Chicago Business School is coming to Britain. What next?

Location, location, location... the estate agent's creed is all important when you're thinking about any kind of MBA course. Are your studies more likely to succeed in a rural setting? Or would you do better in a conurbation?

Location, location, location... the estate agent's creed is all important when you're thinking about any kind of MBA course. Are your studies more likely to succeed in a rural setting? Or would you do better in a conurbation?

Surprisingly, this location dilemma applies equally to business schools themselves. American schools, though still the world leaders, are watching a downturn in applications and are strengthening their satellite operations. They want to be seen as more global.

The University of Chicago Graduate School of Business, (GSB) runs the world's oldest executive MBA (or Emba) designed for managers who want to stay in their jobs but take the odd week off to study. In 1994 the school opened a satellite campus in Barcelona. Now it has decided to close that operation and decamp to London, where its 20-month executive MBA course starts with 80 students on 1 August.

The move increases choice for applicants and enhances the capital's reputation as the place to learn business. The school is one of the world's top 10 institutions, ranked neck and neck with London Business School (LBS).

The cost will be £53,800, not including London accommodation or travel. That ranks just below London Business School's two-year global executive MBA (£64,000) and the London School of Economics Trium Emba (£58,000). It is well above LBS's normal Emba (£42,000), and those at Imperial College's Tanaka school (£31,000) and Cass Business School (£27,000 for a one-year course).

Lynn Hoffman, director of LBS's Sloan and executive MBA programmes, is not surprised by Chicago's move. "It's a no-brainer for them. London is the most important capital city in the world and having Chicago here will help to build the market," she says.

She is nonetheless careful to point to LBS's eight electives, against Chicago's two. "And of course LBS is a fully-fledged live campus, with fantastic opportunities for networking," she says. Whereas Chicago, at the moment, is an empty office block, albeit centrally placed in the square mile.

Professor David Begg, Tanaka's principal, welcomes the competition but says: "It all depends what kind of MBA you want to come out with. Tanaka is all about having a global outlook. Universities in the US can be very good, with excellent academic staff, but they don't do as well on diversity. Companies want people who, when studying, have had interaction with people all around the world."

Steve Haberman, deputy dean of Cass, agrees. "We have students from 95 countries here. Managing diversity of intake is a tricky business. But we have a 40-year history of being in the City and we feel we are pretty well established."

Perhaps to distinguish itself from LBS in the marketplace, Chicago is not insisting on GMAT scores for its applicants. "We believe that managers with substantial and successful work experience behind them have a much better indicator of their success in the classroom," says Glenn Sykes, Chicago's Europe managing director. Neither does Chicago insist that managers should be in work when graduating. "The programme is designed for working executives and we weigh work experience heavily in the admissions decision, but we have not yet made it a requirement that someone needs to be employed at the time they matriculate."

Students will have the chance to study in Chicago itself and in GSB's other satellite campus in Singapore. Other London schools, of course, also offer the chance of foreign study: LBS has a link with Columbia University in New York, for example, and LSE's Trium course runs in five global locations. Chicago's Barcelona students will finish their courses in Spain next year and Sykes has been in London since January organising the new campus and recruiting the first class. The school will occupy the first floor of the Woolgate Exchange in Basinghall Street in the City. "Construction has started: there'll be auditorium space, classrooms, conference rooms, break-out rooms, administrative offices. We'll occupy slightly more space than we have in Barcelona and use the new technology we've just installed in Chicago," says Sykes.

Why the move? "London is without a doubt Europe's business capital. It has more corporate headquarters than any other European city, it's prominent and easily accessible. It's hard to compare that with Barcelona."

The school is doubtless hoping to increase the numbers of bankers and financial services players signing on, since these often turn out to be the most generous alumni. (Most big American schools already hold regular alumni sessions in London). The programme starts in June in Chicago's new 450,000 sq ft headquarters, returning in August to London. There are 16 one-week class modules every four to five weeks.

"We've had record numbers of enquiries," Sykes says. "It's designed for people who are working and don't want to relocate. We have about half from Western Europe, a quarter from central and Eastern Europe and the rest from other parts of the world. Between 25 and 30 countries are represented."

At a time of falling MBA applications, will GSB steal students from other institutions? "We've been competing all along," Sykes says. "To the extent that we might now provide people with a better fit so I expect that we will take people from other schools."

There are, of course, other locations for a metropolitan MBA. "London is the financial capital and maybe the business capital of Europe," says John Arnold, dean of Manchester Business School. "But not every corporation wants to have its management development programme based there. It's really down to the quality of the faculty but it's also a place where you're spending two years of your life. We find that quite a lot of young people enjoy living in Manchester."

The newly merged Manchester/UMIST business school (MBS) now has a suite of specialist masters programmes. "That's where I think the major growth is going to be," Arnold says, pointing to the Bologna Accord, the 1999 agreement to unify European higher education.

Even Manchester, however, has some American competition on its doorstep. The first 10 students to join the new EMBA course of the University of Pittsburgh (Katz) began work in Manchester Science Park in March. They will join 17 students from Pittsburgh and 25 from Sao Paolo, Brazil, and there's also the chance to study in Prague.

Sajid Baloch, the course director, expects American interest in Europe to increase as the Bologna Accord comes into play. His course, he says, complements MBS, which offers a part-time but not an executive MBA. His 16-month programme is priced at £25,000.