Two years into AACSB's international peer review pilot study, seven more management schools have been selected to participate in the process approved by the AACSB Board of Directors.

The newest wave of this three-year study reaches into Central and South America, Hong Kong, Singapore, and the United Kingdom. The recently selected schools are INCAE in Costa Rica; Pontificia Universidad Catolica de Chile; Fundacao Getulio Vargas in Brazil; the University of Warwick, in the United Kingdom; Chinese University in Hong Kong; Hong Kong University of Science and Technology; and the National University of Singapore.

The Rotterdam School of Management, in The Netherlands, recently achieved accreditation followed by Board ratification at its April meeting and joined GROUPE ESSEC School of Management, in France, as the two schools so far accredited in this international pilot study. Reports from reviews of two Mexican schools, ITESM and ITAM, will be submitted to the Business Accreditation Committee (BAC) in June.

In a recent letter updating members on the progress of the international accreditation activity, AACSB president Joe Alutto reviewed the goals of the international peer review initiative, as well as benefits all members can expect.

The goals of the pilot study are to bring improvement-oriented peer review to members worldwide; to learn from unique approaches to quality education; to test the applicability of AACSB's accreditation standards in other countries; and, to help spread best practices worldwide to accelerate improvement in management education. The AACSB International Partnership Teams for Continuous Improvement Task Force is monitoring the progress of the initiative.

"What we learn as deans about the demands different cultures place upon schools and upon businesses is tremendous," said Larry Penley, business dean at Arizona State University and a task force member who also chaired ITAM's peer review team. "Since U.S. firms are global these days, if we don't learn how people are educating managers in other countries, we really fail to provide the kind of management education that we need at home."

One challenge, Penley said, is to fairly interpret the applicability of the accreditation standards in various regions. One example is the general education requirement that 50 percent of bachelor's degree coursework be done outside of business disciplines. In Mexico, undergraduate accounting education tends to be more technical and adds a fifth year for general education-the reverse of U.S. education.

"Fundamentally," Penley said, "there is little difference in outcome, but if we were to rigorously follow that standard of 50 percent, we would say their education is deficient. That is an example of standards needing to be reviewed in light of different cultures."

Some of the deans who have served on peer review teams said they understand the concerns of those who have not experienced the process firsthand. Yet the deans don't hide their excitement about what they have learned.

Business deans Gary Williams at the University of San Francisco, Leo Murray at Cranfield University in England, and John Seybolt at the University of Utah, have visited ITESM, ITAM and INCAE, respectively. Each has said he would be happy to serve on another team.

Williams is unabashedly enthusiastic about what he saw at ITESM. "Although the accreditation review has yet to be completed, from my perspective this is perhaps the most mission-driven institution I've ever seen," he said. "This is what AACSB's accreditation is all about. Every program is reviewed every year and one of the key elements in that review is, 'How is this adding to the achievement of the mission of both the institution and the undergraduate and graduate schools of management?' The faculty can tell you the mission of the school and the university, with no question. It is embedded."

Williams thinks the school is ahead of most schools in the U.S. in terms of its use of technology, its focus on the learning environment and the resources it has put into those two areas. For example, every full-time faculty member at ITESM is required to undergo 300 hours of training in teaching, provided by experts from all over the world.

"They made a commitment a few years ago to shift to a learning environment. They've been putting enormous resources into understanding what that really means, and then putting a whole series of teams to work on making those shifts in the curriculum and the extracurricular environment. That's a dedication you don't see often in academic institutions. If I could do 300 hours of training, I would jump up and down for joy," Williams said.

For Cranfield's Murray, the most direct benefit of his experience at ITAM was a motivation to look at things newly at his own school.

"All the time I was in the peer review process, I was assessing and thinking about our own school," Murray said. "It was a mini-review process for me. I came home fired up about three or four specific things I'm hell-bent on doing. I've been at Cranfield a long time, and this was a real shot in the arm."

Seybolt, chair of the AACSB task force and also advisor for INCAE's peer review team, recently made his first visit to the Costa Rican school. INCAE was founded about 35 years ago in partnership with Harvard Business School, as one of President Kennedy's efforts to strengthen U.S. ties with Central America.

"INCAE sees part of its mission as 'continentalization,'" Seybolt said. "They have a target, by the year 2005, of having 10 students from every one of the 21 countries they hope to serve in Central and South America. The way they are proceeding, we are going to be very happy they are going through the accreditation process. This will be a good test case for determining if AACSB standards really can be international standards. As more of these schools satisfy current standards, it will be easy to have transparent exchanges of students and faculty and so on."

"Partnerships" is, in fact, the one word William K. Laidlaw, Jr., AACSB's executive vice president, uses to summarize why he thinks the outcome from the pilot study will be so beneficial to member schools. The internationalization of the standards, as challenging as it appears to be right now, will pay off with the huge benefit of U.S. schools having partners all over the world.

"Member schools, in increasing numbers, are forming partnerships with schools in other geographic regions, many are international," Laidlaw said. "We're going to be asked by our accredited schools to evaluate programs that are being offered outside our normal jurisdiction for granting credit. We're trying to stay ahead of this trend, ahead of our membership, and learn what constitutes quality in other cultures, so that we'll be able to evaluate those programs when they are brought forward for review."

Currently, there is no reliable way to know if an institution can be recommended for a strategic alliance, Alutto added. "It will take a while for people to recognize this as a benefit, but I don't think very long," he said. The pragmatic faculty member looking for where to go overseas, or where to send students for exchange programs, will know for sure that the accredited schools are quality institutions.

Besides being able to certify the value of an external partnership, U.S. b-schools themselves need to have internal resources that are internationally savvy. No matter the size or location of a school, its graduates are going to be doing business with the rest of the world.

"It's imperative that we become international faculty and there's no way to do that except by the experience of it," said San Francisco's Williams. "You can't get it out of books and you can't stand back. You have to get in the middle of it. Anybody involved in these international teams is going to gain a great deal."

Beyond benefiting faculty, students also will gain from the learning of the peer review teams, said David Shrock, business dean at the University of South Carolina. As a peer review member for ESSEC, Rotterdam and now with Warwick, Shrock said one of the things he has learned is that European schools pay more attention to preparation of exchange students for international experience, especially at the undergraduate level.

"In many cases a semester of international experience is required," he said. "This wouldn't work for every school, but we could make opportunities more available and make sure students don't pay a penalty for being out of the country."

In what has been something of a surprise to some of those who have worked on the pilot study, the popularity of international peer review is greater than expected. As the numbers of schools participating in different parts of the world grows, the domino effect may come into play.

Javier Chavez-Ruiz, director of the business and accounting division at ITAM, said his school experienced a significant shift in attitude through the course of the peer review. "Two years ago," he said, "we thought this was not worth the effort. We were very skeptical."

Chavez-Ruiz said the skepticism stemmed, first, from the concern that AACSB had a "U.S. frame of mind" that would not be sensitive to his school's problems. The second source of skepticism was the fact that ITAM already had a good reputation in Mexico. "We said, 'What's the big deal about accreditation? What good is it for us?'"

Skepticism turned to enthusiasm as ITAM saw, first, that the peer review team was willing and open to learn, and, second, that there would be benefits for the school on a global scale with international accreditation. Chavez-Ruiz also acknowledged that ITESM's going through the process gave the accreditation process more credibility. Chavez-Ruiz said that the ITAM faculty is eager to implement the team's recommendations.

At INCAE, the first pilot school south of Mexico, the school's rector, Brizio Biondi-Morra, said he always has wanted to pursue accreditation by AACSB. Earlier, INCAE earned accreditation from the Southern Association of Colleges and Universities. "It was an extremely positive and enriching process for us, but the issues are not as targeted as the issues strictly related to business schools."

In the ongoing partnership with Harvard, INCAE developed itself as an outstanding school, Biondi-Morra said. "The problem is that we felt, rightly or wrongly, we had no competition. That can be dangerous because it breeds complacency. How could we know that we were at the level of the top schools internationally?

"We felt a need to do it in a more systematic way and multiply the cross-fertilization potential. Now, we are going to finally get what we always wanted, a lively counterpart that allows us to have an innovative, self-questioning, constant improvement mentality, built in as a system, and institutionalized as a system," Biondi-Morra said.

On the other side of the globe, the b-school at Chinese University of Hong Kong also has been waiting for international accreditation. Its pursuit of the opportunity was slowed, said Kam-Han Lee, dean, because of the uncertainty surrounding the transfer of sovereignty from British rule to China in 1997.

For a long time, Chinese University was the only school in Hong Kong certified by the British government's accreditation system, the dean said. The Chinese also have an education commission that certifies schools. When the university learned that China would continue to give Hong Kong full autonomy to carry on as it had been, the school was able to accept AACSB's invitation to participate in the pilot study.

"With the encouragement from AACSB, we decided there would be no harm for us to join," Lee said. "We feel we can learn from each other and it is only right to take advantage of the opportunity."

The faculty at Chinese University welcomed the opportunity to go through the process, Lee said, because they all knew that AACSB is a serious academic organization and knew the process would be substantive and beneficial.

"To be good is one thing, to have confirmation of it is another thing," Lee said.

The consequences of a lack of such confirmation also motivate some schools' interest in AACSB's accreditation, said Cranfield's Murray. He expects his management school to be reviewed in the second phase of AACSB's plan.

"The presence of accreditation doesn't bring you any business. But the absence of accreditation can stop you from getting business," Murray said. "We have committed ourselves to any accreditation process-the British government, AMBA, efmd, AACSB. We'll go through it to avoid the potential negative of not being accredited when the lists are produced."

Murray, however, is not discounting the value of the self-evaluation and the peer review process to the school. "The self-evaluation exercise is extremely valuable within the school itself. And, the second part is gaining access to the knowledge and experience of a group of international peers who are competent to do it."

School Selection
In his letter to members, Alutto mentioned the criteria used in selecting the schools for the pilot study: reputation for quality, located in a region with well-established management education, representing different cultural environments, and part of a manageable group of pilot schools within AACSB's resources.

"AACSB has tried to select schools where it has some prima facie evidence that they are high quality, that in their region they are seen as having high quality programs," Alutto said. "We try to get multiple sources of information about them. Where are they placing students? Do CEOs in their countries look at these institutions as being important?

"If they are in fact high quality," Alutto said, "what do they look like, how do they compare to institutions with similar missions and objectives. These observations can instruct us in terms of any changes that have to be made."

Alutto said he is aware of concerns some members have expressed about expanding AACSB accreditation to schools beyond North America and thinks such sentiments are a normal part of change. "Both a strength and a weakness is the heterogeneity of the membership. Whatever we do is never going to appeal to every member. The questions being asked are perfectly legitimate questions that we need to respond to and to keep in mind as we do various reviews," he said.

Applying Standards
"One concern is that AACSB will not hold international programs to the fairly strict standards to which domestic members are held, such as faculty qualifications and credit hour coverage of material," Alutto said. "There is a concern this would make for an uneven playing field, where international schools would be held to a different and, in the eyes of some members, not as stringent a set of standards."

While he views fairness as a valid concern whenever standards are interpreted in different contexts, Alutto said internationalization will not lead to a "watering down" of standards, or any sacrifice of quality. "The current standards are mission-driven. Once the mission of the institutions is understood, teams still look for coverage of the common material that they would expect to see for any institution with a similar mission," he said.

While there may be differences in the amount of time invested, or differences about how resources are allocated, as long as the standards are mission-driven, there is enough room to make the interpretations that must be made, said Alutto.

There's no question that the process will take thinking, said Roy Herberger, president of Thunderbird, American Graduate School of International Management and president-elect of AACSB. "In adapting AACSB accreditation principles to the international scene, we are going to be challenged because the principles were not constructed with the international context in mind. We will look at the accreditation principles, but in no way would I or anybody else in the administration of AACSB stand for anything except a continuation of quality as stipulated in the existing standards."

Milton Blood, director of accreditation for AACSB, is unequivocal in his response to any mention of the standards being lowered. "We have not changed the standards in doing international peer review," he said. "We have to interpret the standards to address cultural differences, but the same AACSB standards apply."

Blood also said that no school going through the process is guaranteed accreditation. "The accreditation process is a dialogue that goes on for some time. The issues get discussed and worked out between the review team and the school. At any point the school could say, 'This is forcing us to do some things we don't want to or can't do.'" But, Blood said, "it is more likely that a school and the advisors will find some issue and say, 'This is so different than what we are used to, let's talk about what's going on and learn together.'"

Some people may have the concern that as the number of schools being accredited increases, the value of the credential decreases, Laidlaw said. "I don't know how to refute that," he said, "but I definitely feel that, if anything, we've probably made it harder to get accredited under the current standards."

The pilot study gives AACSB an opportunity to see where standards may have to be adapted to fit different cultural contexts. One of the challenges team members face is to apply the accreditation standards in ways that allow for educational differences in the countries with pilot schools.

One such difference is the 13th year in the elementary and secondary system of some countries, such as Hong Kong.

"How do we count that 13th year?," Alutto asked. "Is it part of the educational experience or not? The reality is that elsewhere there are different elementary and secondary education systems, but that doesn't necessarily affect the quality of programs one way or another. We still have the same kind of outcome measures. We're still looking at the quality of placements and how that's related to the mission of the institution. We're still looking at the quality of the faculty."

Another educational difference that Seybolt said must be questioned during reviews is how MBA programs define their "internship" programs or field projects. He said the internships in some French schools will need review to make sure they are both academic learning experiences and appropriate to a student's managerial future. "They will be looked at carefully to see if they have the kind of rigor that would merit b-school credit," he said.

Latin American schools and Dutch schools rely heavily on part-time faculty, but they are not like the part-time faculty known to U.S. schools who may simply come to teach their course and then leave.

"At ITESM, the part-time faculty is frequently as dedicated and knowledgeable about the institution as any full-time faculty member. We may have to apply different definitions," Williams said, "but I don't for one moment believe that we have compromised any of the standards that we applied to ITESM. But, Seybolt said, "As AACSB adopts international accreditation, we will have to make sure that the same kind of rigor is applied to later schools."

Developing and maintaining the competency of the peer reviewers who will be making decisions for international accreditation will be among the biggest tests for AACSB.

In Murray's view, AACSB will need "good, experienced, qualified reviewers who know what they are doing and have the confidence to apply judgment. You can't specify everything in exhaustive detail."

So far, Blood said, there has been no problem in having people serve on the review teams, but the number of schools being evaluated at one time is being tightly managed.

"We've got a lot of demand and if we don't manage the process carefully, I think we could very easily outrun our resources," Blood said. Keeping the pilot schools at a limited number helps ensure that incoming information can be analyzed properly and that people sent out on teams have the background to do the reviews. "Most of the people on teams have a lot of accreditation experience and a lot of international experience, and teams include people with a strong understanding of the educational culture that is being reviewed," Blood said.

The goal is to include more participants in the pilot study. Additional U.S. based reviewers and those being trained and gaining experience by their participation in the pilot study from other countries will expand the size and knowledge of the pool. In addition, orientation sessions for peer review team members, as well as those being reviewed, are scheduled during the Global Forum in June.

"This is tough work," said Herberger. "This is where we really have to challenge each other-the organizations we're looking at, as well as our own system. No two schools ever are going to be alike, and the environments they are operating in never are going to be alike. There will be challenges to our accepted philosophy of how this accreditation should operate. One of our main obligations is to make sure that what we are learning is integrated into our own accreditation processes."

A concern voiced among a few AACSB members is why should U.S. schools create additional accredited competitors. Alutto's response is that if the schools are of high quality, they already are competitors.

"Besides, AACSB has an obligation to recognize quality management wherever it may be, and to encourage quality in business education worldwide, as part of AACSB's mission," he said.

Even though some schools do not share a large interest in the health of global management education, Laidlaw said, it still is the role of AACSB to sometimes be out in front of its membership on issues that don't look immediately relevant. "In a way, it's comparable to the leadership position AACSB took on encouraging schools to incorporate an international dimension in their curricula almost 20 years ago, and to incorporate work on ethics into their curricula, and to build management of technology into the curricula. What we see is a number of schools that already have established international partnerships and the pace of doing so is picking up very quickly and it appears to cut across the whole range of members. It is not limited to any one segment."

Laidlaw also noted that the last survey of corporate members indicated that one of the most important things the corporations thought AACSB should do was to establish more interrelationships with global institutions. "This is something high on corporate interests lists because they are recruiting domestically and internationally and they are interested in anything we can tell them about overseas schools." An adjunct to this interest is that more international companies also are wanting to be members. "They don't want to be on the outside," Laidlaw said.

Biondi-Morra of INCAE believes that AACSB could play a significant role in shaping business education worldwide through international accreditation. "AACSB has an enormous opportunity to contribute to the upgrading of business education by eventually being a vehicle for benchmarking in regions where this does not exist. Or where the standards are either very low or confused or they don't know how to go about it," Biondi-Morra said. "I'd like to strongly encourage AACSB to continue along that road and not be influenced by any pressure to diminish quality standards."

Cascade Huan, AACSB's director of global accreditation who has been an integral part of the pilot study, is pleased with its progress. "This is not to say that we don't have challenges, for we are in a learning mode," she said. "Once there are a dozen or more pilot schools, I believe we will start asking questions, as they already have been raised, concerning the standards and whether they are written simply to reapply American definitions of quality or whether there is a broader way to write the standards that address quality in a broader pattern."

The eight-member AACSB task force is monitoring and providing oversight of the process so that regardless of what occurs during the pilot study, learning will be the outcome. Alutto expects it to take another year or so of working with pilot schools in various parts of the world to have all the cultural differences rise to the surface and be sorted out. "Once having done that, we can step back and say, 'What does this say about how we react to different institutional contexts?'"

One thing that Laidlaw said he thinks is working so far in a variety of cultures is the basic skeletal structure of the peer review process. "That was one of the hypotheses we wanted to test. Would it work, would it even apply and could we do it in a way that we wouldn't simply be pushing American management principles on other schools," he said.

The information gathered from the pilot study teams' experiences and all of the assessment reports will be forwarded to the Business Accreditation Committee (BAC) for consideration of any recommended refinements in the processes and standards.

"The BAC gives us an objective review mechanism, to make sure we don't get ensnared in 'group think,'" Seybolt said. The BAC has a liaison subgroup with the task force that will meet with them starting in June to assess and analyze how the process worked for the first wave of pilot schools.

Beginning after summer of 1998, the second phase of the plan is expected to go into effect. In this two-to-three year phase, other schools of similar caliber to the pilots will be invited to participate, at the rate of about eight a year.