1. Management training
Keeping it on the company campus
As more firms have set up their own “corporate universities”, they have become less willing to
pay for their managers to go to business school
May 16th 2015 | From the print edition
“DON’T ask the barber if you need a haircut—and don’t ask an academic if what he does is relevant.” So
wrote Nassim Nicholas Taleb in his 2007 book, “The Black Swan”. The trouble for academics, particularly
those who teach business, is that companies seem to be posing that awkward question more and more;
and then coming up with an even more discomfiting answer.
Firms looking to put their managers through development programmes are increasingly creating their
own, rather than relying on business schools, consulting firms and the like. Companies are not only
spending more of their training budgets in-house but are setting up their own “corporate universities”.
The idea is not new. General Electric is considered to have opened the first corporate university, in 1956.
Perhaps the most famous is McDonald’s “Hamburger University”. Since 1961 around 275,000 people have
passed through one of its seven campuses worldwide. However, such in-house academies have become a
lot more common in recent years. A survey by the Boston Consulting Group (BCG) found that the number
of formal corporate universities in America doubled between 1997 and 2007, to around 2,000. Since then,
it reckons, they have continued to spread, and now more than 4,000 companies around the world have
them.
The numbers are vague because the definition of what qualifies as a corporate university is slippery.
Unlike conventional universities, they tend to focus more on practice than theory, and they rarely hand
out degrees. But they are about more than just slapping a grand title on companies’ hotch-potch of ad
hoc training courses. Corporate universities have two distinguishing features: the first is a dedicated
facility, whether built of bricks or housed online; the second is a curriculum tailored to the company’s
overarching strategy.
This latter trait gives the best clue as to why they have become so popular. “The world is changing
quickly,” says Rainer Strack of BCG. “Each firm has specific challenges, be it financial crises, the rise of
digital or artificial intelligence, or increasing globalisation.” Having training and development under the
auspices of a central, in-house facility makes it easier to focus on its distinct needs. Business schools, he
says, can be too standardised.
Corporate universities can be particularly useful when a firm is attempting to overhaul its culture.
Unilever, a consumer-goods firm, opened its first campus in London more than half a century ago. In
2013 it spent €50m ($65m) opening another in Singapore. When it wanted to change the company’s
ethos to focus more on “sustainable” business, its university played a central role. Jonathan Donner, an
executive who oversees it, says that programmes espousing the management style the firm was after—
“purpose-driven leaders who can deal with a volatile and ambiguous world”, no less —were not available
on the open market. So it cherry-picked a bunch of professors, from business schools such as Cambridge
and INSEAD, to tailor and teach programmes to be delivered on Unilever’s campus. Apple has gone
further, poaching Yale business school’s dean, Joel Podolny, to run its corporate university.
Unilever’s university focuses mainly on its top tranche of management. Other companies take a broader
approach. One such is ArcelorMittal, a steelmaker, which has six corporate university campuses, including
sites in Ukraine and South Africa. It will soon open three more, two of them in Kazakhstan and Brazil. In
2012 more than 27,000 employees spent around 200,000 hours in its classes. Such a geographic spread
is important. Since only around 15% of the firm’s employees have English as a first language, says
Christian Standaert, the head of ArcelorMittal University, the firm needs to provide lots of training in local
tongues. This helps it develop managers locally, rather than having to send in expatriates to run its
operations.
Lecture theatre, or echo chamber?
Although there are many good reasons for firms to invest in corporate universities, they have their
limitations. One is the danger of building an echo chamber. Managers who go to a university business
school are exposed to ideas from peers in other companies, notes Sim Sitkin of Duke University. And
students can safely ask awkward questions without the risk of this affecting their careers.

2. Even more troubling is that, for all the millions spent on them, it seems all but impossible to measure the
effect a corporate university has on the bottom line. Too often, companies do little more than ask those
completing a course to fill out a survey on how useful they felt it was. A few try to track employees’
effectiveness for perhaps two years after attending a programme. Corporate universities usually come
under the auspices of firms’ human-resources departments, which are usually not geared up to do a more
rigorous analysis of what they achieve.
Privately, some firms confide another benefit of shifting management development in-house. Companies
have been known to use the offer of education at a prestigious business school, whether an “Executive
MBA” (EMBA) degree or a shorter leadership course, as a way to keep their rising stars happy. Even if the
business need was not always apparent, splashing out on an EMBA from an Ivy League school made such
managers feel treasured and, it was hoped, loyal. Unfortunately, it often had the opposite effect,
providing a firm’s brightest and best with a highly marketable qualification that made them more prone to
being poached by rivals. Certificates from corporate universities, being more focused on the sponsoring
firm’s needs, are less attractive to competitors.
Many firms have now stopped paying to send managers to external business schools altogether. After the
financial crisis a lot of companies concluded that they were an extravagance. As better times returned,
few have reverted to their old ways. A long-running survey of EMBA students by The Economist suggests
that the number who have their tuition fees paid for by their employers has fallen precipitously. In 2005,
69% of students were sponsored; this year 39% were.
Yet the overall demand for EMBAs does not seem to have fallen, according to Michael Desiderio of the
Executive MBA Council. That is because despite steep tuition fees, many managers think it is worth paying
for themselves. They may be right. Students on the EMBA programme offered by IE in Spain, which has
come top in our latest ranking of such programmes (see table), enter the course earning an average of
around $144,000. A year after they graduate, this has risen to $260,000, more than covering the $81,000
cost of the programme. Some 82% say they were promoted soon after graduation. Of course, they may
have been destined for higher things regardless of their sojourn in academia, but most who took our
survey believe that their EMBAs played a part in their rise. For those managers willing to pay, there now
seem to be two types of business education: the one they want, and the one their firm wants to give
them.
A. Match the following definitions with words/phrases from the text:
1. (Adjective): making (someone) confused or upset.
2. (Verb): to think or suppose (something) : to believe that (something) is true or possible.
3. (Adjective): difficult to stand on, move on, or hold because of being smooth, wet, icy, etc. By
extension: not easy to understand or identify in an exact way.
4. (Adjective): including or influencing every part of something.
5. (3-word phrase): with the help and support of a particular person or organization.
6. (Verb): to change (something) completely in order to improve it

3. 7. (Verb): to give your support to an idea, principle, or belief.
8. (2-word phrase): to choose only the best things or people out of a group.
9. (Verb): to persuade someone to leave a group or organization and become a member of yours,
especially by using secret or dishonest methods.
10. (Noun): a portion of something.
11. (Adverb): very nearly, almost.
12. (2-word phrase): BUSINESS the amount of money that a business makes or loses.
13. (Phrasal verb): to prepare yourself, or to prepare something for an activity or event.
14. (Verb): to tell someone a secret or discuss your private feelings with them.
15. (Phrasal verb): to buy or pay for something expensive.
16. (Adjective): likely to do something or be affected by something, especially something bad (often
followed by to).
17. (Adverb): completely and fully.
18. (Noun): a period of time when you stay in a place that is not your home.
B. Identify all the advantages and drawbacks of corporate universities mentioned in the article.
Advantages Disadvantages
C. In pairs discuss the advantages and drawbacks in question and compare them to traditional
universities'/business schools' EMBA programmes adding your own ideas in the process.

4. Correction:
Management training
Keeping it on the company campus
As more firms have set up their own “corporate universities”, they have become less willing to
pay for their managers to go to business school
May 16th 2015 | From the print edition
“DON’T ask the barber if you need a haircut—and don’t ask an academic if what he does is relevant.” So
wrote Nassim Nicholas Taleb in his 2007 book, “The Black Swan”. The trouble for academics, particularly
those who teach business, is that companies seem to be posing that awkward question more and more;
and then coming up with an even more discomfiting answer.
Firms looking to put their managers through development programmes are increasingly creating their
own, rather than relying on business schools, consulting firms and the like. Companies are not only
spending more of their training budgets in-house but are setting up their own “corporate universities”.
The idea is not new. General Electric is considered to have opened the first corporate university, in 1956.
Perhaps the most famous is McDonald’s “Hamburger University”. Since 1961 around 275,000 people have
passed through one of its seven campuses worldwide. However, such in-house academies have become a
lot more common in recent years. A survey by the Boston Consulting Group (BCG) found that the number
of formal corporate universities in America doubled between 1997 and 2007, to around 2,000. Since then,
it reckons, they have continued to spread, and now more than 4,000 companies around the world have
them.
The numbers are vague because the definition of what qualifies as a corporate university is slippery.
Unlike conventional universities, they tend to focus more on practice than theory, and they rarely hand
out degrees. But they are about more than just slapping a grand title on companies’ hotch-potch of ad
hoc training courses. Corporate universities have two distinguishing features: the first is a dedicated
facility, whether built of bricks or housed online; the second is a curriculum tailored to the company’s
overarching strategy.
This latter trait gives the best clue as to why they have become so popular. “The world is changing
quickly,” says Rainer Strack of BCG. “Each firm has specific challenges, be it financial crises, the rise of
digital or artificial intelligence, or increasing globalisation.” Having training and development under the
auspices of a central, in-house facility makes it easier to focus on its distinct needs. Business schools, he
says, can be too standardised.
Corporate universities can be particularly useful when a firm is attempting to overhaul its culture.
Unilever, a consumer-goods firm, opened its first campus in London more than half a century ago. In
2013 it spent €50m ($65m) opening another in Singapore. When it wanted to change the company’s
ethos to focus more on “sustainable” business, its university played a central role. Jonathan Donner, an
executive who oversees it, says that programmes espousing the management style the firm was after—
“purpose-driven leaders who can deal with a volatile and ambiguous world”, no less —were not available
on the open market. So it cherry-picked a bunch of professors, from business schools such as Cambridge
and INSEAD, to tailor and teach programmes to be delivered on Unilever’s campus. Apple has gone
further, poaching Yale business school’s dean, Joel Podolny, to run its corporate university.
Unilever’s university focuses mainly on its top tranche of management. Other companies take a broader
approach. One such is ArcelorMittal, a steelmaker, which has six corporate university campuses, including
sites in Ukraine and South Africa. It will soon open three more, two of them in Kazakhstan and Brazil. In
2012 more than 27,000 employees spent around 200,000 hours in its classes. Such a geographic spread
is important. Since only around 15% of the firm’s employees have English as a first language, says
Christian Standaert, the head of ArcelorMittal University, the firm needs to provide lots of training in local
tongues. This helps it develop managers locally, rather than having to send in expatriates to run its
operations.
Lecture theatre, or echo chamber?
Although there are many good reasons for firms to invest in corporate universities, they have their
limitations. One is the danger of building an echo chamber. Managers who go to a university business
school are exposed to ideas from peers in other companies, notes Sim Sitkin of Duke University. And
students can safely ask awkward questions without the risk of this affecting their careers.

5. Even more troubling is that, for all the millions spent on them, it seems all but impossible to measure the
effect a corporate university has on the bottom line. Too often, companies do little more than ask those
completing a course to fill out a survey on how useful they felt it was. A few try to track employees’
effectiveness for perhaps two years after attending a programme. Corporate universities usually come
under the auspices of firms’ human-resources departments, which are usually not geared up to do a more
rigorous analysis of what they achieve.
Privately, some firms confide another benefit of shifting management development in-house. Companies
have been known to use the offer of education at a prestigious business school, whether an “Executive
MBA” (EMBA) degree or a shorter leadership course, as a way to keep their rising stars happy. Even if the
business need was not always apparent, splashing out on an EMBA from an Ivy League school made such
managers feel treasured and, it was hoped, loyal. Unfortunately, it often had the opposite effect,
providing a firm’s brightest and best with a highly marketable qualification that made them more prone to
being poached by rivals. Certificates from corporate universities, being more focused on the sponsoring
firm’s needs, are less attractive to competitors.
Many firms have now stopped paying to send managers to external business schools altogether. After the
financial crisis a lot of companies concluded that they were an extravagance. As better times returned,
few have reverted to their old ways. A long-running survey of EMBA students by The Economist suggests
that the number who have their tuition fees paid for by their employers has fallen precipitously. In 2005,
69% of students were sponsored; this year 39% were.
Yet the overall demand for EMBAs does not seem to have fallen, according to Michael Desiderio of the
Executive MBA Council. That is because despite steep tuition fees, many managers think it is worth paying
for themselves. They may be right. Students on the EMBA programme offered by IE in Spain, which has
come top in our latest ranking of such programmes (see table), enter the course earning an average of
around $144,000. A year after they graduate, this has risen to $260,000, more than covering the $81,000
cost of the programme. Some 82% say they were promoted soon after graduation. Of course, they may
have been destined for higher things regardless of their sojourn in academia, but most who took our
survey believe that their EMBAs played a part in their rise. For those managers willing to pay, there now
seem to be two types of business education: the one they want, and the one their firm wants to give
them.