take advantage of this enthusiasm among students to establish a business school that imparts relevant education and training. But before starting a business, formulating a business plan is essential as it would clearly enumerate the goals of the new venture and the actions it would take to reach those goals and the resources it would utilize for reaching those goals and, most importantly, the procedures it would put in place to measure the extent to which it has been able to achieve the goals it had set for itself prior to embarking on this venture (Holtz 1994). Thus, a business plan is essentially a road map for the organization to achieve its stated objectives (Tyson and Schell 2008). A bird’s eye view of the new institution and the education it proposes to impart With a veritable explosion in globalization and consequent exponential increase in business activities that span across continents and political frontiers the need for suitably educated and properly trained individuals to manage such gargantuan work load in an efficient and effective manner has also increased manifold. People who have an MBA (Masters in Business Administration) are equipped with precisely those skills that are required to manage transnational corporations and thus the craze for obtaining an MBA degree is increasing by leaps and bounds with each passing day (Scalzo 2008). GSBM intends to impart these much needed skills to young individuals who aspire to be dynamic managers of tomorrow. Thus, the mission statement of this new institution would be: To make students aware of the techniques and tools of management and how they could be applied in practical contexts To encourage students to develop their independent line of thinking and foster innovative ideas regarding various management issues and situations To adequately equip them to navigate the extremely competitive environs of global business To make students aware of cultural differences that exists across countries and continents as that is extremely necessary to successfully conduct a global business. The subjects that are intended to be taught at GSBM would include strategic management, marketing management, human resource management, adequate knowledge and expertise in finance and accounts, proper induction in the nuances of information technology, imparting the tools and techniques employed by managers in collecting business, and, most certainly, a sufficient knowledge about diverse cultures as cultural competency of an organization is imperative to survive and prosper in global market conditions. There is an immense impact of culture on negotiating process as negotiating practices vary from culture to culture and the manner in which people conduct themselves during negotiation process depends almost entirely on the cultural context of each country (Weiss 1994). Thus having a broad idea about prevailing cultures and being careful not to transgress the sensitivities of people belonging to alien cultures is an important lesson that any aspiring global manager needs to learn (Salacuse 1991). Market analysis of the proposed business school The institution would be a business school funded through private investments and would commence its operations initially in London with subsequent plans to open up subsidiaries, franchises or branches in Australia and India. The level of education and the course content would be totally at par with what is being taught in UK universities as an individual having a UK degree generally commands higher salary than fellow aspirants that have degrees from other sources. Thus it is no wonder that overseas students from all over the world come to UK universities to obtain higher education. In fact, overseas students comprise almost 15% of the total student population in UK and they spend ?2.5 billion as tuition fees and annually add another ?5 billion to ?10 billion to British economy (CIA 2010). As GSBM intends to commence its operations in London, a detailed analysis of UK market conditions has been done as success in UK markets is imperative for the institution to plan future expansion. Analysis of UK market Though UK has been the through centuries the accepted seat of advanced learning recent upheavals in global economy and consequent economic downturn has placed the education sector in Great Britain under great stress. There was time when famous UK universities could refuse admission to students at their will but now they are going out of their ways to welcome overseas students. Dependence on overseas students have become so acute that even after the ?7,000 grant that each university receives for every student of British or EU origin, the fees of ?20,000 paid by each overseas student helps in easing the cash crunch in many of these hallowed institutions of higher education (Department of Education, Employment and Workplace Relation 2009). Dominic Scott, the Chief Executive of UK Council for International Student Affairs (UKCISA), candidly stated that had there been no overseas students, many universities would have been forced to close down. But UK universities should resist from increasing their tuition fees too much as it would discourage overseas students from enrolling in these universities. With United States education of nearly equal standard there might be a possibility of large scale exodus of students from UK campuses to those at USA. The situation also throws up another issue, albeit in an indirect manner, and that is, in order to survive, UK universities and schools must retain their superiority in educational standards in order to stave off potential competition from US operators (QAA 2008). Analysis of investment potential in UK education sector Any business environment is affected by both micro and macro forces where micro forces are largely within the control of management and macro forces remain almost completely out of control of management of any individual operator. Hence, analysis of macro forces through PESTLE analysis happens to be one of the primary functions of any promoter that wishes to start a business venture as these are the forces that they would have to accept and formulate a suitable business plan that would make the most of the prevalent situation. PESTLE analysis of MBA students market reveals the following issues: Political Foreign students, suffering from homesickness and battling stresses inalienably associated with adjusting in foreign conditions as they already are, would quite obviously search for foreign destinations that are politically stable. UK with its firmly entrenched democratic setup ensures political stability par excellence. Economic Though one has no option but to admit that current economic scenario is not exactly rosy, overseas students would be able to take it in their stride provided of course the UK universities and other educational institutions do not hike their fees to such a level that it becomes unfeasible for them to continue their studies in this country. The onus is entirely on UK institutions to ensure that things do not reach a breaking point (Lynch 2005). Socio-Cultural Great Britain has always been a multi-ethnic and multi-cultural nation more so with the creation of commonwealth as a legacy to the British Empire that not so long straddled across all the five continents of the world. Thus, UK has never faced virulent ethnic riots that have engulfed other EU countries, like France and, excluding some stray incidents of racial violence, UK has never experienced racial attacks on overseas students that have become an almost every day incident in Australia (Pearce and Robinson 2007). Technological Availability of digital technology and penetration of internet in Unite Kingdom is among the highest in the world and every institution of learning is well equipped with such facilities to ensure students face no difficulty in accessing information from wherever they would like to. This is itself is a very big external advantage of all British educational institutions (Haag 2006). Legal British government is acutely aware that educational standards must never be allowed to deteriorate if the country has to retain its preeminent status as a global center of higher learning. The government has put in place strict norms and issued specific guidelines to all institutions that wish to obtain government recognition and accreditation. Though it might be rather difficult for a new setup to adhere to these norms, it has to be adhered to as government accreditation is an imperative to gain acceptability among students – both overseas and local. Environmental Pollution has always been very strictly handled by municipal administration in London and there have never been any issues about it ever. So, foreign students as well as those that intend to enroll in London based universities can do so without any hesitation. Over and above PESTLE analysis it is also necessary for an upcoming educational institution to conduct a thorough analysis of Porter’s five forces to evaluate the chances it has for surviving profitably by staving off cutthroat competition that has now engulfed the education sector. 1. Supplier Power: Contrary to other business entities, the suppliers for an educational institution are faculty members and support staffs that provide teaching and other related services. As is common in other spheres, good manpower is rare and academicians of repute command staggering remuneration. Though this might sound as a dampener, one must never forget that academicians are not as ‘professional’ as manpower in other sectors and more often than not they are willing to sacrifice money in exchange for respect and an atmosphere conducive to unhindered research and teaching. So, a new institute should ensure faculty members are accorded the highest respect and should also go out to fulfill their requirements in connection with research and teaching activities. 2. Buyer Power: Buyers of a management institute are local and overseas students that an institute wishes to attract. Though they have several alternatives in the form of degrees from Canadian or Australian universities, any well informed student is acutely aware that a degree from a reputed British institute is miles ahead of similar degrees from other institutes in the job market as British institutes enjoy an enviable reputation as advanced centers of quality learning among prospective employers across the world. So, to a certain extent students really do not have much of an alternative if they wish to acquire genuine quality education. 3. Competitive Rivalry: To be honest, the competition that this new institute would face is not so much from overseas universities as it would from other British universities and institutions. Thus, this new institute has to make extra efforts to project itself as the best place to be if one wants to get quality education. Further, the new institute must also prove to prospective students that the institute is acutely conscious of its responsibility and would substantively assist the students to get placements at the completion of their studies. This incentive would surely attract many students. 4. Threat of Substitution: It is a very real threat in case of any new entrant as no matter how efficient and effective the new institute maybe, it does not have any track record to show for proving its superiority. This is an issue that has to be countered with extreme care and caution, especially in case of overseas students who generally depend on word of mouth publicity while choosing foreign universities. 5. Threat of New Entry: There is not much of threat in this regard as British government has put in place such stringent quality controls in the sphere of education that only those that are serious and genuinely intend to impart quality education would be allowed entry. The threat of any fly by night operator luring away students has all but vanished. Both these analyses reveal a situation which though pregnant with immense potential is equally tough to negotiate given the global economic downturn and the furious competition among educational institutions to attract as many overseas students as possible. However, GSBM has in place several achievable and relevant goals and the necessary expertise to make the new business school a financially viable entity. Strategies that have to adopted by GSBM Ansoff’s matrix provides certain important pointers to specific strategies that GSBM needs to adopt to create a niche for itself in this tough market: Market Penetration – The surest way to penetrate a new market is to offer something more than what other established competitors have on offer. GSBM might start with offering free laptops or heavily subsidized accommodation to overseas students as these two offers, especially the latter, would be very difficult for those students to overlook. There is no doubt that such measures would put severe strains on the already limited financial resources of GSBM but it would do well to suffer initial hardship to gain the all important goodwill that will ensure a continuous inflow of students in foreseeable future. Market Development – GSBM should also have plans in place to explore distant markets through teleconferencing and other techniques that are widely used by those that specialize in distance education. This would help it to counter to a great extent the immense competitive pressure in filling up students in real classrooms and also assist it to increase the much needed revenue. Product Development – The field of management education is forever increasing and courses and areas of interest that were never heard of a decade ago have become highly sought after educational qualifications nowadays. A case in point is Hotel Management which none knew about earlier but has become a viable course option now. GSBM would do well to actively explore this option through tie-ups with reputed hotels. Diversification – The most obvious and possibly natural area of diversification of GSBM would be in the area of management research. True this would put a strain on available resources, but it would have a beneficial impact in the immediate future especially if such research is directed towards issues of everyday concern of general public. This would cast the much needed spotlight of publicity on GSBM and would also attract new students that might be interested in working on these cutting edge spheres. Conclusion Taking advantage of the market perception of superiority of British education, universities and institutes of Great Britain have consistently been able to attract students from all over the world. But global economic downturn and almost simultaneous increasing costs of British education have disturbed the stable equation of earlier times. Moreover, other destinations, most particularly USA, have steadily been providing stiff competition to British universities partly because of rapidly increasing standards of their education and partly because of more moderate fees charged by them. Thus the only option available for British universities and institutes is to ensure that the quality of education imparted is never compromised. In such a severe scenario, a new setup needs to not only focus on high standards of education but also embark on serious and concerted attempts at market penetration and diversification of portfolios. GSBM should never lose sight of the fact that students usually are interested in two aspects – quality of education and cost of education. As a new setup it needs to build its reputation by hiring well known and widely respected faculties and continue providing other forms of incentives to students so that come in droves and enroll at GSBM. References CIA. The World Factbook: United Kingdom. October 27, 2010. https://www.cia.gov/library/publications/the-world-factbook/geos/uk.html (accessed January 12, 2011). Department of Education, Employment and Workplace Relation. Students, Selected Higher Education Statistics (DEEWR). 2009. http://www.deewr.gov.au/HigherEducation/Publications/HEStatistics/Publications/Documents/2009/2009AllHIEDProviders.xls. (accessed January 12, 2011). Haag, S. Management Information Systems for the Information Age, Third Edition. Ryerson: McGraw-Hill, 2006. Holtz, H. Business plan guide for independent consultants. John Wiley and Sons, 1994. Lynch, R. Corporate Strategy (4th edition). Prentice Hall, UK, 2005. Pearce, John A, and Richards B Robinson. Strategic Management: Formulation, Implementation and Control. Irwin: McGraw-Hill, 2007. QAA. Academic standards and quality. 2008. http://www.qaa.ac.uk/academicinfrastructure/default.asp. (accessed January 12, 2011). Salacuse, J.W. Making global deals: Negotiating in the international marketplace. Boston: Houghton Mifflin, 1991. Scalzo, C. M. Student Views of Management Skills and Their Future Careers After Using Business Simulations. 2008. http://sbaweb.wayne.edu/~absel/bkl/vol35/35as.pdf (accessed January 12, 2011). Tyson, E., and J. Schell. Small Business for Dummies. Willy Publishing Inc., 2008. Weiss, S.E. "Negotiating with Romans." Sloan Management Rev tew 35, 1994: 51-61. Read More