Your eye immediately alights on the quasi-baroque entrance to the European School of Management and Technology (ESMT). It stands four storeys high, is adorned with fine sculptures and two golden balconies. But the façade is probably fake and is out of keeping with the rest of the Sixties building. Its story is that of modern Berlin. In a reversal typical of the city's history, the campus of one of the Continent's newest and most ambitious business schools was previously communist East Germany's state council building.

The school's founding on this site in 2002 was a conscious affirmation of the nature of a reunited Germany. "We are a modern, German, open, international school," says Professor Lars-Hendrik Röller, ESMT's president.

In keeping with Germany's philosophy of social solidarity, the emphasis is on leadership and responsibility. "This is the time to think about long-term, socially responsible leadership. We're very interested in societal impact. We believe that modern leaders need to be versed in how their decisions impact on society, not just on their companies and their lives," he says.

Earlier this year, the school became AMBA accredited – a fair achievement given that it is into only the fourth MBA cohort – and is clear about its ambitions. The flagship full-time MBA programme has 26 students this year, but the school has the infrastructure for double that number. It also expects to have a faculty of 30 by the end of 2009, and significantly to increase its academic staff over the next few years. "This year's job market for academics is very much a buyer's market. We're not slowing down. We're continuing on our path," says Röller.

That path began when a group of 25 of Germany's biggest companies banded together to start a new, English-language, international business school. It was a clear statement that they wanted a break from the limited, German executive education which characterised the country's business schools.

"One of the largest economies in the world didn't have an international business school," says Dr Daniel Dirks from Allianz, the giant German insurance company which was among the founders. They also felt there was a need for a style which was less American and more culturally complex.

Generous financing has eased the path. ESMT has an endowment of €83m, and its founders donated a further €16m this year. Painfully restoring the GDR building, with its enormous light fittings and huge socialist realist stained glass depicting heroic workers, cost a cool €35m.

From the start, the founders were clear that the school should combine the practical and the academic. ESMT is unabashedly commercial. It lays on executive education for 2,000 to 3,000 managers a year, mostly from sponsor companies – which accounts for about half its income. ESMT also launched an open-enrolment EMBA programme in 2003, before the MBA started. A few weeks ago, the school became the only German institution and the highest-placed new entrant in the Financial Times' ranking of executive education custom programmes.

The school also provides consultancy services to companies, a growing number of whom are from other European countries. "I don't think academics should be purely ivory tower. You need the praxis side as well," says Röller. Between 2003 and 2006, he was the European Commission's first chief competition economist.

Corporate founders sponsor some students and may offer them jobs when they graduate. The close connection with corporate life is reflected in the support students receive. Each student has a corporate mentor to advise on an industry or company. In addition, on the academic side, a student has a professor who monitors his or her development, while on the personal side each student has a strategist to help with embarking on a new career. All this is on top of the normal career counselling services.

In part, the emphasis on each student's future reflects the make-up of the student body and the cost of the intensive MBA course. This year's cohort – entrance is in January – is very varied. There are only three Germans, but four from elsewhere in western Europe, five from Russia, five from Latin America, five from Asia Pacific, and two from Africa. Of the total, eight are women.

The mix is quite close to the balance that Professor Wulff Plinke, ESMT's dean, would like to achieve. But, he readily admits, the proportion of women is too low and he would like to see more students from Turkey and the Middle East.

Moreover, the class is slightly smaller than those of previous years. Funding is one reason. A corporate-sponsored MBA costs €50,000 for the year; fees for an individual are €38,000. This includes a basic scholarship of €12,000, and further scholarships are available.

"Financing the programme is the tightest bottleneck for students," says Plinke. At the same time, ESMT is determined to maintain the high standard of its MBA class, knowing that quality is key to survival in an ever more competitive market. If the splendid building had ears, it would not believe what it is hearing.

'You get a lot of support from the school'

Ekaterina Lobanova, 29, from Russia.

"I worked in the insurance industry in Moscow. It's an international business and I wanted to improve my qualifications and get experience in other countries.

I met ESMT in Moscow and their approach to an MBA seemed to be what I was looking for. It's European, in English, I want to improve my German, and they have strong links with the insurance business. Allianz is sponsoring me and I would like to work for them.

You get a lot of support from the school, and other members of the group are very collaborative as well – although it's also very competitive.

The course is extremely intensive, but the work carries you along. It's a privilege to work in such surroundings."

'For me, an MBA was about leadership'

Stephan Swinkels, 39, from the Netherlands.

"I worked for a major international law firm, but wanted a change. I looked at several business schools. My wife is in the Dutch foreign service and when she was posted to Berlin, I applied to ESMT. I'm financing myself. For me, an MBA was about leadership and strategy. The course is very demanding and I have to look after our kids as well.

I've found the statistics and finance hard. In my firm, we didn't even use Excel. You learn a lot about your strengths and weaknesses, because there's no escape.

I'm not sure what I'll do afterwards. In five years, I may be in a media or luxury goods company, or even journalism."