Globalisation is not only affecting business, but business schools as well. Alliances are the key as brand names go transatlantic

In his landmark speech on higher education at Greenwich, Education Secretary David Blunkett said no single university had the resources to develop world-class capacity across all disciplines. His proposal was that universities should consolidate bilateral links and form new global alliances with overseas institutions.

Mr Blunkett's idea interests Professor Leo Murray, Director of Cranfield University School of Management, because it is promoting internationalism, which he considers important. No business school is comprehensive enough to do all things for all the major corporations all over the world, Professor Murray says.

Therefore schools are entering liaisons of one kind or another. They are also entering into alliances with consultancies and other people who can add to their ability to serve their clients.

Business schools are long experienced in forming global alliances. As strategic alliances have grown in industry, so they have become more serious in business schools, according to Professor Murray. They are much more about joint research projects and joint delivery to client organisations.

"Places like ourselves, London and INSEAD increasingly work in that way. If you are serving the international community you will need international resources. No business school in the world is big enough, comprehensive enough or diverse enough to meet all requirements."

Cranfield recently completed a very large contract to work with Columbia University in New York to design and deliver a series of programmes round the world for the senior managers of a very large international organisation.

What are new, says Professor Murray, are alliances with management consultancies. Cranfield already works with a huge international consultancy. "One of our colleagues is on their US board, we do joint international research, we train a lot of their European consultants in a particular discipline, and they recruit largely our MBAs - yet at the same time we compete."

Moreover Cranfield foresees the creation of knowledge by research consortia, or collaborations with other consultancies or business schools.

Looking ahead, says Professor Murray, "there is absolutely no reason in principle why parts of Cranfield School of Management should not merge with parts of another university, or even a network of these, and be a multi-centre multinational business."

But alliances are fraught with risks. These are explained by Professor Murray's colleague Mitchell Koza, who holds the chair in International Strategic Management at Cranfield. Koza was previously at INSEAD and UCLA in California, and has a particular interest in alliances.

"None of us can go it alone," says Professor Koza. "That means that we either develop internally, and unfortunately the world will not wait for our perfect solutions, or alternatively we do it by merger and acquisition. The reality is that building campus schools, whether through internal development or merger and acquisition, has been nothing but trouble historically. Or you grow through alliances. Alliances are, typically, a horrible way to move forward - but they are better than the alternative. They are also remarkably tough to manage."

The problem is that many alliances run the risk of degenerating into a "learning race", according to Koza. Big American business schools often approach Cranfield saying they would like to form an alliance.

"What they bring is the brand," according to Professor Koza. "What we bring is a whole new market for them. But they can learn the market much more quickly than we can ever capture the brand."

Moreover, he says, "Alliances often fall apart not because they are failures but because they are successes. Success can be quite a trap."

For example, a US school can come with a strong brand, and a UK school can have a strong market presence in Europe. They work together, and the UK school becomes a much stronger research-oriented school as a result with great visibility for its scholarship. The American business school becomes well known in the UK and on the Continent. What you end up with is two competitors where there were previously none.

"When you set up alliances you must think about the initial conditions and the potential learning outcomes," continues Professor Koza.

Such thinking lies behind the alliance between the London and Columbia Business Schools which was announced last month. They will run a joint Global Executive MBA (EMBA-Global).

Saswan Masri, Vice-Dean at Columbia, explains the thinking behind this alliance: "We have a tremendous base of alumni in London, and we see London and New York as being the money and commercial centres of the world. The greatest benefits of doing something jointly comes with capitalising on the strengths and connections we have in both cities, and leveraging that to do something that is dynamic and that nobody else is better poised to provide. We believe there is a very strong market here.

"Another benefit of something like this - when it is done right - is to expand the global reach of a school. Another is that you bring together two world-class institutions and consequently you can increase the collaboration between them. Faculty at both places will be further enlightened and more opportunities for collaboration will then exist between the faculty's students and its administrators as well."

Masri sees no danger of a "learning race". Historically and culturally, academic institutions are quite different to for-profit institutions and corporations, he says. They are not as competitive and they don't have the short time-horizon of the corporate world. But he sees risks in alliances in which one school tries to dominate, or they do not share the same educational philosophy and practices. "One should never go into something like this lightly. Being selective and being aggressively cautious are probably the fundamental factors for success."