Business schools and the Spanish business elite since the mid-twentieth century

ABSTRACT

Literature has emphasized the key role of business schools in spreading US management in Europe after the Second World War but has not found how to quantify its impact on the business systems. With such purpose, this article examines the relations between the pioneer Spanish business schools and the national corporate elite. By combining an institutional approach and social networks analysis, it shows the incidence of business schools on the board of directors of the largest Spanish firms during the second half of the 20th century, and explains their role as centers for business elite reproduction.

KEYWORDS:

• Business schools
• business elite
• managerial capitalism
• corporate network
• interlocking directorates

Disclosure statement

No potential conflict of interest was reported by the authors.

Notes

1 At the end of the 20th century, 20% of the executives of the 200 largest companies in the world had an MBA (Byrkjeflot, 2000, p. 21).

2 In 2016, IESE ranked first and ESADE eighth (Financial Times, Executive Education 2016). It is also common the presence of another Spanish business school, the Instituto de Empresa (IE), founded in 1973, so it can not be considered as a pioneer in Spain.

3 Americanization can be defined as "transfer of creative technology, organizational structures, institutions and (…) values and codes of behavior from the United States to other parts of the world" (Fernández Pérez & Puig, 2009).

4 The specific historiography about business schools in Spain is scarce and eminently qualitative. The most relevant works, by Puig and Fernández, examine the foundational characteristics of schools (Puig, 2003, Puig & Fernández, 2003, Kipping et al., 2004). Quantitative research linking business schools and business elites is scarce internationally.

5 The different origins and models of business schools in Amdam (1996, 2007) and Engwall and Zamagni, (1998).

6 Technical assistance programs were promoted from different institutions, such as the European Productivity Agency (EPA), or the Ford Foundation, establishing exchanges between leaders from both sides of the Atlantic with the aim of promoting and introducing American industrial model, free market practices and production and consumption on a large scale (e.g., Amdam, 2007; Gemelli, 1998; Gourvish & Tiratsoo, 1998). National and regional productivity centers were created, and companies began to progressively introduce, depending on their material circumstances, the American management notions (Amdam, 2007).

7 The UN vetoed the accession of Spain in 1945, and it was followed by numerous international diplomatic sanctions.

8 This group has also been characterized by sharing, many of them, their membership in Opus Dei, the Catholic prelature positioned itself as a group of influence and power within the Franco regime and Spanish society in general. Opus Dei was also the institution that promoted the creation of IESE.

9 The National Commission of Industrial Productivity (CNPI), institution under the Ministry of Industry that channeled the exchange programs, noted in their reports the difficulties to introduce in Spain the ways of doing American business due to the smaller size of the industry, the lack of means, and legislative restrictions (Torres, 2016, p. 84).

10 Similarly to what happened in Europe and the United States, despite the increase of professional managers within the companies, ownership and control remained closely linked due to the perpetuation of founders and heirs, and the increasing participation of managers in the ownership of companies (Valdaliso & López, 2007, p. 396).

11 Engineers historically prevailed over those educated in business schools in the European top managerial positions (Byrkjeflot, 2000). The engineer corps, with an eminently technical training, enjoyed a high status within the Spanish socioeconomic system (De Miguel & Linz, 1964).

12 Special mention deserves the Asociación para el Progreso de la Dirección (APD). Founded in 1956, financed by US funds, it tried to make the US management model compatible with the culture of the Spanish business elite (Nogueira, 2015, Álvaro, 2011b). The APD gathered large enterprises, banks and some Ministries, which could represent around 70% of the Spanish business capitalization (Frederick & Haberstroh, 1969, p. 67).

13 The authors evaluated the convenience of including ICADE in this work, however, the inability to access to homologous sources prevented it. The EOI was not included because it was not a school promoted by the private initiative.

14 The development of Spanish industry was largely associated with the dictates of the Instituto Nacional de Industria (INI), the state holding created in 1941 to autonomously develop the country’s strategic sectors.

15 Directorio de Antiguos Alumnos IESE. Universidad de Navarra, 1999.

16 The Universidad Comercial de Deusto, founded in Bilbao in 1916, was a pioneer in business management and economics programs at the university level in Spain. Here not included because it is not an institution arising from the Americanization process.

17 Navarro Rubio, Minister of Finance between 1957 and 1965, pointed out that the economic reactivation was especially directed to the approximately 200 Spanish companies that constituted the "economic body of the country" as well as to the banks that supported them (Navarro Rubio, 1991, p.151).

18 Hereinafter, the term "business schools" will refer to the two institutions studied (IESE and ESADE), since both have been identified by literature as institutions of management education inspired by the US model. The differences between them will be noted throughout the text.

19 Due to sampling differences and non-homogeneous analysis, an international comparison is not always possible. For an approximation to what happened in other countries, see for example the summary in Byrkjeflot, (2000).

20 On the occasion of the publication of Rakesh Khurana’s book From Higher Aims to Hired Hands: The Social Transformation of American Business Schools and the Unfulfilled Promise of Management as a Profession (Princeton, 2007), several experts reflected on the content, role and evolution of the management discipline in different countries. For the Spanish case, it was noted the relative exceptionality of business schools due to its position with respect to the official education system. (Wilson, J., Locke, R., Amdam, R., Puig, N., & Nishizawa, T., 2008).

21 For this reason, to analyze the influence of business schools on the Spanish business elite, we will refer to IESE to a greater extent than to ESADE.

22 Actividades del IESE (June 25, 1969). ABC, p.51.

23 The rapid and effective adaptation of IESE was also due to the close relationship between its professors and the companies through consulting works. One of the main objectives of the institution was to have a group of teachers composed by active agents in that business environment (Torres, 2016).

24 The annual minimum wage in Spain in 1963 was 21,600 pesetas (INE, Statistical Yearbook of Spain). Even today, when the average Spanish salary is around €23,000, IESE fees can range from €28,400 of its Programa de Dirección General (PDG), to €115,000 of the Global Executive MBA program. For its part, the ESADE fees for its Executive MBA in 2018-2019 amounts to €62,500.

25 In Spain, 78% of the business elite had higher education, while the adult male population with such education was barely 2% (De Miguel & Linz, 1964). Among the students of the first ten IESE promotions there were: 113 engineers, 75 law graduates, 40 chemists, 16 economists, 11 graduates in Exact Sciences, 9 pharmacists, 7 architects and 7 military (Torres, 2016).

26 However, there is an open debate on this claim, since some authors pointed to socialization and symbolic indicators as the main factors provided by the schools (e.g., Amdam, Kvålshaugen, & Larsen, 2003; Grey, 2002).

27 The raison d’être of interlocking directorates have been explained under different interpretations: from a cohesion mechanism by the elites, to a way to coordinate business strategies or reduce transaction costs by firms. For a review on temporal perspective, see for example David and Westerhuis, (2014).

28 The centrality degree is an indicator of the number of links a director has with the others. The intermediation degree is an indicator of the potential capacity of a director to control information.

29 One of the institutional reasons that explain the historical existence of interlocking directorates is the pre-eminence of banking over capital markets as financial support for industry in the countries (e.g., Windolf & Beyer, 1996).

30 From social networks analysis, the main component refers to the largest set of actors linked together without interruption in a network, which includes the actors with the most central and influential positions among them.

31 An indicator of low mobility typical of the pre-eminence of family firms was that in the first ten IESE promotions, 71.3% of students worked in the same firm where they had started their career (Torres, 2016).

32 The preeminence of Rivière and Roca in the corporate network was associated with the American connections of both family groups (Puig & Álvaro, 2004). The case of the Rivière family has been used to interpret the limits between family tradition and managerial modernization in the Spanish economy (Fernández-Pérez, 1999; Puig & Fernández, 2003).