Marking the 13th anniversary of her work, Larysa Ivshyna, editor in chief of Den/The Day, invited the readers to start a dialog with her and welcomed any questions. The audience was prompt to respond. A question from Ruslan Hrabar, Kyiv, immediately caught our attention: “In 1991, the year of Ukraine’s independence, a certain number of young people enrolled at schools of higher education. They graduated in 1996. Thirteen years have passed. Where are these young holders of bachelor’s and master’s degrees now?
“There must be hundreds of thousands of them. Where are the thousands of the MIM graduates? What kind of influence do they have on things in Ukraine?”
It is no mere coincidence that Hrabar should have mentioned the MIM-Kyiv in his most timely question. The Day has written a good deal about the MIM and their special approach to researching the Ukrainian business styles.
The International Institute of Management (MIM-Kyiv) is Ukraine’s first business school whose foundation in 1989 was suggested by Dr. Bohdan Havrylyshyn, a scholar with world renown, and implemented under the patronage of the Institute of Economics at the Ukrainian Academy of Sciences. Since then, the MIM has trained hundreds of professionals on the basis of MBA (Master of Business Administration) program. The MIM has changed together with the calls of the time, but its philosophy has remained intact: the partnership of business education, science, and business, with the view to increasing the competitiveness of Ukrainian business and Ukraine.
At the celebration of the MIM’s 20th anniversary, in late 2009, its alumni declared that radical changes in the Ukrainian economy and society required a certain critical mass of people, who would be ready to implement these changes.
Obviously, our readers are not content with this amorphous notion of “critical mass.” How long are we to wait for the “critical mass”? Who can guarantee that this layer will definitely be formed and will not be washed away by the new trends in the political and economic thought even before it has taken final shape? Can one be sure that the changes, foreseen by this cherished “critical mass,” will turn for the better? To get answers to all these questions, The Day went to the MIM.
Our interlocutors are: Iryna TYKHOMYROVA, president of the MIM-Kyiv, Associate Professor of Management and Economics, manager of consultative projects for international and domestic companies, and member of methodological commission on management at the Ministry of Education and Science of Ukraine; Lina KHASAN-BEK, Professor of Business Administration, Ph.D. in Economics, manager of consultative projects for international and domestic companies, as well as an author, academic editor, translator, and translation editor for literature on financial investment, capital markets, crediting, and business financial assessment; Maks HOLTSBERG, Chair of Business Administration, manager of the MIM’s consultative projects for Western companies, author of 12 monographs and textbooks on corporate management, capital markets, investment management, securities trading, financial risks, etc.
Our reader’s sensible question, which we first addressed to Tykhomyrova, eventually initiated a roundtable talk with the MIM lecturers. The ideas which were voiced in it are normally not broadcast on the radio or TV. However, they should be. On hearing them, one develops a different vision of the roots of our problems in economy and other areas.
So, can you answer our reader’s question: Where are the hundreds of the MIM alumni? Is it possible to provide even an approximate estimate of the influence exercised by the MIM community on the economic and political situation in Ukraine?
I. T.: “It would be too easy and simple if business were like mechanics: an action causes a reaction, an impact makes the object move. In an economy, like in life, everything is much more complicated. There are too many factors at work, affecting the situation at a given time.
“No doubt, the role of personality in business is enormous. What is Obolon without Slobodian? What would TasComertsbank be without Tihipko? Or The Day without Ivshyna? From this perspective we certainly can name our alumni who are leaders of influential and successful Ukrainian businesses.
“Of course, there are cases when a promising graduate can’t find himself in business and build an impressive career. However, the proportion of successful ones is much higher. The first graduation of the MIM-Kyiv was in 1991. There were very few graduates, some 20 of them. But look who they were! For example, Roman Shpek [a well-known Ukrainian statesman and diplomat – Ed.] who has worked in a number of important state posts. Then, the former rector of the International Christian University, (sadly, now deceased) Anatolii Voichak. Also, Vasyl Yefimenko, Dean of Department of Accounting and Economics at the Kyiv National Economic University.”
L. Kh.-B.: “I dare say that business students are normally first of all those individuals who are interested in doing business, rather than politics. They do not make this choice at the age of 17 or 18, but later, when they are well aware of their ambitions and goals and what they need this education for.”
M. H.: “Our readers, as well as correspondents, ought to realize that there are no backward nations — rather, there are mismanaged nations. A statesman is a specific profession which has to be taught just like business management. That is why all over the world there are schools training specialists in public administration, while the MIM is a typical school training professionals in business administration. For us, the number of MPs among our alumni is not in the least an efficiency index. We do not train them for public administration. We are interested in their progress in business.”
The progress of people in business is the progress of the nation as a whole. Besides, it is this group of individuals that shapes the demand and has direct influence on the state politics and politicians. Does efficient state politics feel the demand of the MIM alumni today?
L. Kh.-B.: “Anyone who knows the MIM’s 20-year-old history will agree with me: the MIM has really influenced the formation of the banking sector in Ukraine — perhaps even more than any other institutes and institutions. Our alumni are now working in key jobs at virtually each bank operating in Ukraine.”
I. T.: “Yes, and it is not only the banking sector. Any leader, from ministers of fuel and energy to heads of oblast energy departments, is a MIM alumnus.
“Besides, pharmaceutical industry has a very powerful and active market. In reality, each head of any branch of any pharmaceutical company in Ukraine is also our alumnus.
“Then, there certainly is the IT market. The largest IT companies, both on the software and system integrator market, are run by the MIM graduates. Typically, the people who first came to study with us were a part of human resources reserve. In five to ten years they are successful business owners, or at least top managers.”
M. H.: “When I ask myself about what the MIM has produced in all these years, the answer suggests itself: first and foremost, it is a system of manager training. Most leading professors in management are our first graduates. The majority of leading management departments were created by the MIM alumni.
“In 1990, people first heard of marketing or management. What the MIM did was to help saturate the labor force market with the necessary number of managers. Another question is that we cannot always bear responsibility for the quality of education of other schools’ graduates.”
Late in 2009 in Vienna there was a conference dedicated to the centenary of Peter Drucker [one of the most influential theorists of management in the 20th century – Ed.]. The discussion touched upon, in particular, one of the tendencies in world economy — the paradigm of the social responsibility of business which consists in the triangle individual – company – society. Clear enough, the Ukrainian market, for a number of reasons, is very different from the world market, but we are gradually making progress toward civilized rules. Do the MIM alumni have enough patience and moral strength to implement worldwide tendencies in enforcing the social responsibility of business?
M. H.: “Drucker’s works are first of all a manifestation of common sense. Socially responsible business management is PROFITABLE. You do not have to fight; talking and negotiations will do a better job. No one is rich enough to afford enemies. And if there are enemies, they have to be appeased.
“Classical capitalism is dead, and with it a shareholder’s individual interest in business. Certainly, the shareholder invests his money, and his opinion has to be respected. But you cannot make an employee care about someone else’s business from morning till night. Consequently, you have to make the employee interested in the success of this business. To involve him in the process, rather than control him, Drucker expressed these ideas in plain words without embellishing anything.”
L. Kh.-B.: “The MIM graduates are better prepared for this than anyone else. We are the only school in Ukraine to have introduced, since 2000, a course in corporate management, which addresses the problems of reconciling the interests of all the parties involved.
“I want to adduce an example from the banking sector. The banks that had treated their depositors irresponsibly lost their businesses. Not a single bank managed by our alumni experienced anything like this. They are bred on the principles of ethical business, and not only because the MIM taught them that.
“Ukrainian business is gradually coming to the realization that socially responsible attitude is profitable. A socially responsible business may yield lesser profit at a given moment, but it is stable and profitable from a longer-term perspective.”
M. H.: “People have to understand that social responsibility is different from charity. It is not a single act of sponsorship, but rather a methodical life choice: ‘I will pay taxes’; ‘I will take care of my employees’ welfare’; ‘I will be conscious of environmental problems’; ‘I will not use fraud schemes.’”
That’s clear, but the kind of social responsibility we are discussing here requires the formation of strategic thinking. This is one of the most complicated objectives in any kind of education. What methods used by your teachers allow them to arm MIM students with strategic thinking?
L. Kh.-B.: “Life itself forces them to think strategically (laughs). Our education is quite expensive. Besides, it calls for considerable time investments over these two years. Thus, anyone who comes to us has already made his or her choice: What am I here for?”
I. T.: “The main thing is that these people have to undergo a psychological makeover: they may be bosses in their jobs, with dozens or even hundreds of subordinates, while here they find themselves in students’ shoes. If they are ready for this, then they are ready to revamp their thinking. And upon graduation many of them indeed say that not only does the MIM help them spread their wings, but it also opens their eyes.”
L. Kh.-B.: “Most often people come to the MIM to find an answer to the question: What shall I do with my business? The MIM enables them to consider possible options. You cannot be taught anything here – you can only learn. The MIM opens new opportunities, suggests fresh ideas, forms new opinions, and other values for business, for the personality, for the society – that is our goal.
“One should understand that a strategy is not a lifelong matter. I often paraphrase someone else’s words to say that the only constant thing in our lives is change. We are trying to train our students to think that change is NATURAL. Change is more than just something due: it is something indispensable.
“An awareness of this, as well as the amount of knowledge and values which our graduates receive, enables them to formulate a perspective view of their business and of the market as a whole. Of course, each of them takes as much as he or she needs, neither more nor less. Our task is to enable them to take a broader view of the world.”
I. T.: “Just imagine this: an individual had been building up his business, spending sleepless nights to calculate each step. And now it works like a charm, and the owner is on the peak of his career. It is at this moment that they face a blind wall: What comes next? I want to develop further, but I do not see which way I should go. Thus they come to the MIM. It is the strategic thinking that they seek for.”
We have already mentioned that your applicants are adult individuals with one or more degrees. Most of them are more or less recent graduates.
I. T.: “Yes, virtually all of them went to university during the years of independent Ukraine.”
Experts tend to speak of the decay in the domestic system of education. Do the MIM staff feel this?
I. T.: “First, our applicants go through written placement tests, followed by an interview. We are naturally selective, despite the fact that many of the applicants are prepared to pay high tuition fees.
“Sometimes, asking what courses they took at their first university, we would get an answer like ‘I took the main course at the cafeteria.’ Clearly, such a person cannot become a MIM student.
“Of course, there will be problems in education. However, a lot depends on the school itself, its standards, and the organization of education. We have universities which have earned renown. Applicants with degrees from such schools become great students. On the other hand, there are schools whose graduates need not bother to submit their CVs, as prospective employers will not even consider them. They are very well known both on the labor force market and in recruitment agencies.”
M. H.: “All the schools mentioned here are great. Iryna, that’s what you should say, and we’ll have our jobs (bursts of laughter). They train an individual to perform some particular function, describing in perfect detail what accountancy or statistics is. However, we are talking of business management as an art.”
MIM graduates have very high standards to meet. Firstly, there is the history of the MIM. Secondly, the successes of the alumni in business and virtual projects: in the Global Management Game they traditionally have top ranks. Yet progress in studies is very different from that in real life. What are the criteria to assess a MIM graduate’s success?
I. T.: “Maks Holtsberg often says that a MIM certificate is not a party membership card. Once you get our certificate, it does not automatically involve immediate success, progress of your business, or invitations from the most powerful companies.
“The MIM certificate is a component of a successful career. We will do anything to help an individual succeed, but most of it depends on the individual himself, his active attitude, and readiness for change and trial.
“It is curious that during their studies, many students change either their company or jobs within the same company. Many of them start new joint projects with their fellow students.”
Do you associate this with the reappraisal of values during the studies?
I. T.: “Yes, to a considerable degree. We have mentioned that they develop a broader view of the world. Also, the MIM is the place to meet someone who holds the same views or individuals with original ideas, who you can team up with to realize your goals.”
L. Kh.-B.: “Everyone has his or her own idea of success. We had a class that graduated in 1993. They met for a reunion to mark their 15th graduation anniversary in 2008 and went on to share the stories of their success. One would say that he was in the money, another one shared that he laughed all the way to the bank, and so on, and so forth. There were presidents of companies, CEOs, and whatnot. Then another alumnus got up and said, ‘I don’t have any debts, and my business allows me to keep my family.’ This was his understanding of success, just bringing home the bacon.
“My idea of a successful business is this: it’s a business successful for the people interested in it.”
M. H.: “A successful business involves the ability to adapt to changes. It is a systematic organization of troubleshooting. Naturally, if there is no trouble, you are dead. The thing is to settle what can be settled, and not get upset about what cannot be mended.
“It also involves the ability to give up instant benefits in favor of greater benefits in the future. The realization of this will take root in Ukrainian business only when the present generation of super nouveaux riches is gone. They think that their children will take over a nice and ready business and will be successful in it.”
L. Kh.-B.: “They send their children to study abroad, while their business does not evolve. Then their children come back from London, Paris, or New York and have to run an ill-structured business which has taken shape over the recent 10–15 years. So, in five to seven years we are to face this problem.”
M. H.: “The following scheme was used in business analysis in the West: the first generation is daredevils, the second, merchants, the third, millionaires, the fourth, playboys, and the fifth, beggars.
“It is very important indeed who you can hand down your business to, and whether your children will have to be responsible for your recklessness.”
My personal feeling is that Ukrainian business elite is going through a transformation period. What we are leaving behind is clear: the era of “crimson jackets,” nouveaux riches. How will you describe the present-day business generation? What is the new business elite going to be like generally? This is question No. 1 on the agenda.
I. T.: “I think our students will not stay in the shade. I think the present-day business elite is sick and tired of all the filth. They are after honesty; moreover, they seek recognition and respect.”
L. Kh.-B.: “Business is, in fact, very diverse. Our applicants are very different. However, business strives for respectability. Another question is, Which ways does it choose, and what does it cost?
“Unfortunately, people often think that it is enough to send their children to school, and they will fetch this respectability from abroad. But their business is not ready to accept those educated and respectable children. This is because the older generation will not educate their staff; they will not introduce the idea of social responsibility into their business and management.
“Profitability continues to dominate all other factors. People who earn a lot tend to underestimate risks. The crisis problem is in effect the problem of the underestimated risk.”
M. H.: “The value of a business does not depend on the value of the assets or equipment alone. Reputation is also a factor. Aval’s material assets were not worth a billion dollars. It was the renown of its management, shareholders and their families, and the attitude of the personnel.
“That is why we teach our students to communicate with the media, build a reputation, select consultants wisely, because these also are decisive factors. Another thing is that it is not shown in your accounting report.”
L. Kh.-B.: “Expenditure for staff training will go under ‘expenditure’ and nothing else. In reality it is an investment into a more distant future. Ukrainian business owners cannot easily agree to such expenditure as they are generally more oriented towards immediate effect. Only those companies are viable, successful, and expensive which take these expenses as investments.
“The MIM teaches to conceive the non-material assets as the company’s main value. Humanitarian matters are becoming more and more important in business. Moreover, they are of critical importance.”
Your curricula are mostly borrowed from Western educational systems. However, do you allow for the Ukrainian realities in the course of studies? What I mean is not only the Ukrainian market, but also the special features of our society, which is a customer on that market.
I. T.: “There was a time when we had to invite experts from abroad to teach courses in marketing or personnel management, because we did not have domestic professionals at the time. We are working according to the MBA standards, which concerns the list of courses, credit hours, and reading lists. International training is also a compulsory element.
“On the other hand, we are living and working in Ukraine and for Ukraine. We have very few university professors. All of our lecturers must have business experience. All the people sitting around this table here are professionals actively involved in the market activities of today.
“I would also like to say that the MIM often goes ahead of time and ahead of its counterparts in the West, both in methodology and in its worldview.”
L. Kh.-B.: “Last year I took a group of students to a training session in Hong Kong. In one of the local papers, under the heading ‘Education’ I read that Asian students, who used to earn their degree in the US (in fact, Harvard, Wharton, and Carnegie* tended to enroll 70 percent of their MBA students from Asian countries), often could not apply their knowledge when they came back home.
“The problems they had been discussing, the goals they had set, the environment of their studies did not correspond to their actual working situation. So now the demand for Indian, Hong Kong, and Chinese business schools is constantly growing. It is very significant. We in the MIM realized this a long time ago. So when asked, ‘What is the best place to get a degree?’, we would answer, ‘It depends on where you want to work.’
“If you want to work abroad, you need not go to the MIM. And even the Russian market is so different from Ukrainian, that if you got your degree in Russia, you will have difficulties working in Ukraine.”
* Harvard Business School, the Wharton School of the University of Pennsylvania, Tepper School of Business at Carnegie Mellon University
