INSEAD’s Abu Dhabi Problem

Lured by generous government subsidies of nearly $100 million over ten years, INSEAD agreed in 2006 to open an Abu Dhabi campus and create MBA and executive education programs. Now, just six years after that pact, there’s a good deal of disappointment and confusion over the deal, according to The Wall Street Journal today (May 2).

INSEAD’S Executive MBA program in Abu Dhabi has drawn only 30 students while its executive education offerings have attracted about 1,000 participants this academic year–one-third the size of INSEAD’s Singapore program and one-fifth the size of exec ed students at its main campus in Fontainebleau, France.

Yet, the school boasts a massive 14-story building in Abu Dhabi that includes a restaurant, library and prayer rooms—but only four resident professors.

“Some professors are feeling discouraged about a program they see as adrift, and school administrators and government officials are reassessing the program’s future,” the Journal reported.

To establish its presence in Abu Dhabi, INSEAD received from the government “an upfront endowment contribution” of between $65.8 million and $72.4 million as well as annual payments of between $2.0 million and $2.9 million for ten years. All told, the maximum payments to INSEAD under the agreement would exceed $100 million.

For its part, INSEAD has invested a mere fraction of the government’s commitment–“a few million euros” in the campus. The Journal says that the Abu Dhabi government recently asked the school to restate its plans for the campus in the midst of what appears to be some disagreement over the terms of the agreement. Specifically, the Journal reported, “one point of contention” is whether the school agreed to start a full-time MBA program in the city. “The Abu Dhabi side appears confident that a program is in the works,” according to the Journal.

INSEAD Dean Dipak Jain told the newspaper, “I am trying to understand very clearly what were the deliverables, [and] what was promised. There is no plan for an Abu Dhabi MBA degree in the immediate future.

Retorted Jihad Mohaidat, who manages global partnerships for the Abu Dhabi Education Council: Those who express confusion over the arrangement “are confused themselves,” and maintains that an M.B.A. is “part of the vision going forward.”

  • leadpathfinder

    The problem with INSEAD Abu Dhabi is enumerated in the below points.

    1. The schedule is terrible. Very few employers will allow employees to follow a schedule that seeks so many days off in a single year. They could have spread it around over more evenly.

    2. INSEAD Campus is based in Abu Dhabi whereas most of the candidates who want to do an MBA are based in Dubai. LBS gets 100 plus candidates. If INSEAD had a campus in Dubai, they would bear LBS hands down. So wrong location choice.

    3. INSEAD should have made a campus in the money that they spent on the building. They made a wrong choice of location and then a wrong choice of location within the location.

    If another school enters Abu Dhabi except INSEAD and positions its campus between Dubai and Abu Dhabi, have a more flexible schedule, they will capture the share of students from LBS and INSEAD.

  • leadpathfinder

    BTW Duke School of Business has dropped its plan to open the China and the Dubai Campus. Its makes you wonder whether these schools follow the globalization strategy and the market sizing techniques that they teach to the students. How can schools go terribly wrong in their decisions when they have thought leaders.