Alongside accounting and organisational behaviour, business lessons at INSEAD begin with deep discussions on the Israel-Palestine conflict, religion in China and Enrons troubles with the Indian government at Dabhol. With over six dozen nationalities studying together in its classrooms, you can imagine how intense some of these huddles could become.
In this new series covering interesting and different courses and electives in the curriculums of business schools across the world, we speak with INSEADs Prof Douglas Webber who teaches the International Political Analysis core course at the school and ask him why managers need to be increasingly aware of the implications of international politics as they never have had to before.
With campuses in Europe at France, Asia at Singapore and the Middle-East at Abu Dhabi, INSEAD offers one of the most well-known one-year MBA programmes in the world.
(So even though this interview is about a core course, we are still calling the series Eclectic Electives because much of the courses we will cover in the future will be drawn from the list of electives at business schools.)
When was the first time this course was offered at INSEAD? How did the need for this course arise?
I have worked at INSEAD in this role since 1991, which is just over 20 years. I wasnt in this school when this course was first conceived and offered. What I didn’t know was that this course was part of the core curriculum of the MBA programme at INSEAD right from the school’s creation and opening. The course was originally offered under the label of European State Systems. The purpose of the course to convey to the MBA participant an understanding of the framework of international relations – economic, security, political, etc in Europe.
To understand why this course was launched as a part of the core curriculum, one should know that the founding fathers of INSEAD were all young French businessmen with a very strong pro-European vision and were graduates of the Harvard Business School. They had experienced already at Harvard a core course called Business, Government and the International Economy. They wanted something similar at INSEAD. Because they had a pro-European vision, ideals and vocation, they felt it should be part of INSEAD’s mission to convey to upcoming young business people the importance of promoting economic and political integration in Europe. This was of course 15 years after the Second World War. There was a very strong perception amongst cosmopolitan youngsters that a strongly integrated Europe was essential for the peace and also for the promotion of prosperity.
In the course time, INSEAD’s reach expanded from Europe to the wider world in order to set ourselves as the business school of the world. Correspondingly, the geographical reach of the course has broadened. It is now called International Political Analysis and covers the world.
Why is it important for business students to understand international politics?
The way that I illustrate this to our participants when I have them for the first session is simply to open up an international newspaper. I typically take the International Times which I find to be a good international newspaper. I point out to them that the articles on the first few pages of the newspaper relate to political issues. This cannot be simply because the businessmen who read the newspaper simply have a passion for politics. This is a professional newspaper and it’s not designed to cater to leisure interests of business people. It caters to their professional interests. It’s just an indication that a large number of political issues that appear around the world on a daily basis have huge impacts on companies, the way they operate and their upgrading prospects.
What is the typical class size that you teach this course to at a time?
For example, I’m here in INSEAD Singapore campus right now deliver this course at this moment. I teach three sections and each section has roughly 70 to 75 participants. Each session of the course runs for 1.5 hours and the course has 80 nationalities represented in the MBA. We take care that all of these nationalities are represented evenly across the different sections. Each section feels like a meeting of the United Nations. There’s a wide representation and we deal with a lot of political issues.
What is the pedagogy of the course? How much of it is taught through case studies and how much through books and newspapers?
The answer is all of the above. The focus of a large part of the course is on the relations between individual companies and active organisations in a non-market environment that might be synonymous with the political environment. The pedagogical tool is the business school case. Sometimes these will be cases that I or my colleagues have written for this course or we will fall back on cases from the Harvard Business School. The subject is typically a problem or a crisis in relations between a company and an organisation in a non-market environment.
For example, one case we use concerns the big Enron power project at Dabhol in Maharashtra, India. The second concerns the failed attempt by Dubai Ports World to take over the harbour operations of P&O; in te USA which is something that occurred in 2005-06. Another case we look at concerns the controversy around the deep sea disposal of the oil platform Brent Spar by Shell. This happened in 1995 and there was a big campaign launched by Greenpeace which was quite successful. In some of these cases, the conflict was between the companies and political parties or politicians or government. In other cases, it was with NGOs like Greenpeace.
The purpose of examining these kinds of crises was to extract from them, general lessons as to important things companies ought to heed when trying to deal with these issues.
How politically aware do you find your students? Does the awareness level differ with the nationalities and the kind of political system that they come from?
I would characterise the average level of political awareness and knowledge of the participants as quite high. The average has a considerable variation at these levels. I think this can be recorded at two dimensions. One dimension is the nature of their prior educational qualification – whether they have studied social sciences, political sciences, international relations or perhaps history, or on the other hand perhaps they have studied medicine, sciences or engineering.
Clearly, the former group tends to be more knowledgeable, particularly of the relevance of political literature and they also have different disciplinary backgrounds.
The other dimension is the nationality. There, the political knowledge varies according to the country from which they come – whether it has a long-standing democracy, freedom of speech and free political debate or whether it has authoritarian political systems where free political debate has been strongly discouraged if not suppressed.
How does that affect the class discussions? Do they often heat up or do sentiments fire up?
It depends a lot on the topic. When it comes to discussion of micro-political issues I referred to with conflicts, controversies or crises with individual firms and governments or other political actors, the magnitude of the difference of opinion is relatively limited. In many cases, the discussion is sober and factual, if you like.
The second half of the course is devoted to macro-political analysis. Discussions and debates can get fiery and passionate; they can be ignited and driven by the same kind of political, religious or national passions that separates different countries. I can give some examples of controversial topics that have caused quite a lot of dissension in our sessions.
A perennial issue is the relationship between Israel and the Arab states in the Middle East. A second one is the aspect of American foreign policy concerning the invasion of Iraq in 2003. A third one would be issues concerning relations between the Communist Party or the government and the ethnic or religious minorities in China. And any discussion of the nature of the government in China and the likelihood of reform is also a heated debate.
Does the course or curriculum tilt towards any one type of political system – such as democracy and free markets since this is a business school – or is it politically neutral?
The course distinguishes between different political systems to the extent that they can be associated with different kinds of business environments. Obviously we are concerned with different political systems and the extent to which they guarantee the rule of law, the extent to which they provide a relatively predictable or stable operating environment for companies. Here, there are two relevant dimensions. One is the fundamental nature of the political system – whether it’s democratic or authoritarian and to what extend does the country provide free and fair elections, to what extent are basic civil liberties protected and to what is the rule of law observed.
The other dimension relates less to the way in which decisions are made and more to the processes of implementation and adjudication of public policies. There, I would typically distinguish in the course between what I would characterise as bureaucratic systems, where there’s a relatively reliable rule of law and a public bureaucracy which operates according to general rational legal criteria, and a patrimonial bureaucratic systems, where there is widespread abuse of power by political leaders and officials who occupy roles in public bureaucracy and use these uses for maximisation of their own personal interests.
One might distinguish between four types of political systems – democratic bureaucratic systems, authoritarian bureaucratic systems, democratic patrimonial systems and authoritarian patrimonial systems.
Can you give an example of a business case that you teach around the Israel-Palestine conflict and how it is used to discuss business?
I don’t have a business school case which I use to handle this kind of topic. I should’ve clarified before that in the second part of the course I tend to rely much more heavily on published literature – articles published in academic journals, articles published in magazines for a broader, less specialised kind of readership like the American journals for foreign affairs and foreign policy. The goal is much less to relate these conflicts and issues to the operations and situation of individual companies but rather to point out the factors and variables that shape the degree of openness of market and the degree of peace or conflict in the region at a global level. For example, I just took a class on the situation in the Middle East. We had a discussion on the political conjuncture and what’s going on in the region.
The sessions I gave in the course yesterday, we discussed a number of alternatives or theories with national relations, theories that tried to explain war and peace or conflict across the world. We had quite a passionate discussion on the thesis of The Clash of Civilisations which was developed by American political scientist Samuel P Huntington. A good number of Muslim students in the class and other students from the Middle East were very informed and certainly passionately engaged in the discussion about the weaknesses and the strong points of this kind of interpretation or analysis.
I think these kinds of conversations and discussions are highly illuminating particularly for those who do not come from the Muslim world and have no direct experience of Muslim majority countries or these particular conflicts.
How is performance in the course evaluated?
Pretty much on the same lines as we do for other courses. We evaluate the quality of their contribution to class discussions, the quality of the projects which they are required to do in groups for the course and then at the end of the course, there is an individual exam.
How would you say has the need for political awareness in the day-to-day life of a manager changed in recent times?
Let me answer your question in two parts. Firstly, I will give you my own personal view and secondly, I will tell you what our participants think about it. Firstly, the importance of politics, government, non-governmental actors for companies has certainly increased over the course of the last decade or so. I think there are two things that are important. One is that we are observing the rise of the emerging economies (BRICS) and in many of these countries, the state remains a very important political actor. We can’t get past that. So take China, Russia or even India, where understanding the ways in which processes in these countries work, having some kind of access and ongoing productive relationship with the decision makers in these countries is more important than it is in traditional market countries where the role of the state is more limited.
The second thing that’s important is that since the global financial crisis in 2008, the degree of state intervention even in the old market economies has increased quite significantly. The fate of economies and firms depend more heavily than previously, on decisions made or not made by governments. Hence, it has become more important for companies to access and maintain some kind of relationship and dialogue with political decision makers not only with the government but also with the opposition, given how quickly in a democratic country the opposition of today can be the government of tomorrow.
How does the course deal with problems in the BRICS countries related to corruption, crony capitalism or other issues that can affect ethical business?
We certainly do address these issues in the course. This is an issue which I try to deal with by the use of a case related to a Canadian insurance company. What I try to show using this case is how it is possible and feasible to rebuff attempts to resolve the issue effectively for the company without being complicit in corruption and choosing to become engaged in it. I don’t try and develop any kind of analysis which might help managers resolve corruption by acquiescing to it. We rather try to point out what might be possible and effective ways to get around these issues without becoming party to any ethically reprehensible activity.