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MBAs Guide

A new deal in India for Lancaster University

Westward ho is where the land was supposed to be bright, but Lancaster University sees the light shining from the East. Earlier this year, the university launched a new campus in India in partnership with a local provider of private education, the GD Goenka Group. The arrangement is part of a 21st-century strategy of overseas expansion intended to spread the Lancaster brand, diversify sources of income and broaden the horizons of faculty.

If that sounds ambitious, it is only fair to recall that the Goenka deal follows earlier arrangements with Sunway University College in Malaysia, Comsats Institute of Information Technology in Pakistan and the Leadership Management Centre in Singapore. A link with the Princess Sumaya University for Technology in Jordan is also likely to come into operation in March.

"A key part of our international strategy is to enter into partnerships overseas so we can deliver the Lancaster degree overseas," says Professor Bob McKinlay, deputy vice-chancellor of Lancaster.

There are good reasons for looking east. All the countries with which Lancaster has actual or prospective links are emerging markets with long-standing connections with the United Kingdom. They also have increasingly prosperous middle classes who speak English and can pay sizeable fees.

However, finding a partner in such markets is not so easy. Lancaster made three trips to India and spoke to more than 50 institutions before it alighted on Goenka - and that only happened because Goenka approached Lancaster.

"We got back to them and spent six months sorting out that we could deliver something which was in our interests and matched their interests," says McKinlay.

The GD Goenka Group is a large family-controlled set of enterprises covering industry and travel and tourism as well as education. It runs private schools in India, and was interested in entering the higher education market. The group exemplifies a pronounced trend in emerging markets towards providing higher education privately - a potentially valuable source of deals for universities from richer countries.

The Lancaster deal is with the GD Goenka World Institute which is on the 60-acre site of the GD Goenka Education City, not far from Delhi, India's capital. The agreement envisages using the Lancaster curriculum and faculty to offer courses in business, economics, management and law ranging from undergraduate BA degrees and postgraduate MA degrees in management to a fully-fledged MBA.

Under the agreement, Goenka will provide the infrastructure and buildings, market courses and recruit staff with support from Lancaster. For its part, one of Lancaster's principal concerns in such arrangements is to preserve the integrity of its brand. It will provide the curriculum, assessment and teaching style. Postgraduate teaching will be shared between the two institutions. Participants are registered as Lancaster students.

"The quality side of the degree remains under our control while a lot of the things to do with land, property and so on are done by people much better qualified than us to do it. This is a case where there's a very good complementarity", says McKinlay.

He is less forthcoming, however, about the financial benefits. Lancaster will receive a £700 registration fee for each student. Tuition fees will be split between the two institutions, although in an undisclosed ratio. Given average per capita income in India of about $2,900 (£1,800), Goenka's fees do not look low. The annual fee for an undergraduate degree for what the company's website calls "boys" is the rupee equivalent of about £5,000, while that for "girls" is around £3,500.

How much fee income will accrue to Lancaster is undisclosed. Goenka has about 300 students from its inaugural intake in August 2009, and another 1,000 may join them this year. "This is a long-term relationship, so we'll construct our profile of costs and income on a long-term basis. We're looking to quite significant growth, but how that will translate into pounds, shillings and pence no one can tell," says McKinlay.

The question is even more relevant for the MBA programme. The course is due to begin in August, and 15 students have already signed up. "It looks like a very good crop", says Professor Steve Bradley, associate dean for postgraduate teaching and director of the graduate school at Lancaster. Fees for the MBA will be the rupee equivalent of £18,000, although there will be scholarships and bursaries worth up to £4,000 to relieve the burden. Fees at this level approach those charged by the Indian School of Business in Hyderabad, a kind of benchmark for how Lancaster wants to position itself in the market. "We want to be at the middle to high end of the range," says Bradley.

It was originally envisaged that the MBA would be a two-year, part-time degree, but the course being launched in August will be a classic one-year global MBA. Bradley says the one-year degree seems to be more in demand, but he still expects to introduce a two-year, part-time course in the near future, possibly in 2011.

The global MBA will combine elements of Lancaster's executive and full-time MBA curricula with some adjustments for the Indian market. The emphasis will be more functional than reflective, and less oriented towards business practice than the normal Lancaster MBA. "From the feedback we've had, they want the functional knowledge," says Bradley, adding Lancaster had a similar response from Singapore.

Lancaster is seeking a director of MBAs to coordinate its overseas MBA activities. Goenka will provide a lot of the day-to-day support for the MBA, and Lancaster staff will spend some time at Goenka. The university is also recruiting more faculty to help with teaching there. "We try to encourage a lot of staff to take up this opportunity because it is a good way of expanding their understanding of the world. But we also try to ensure everyone is anchored back here", says Bradley. The east is bright, but it should not be dazzling.