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RELIGIOUS, SOCIAL, & ECONOMIC FORCES: MANAGEMENT EDUCATION IN LATIN AMERICA

Dr. John Theodore, Ph.D., D.B.A., CMC | 09.07.2006 | Any/All Industries | Networking. Cultural Differences. Strategy on Launches. THE IMPACT OF RELIGIOUS, SOCIAL, AND ECONOMIC FORCES UPON THE DEVELOPMENT OF MANAGEMENT EDUCATION IN LATIN AMERICA INTRODUCTION Management's importance in the economy of a nation is paramount because it is responsible for the success or failure of businesses, the foundation stones of the free enterprise system. In turn, the most essential prerequisite to effective management is management education because it increases the knowledge, skills, and productivity of managers. In Latin America, management education recently has been playing an important role in fostering the region's economic and industrial development. However, this was not the case in the past. This article explains (1) the impact of religious, cultural, and economic factors that influenced management education and, (2) the development of management education in the region from the turn of the century to 1998. In Latin America, economic prosperity was considered a condition that militated against the ethical-spiritual aspects of a person. Management, one of the factors of production, and one of the preponderant precipitants of economic and industrial growth, was especially hostile to that religious ideology. For this reason, management education was often neglected. This was not only true in Spanish America, but also in Luso-America, where the church theology was traditionally more liberal. Such an inclination had its roots in the ancient Greek and Latin philosophy regarding commerce and industry. HISTORY AND EVOLUTION Classical Greece, from which the Latins borrowed extensively, was under the social, political, and economic influence of Plato and Aristotle. Both men advocated an agrarian society in which agriculture was considered the noblest profession of all, followed by the military. Commerce and industry were regarded as necessary evils, and the ~ occupation of the businessman-manager was considered of lesser importance. Aristotle followed Plato and, in many ways, overshadowed him. He concurred with Plato in ideas regarding trade and industry and considered them to be professions of lesser esteem. This philosophy was accepted by the ancient Latins, and left its negative impact on their view of industry and trade.1 This classic Greek transplantation, however, might have been gradually effaced by the Latins, had not the Roman Catholic Church assumed a dominant role in determining what was right for society in all phases. Among other con- cepts, the church and society accepted Aristotle's philosophy vis-a-vis trade and commerce,

and adopted most, if not all, of the Aristotelian ideology. Although the church was split in the II th entury, Aristotelian ideas remained intact in both the Roman and Greek churches and societies. Specifically, the ultimate goal of the church was the salvation of man; accordingly, every effort was made to direct the attention of the congregation to this end. Anything that might impede religious guidance toward salvation was considered evil. Specifically, the church and society were not hostile toward industry and commerce per se, but opposed to the practice which detracted from man's full dedication to religious salvation. The social status of management, a factor of production and an important precipitant of economic and industrial development, was kept low and was considered inferior to other professions, such as the fine arts, law or medicine. The church, which had control over the entire educational system in Latin America, was able to perpetuate this condition by neglecting management education. It should by carefully noted, however, that while the church ignored certain curricula, it also educated Latin Americans and fostered most of the sense of scholarship in the New World. It contributed to the establishment of excellent universities, such as those of Santo Tomas de Aguino (1538), Santiago de la Paz (1540), Mexico City (1551), and Lima (1551). By 1624 there were 26 universities in Latin America. As a result, the Church wielded great influence, not only in the spiritual sector, but also in political, societal, and the intellectual pursuits. Hence, the traditional hostile disposition of the church and society towards curricula in management education went unchanged until recently. THE EVOLUTIONARY PROCESS Due to lack of formal training, as late as 1960, only a very small number of enterprises had personnel with management education. Even managers had scoffed at management education and at research in management and business. Researchers in these areas were thought to be eccentric individuals alienated from the real world. Most managers had legal education or were attorneys. Law schools incorporated basic curricula in economics in order to provide rudimentary education for those who wanted to be managers. Several countries in Latin America began to establish business school programs in the 1960's. However, private investment in academic and practical management education was limited, and the government was also very reluctant to invest funds in the same curricula. Latin Americans who had studied management in the United States or Europe were either underemployed or unable to find a suitable position at home. Most of them returned to the nations where they had studied in search of productive employment.2 Although American and British firms entered the Latin American market at the turn of the century, especially in the Southern Cone area, their influence in changing management practices and introducing management education was limited. However, there were several forces in the 1960's, that changed the traditional attitude of the church and society toward management education: (I) the desire of national governments to develop their countries economically; (2) the economic challenge of Fidel Castro in Cuba as an instrument of the Soviet Union; and (3) the Alliance for Progress. The pre- World War II international economic disaster affected the economies of Latin America severely because they were the mere suppliers of raw materials to industrialized nations. To remedy the situation, national governments decided to participate actively in the economic affairs of their national states. Specifically, among other things, their goals were economic development and the elevation of the standard of living for the masses. Economic growth and development was to be achieved through local patterns rather than North American or European ones. In the 1960's, the emergence of Castro and the presence of the Soviet Union in that nation posed a similar challenge that is economic development and the attainment of a mass market. An important appeal of the Soviet Union in Latin America was the temporary success of the Soviet economic development at that time. The Latin American nations were profoundly concerned with discovering the magic of economic growth and the appeal of the Communist economic model was widespread. The new Cuban values implanted in Latin America were abundant, and Fidel Castro promised that the decade of plenty was beginning. The most direct influence, however, was the implementation of the Alliance for Progress in 1961, an instrument for social and economic development. The economic aim of the Alliance for Progress was to accelerate economic development. Goals included fair wages and satisfactory working conditions, ~ fiscal and monetary reforms, the stimulation of private enterprise in order to encourage economic development, and the economic integration of Latin America.

To attain the desired economic development, Latin American had to utilize adequately the factors of production. For this reason, the establishment and development of good management education became necessary. As a result, the church and society changed their attitudes toward management education in order to stimulate economic prosperity, and thus improve social conditions. This change was officially supported by the Vatican. In his Apostolic Letter com- memo rating the 8Oth anniversary of the Rerum Novarurn Encyclical, Pope Paul VI clearly stated that in order to avoid misery and parasitism in the human race in the future, the Church must support the government's policies towards economic investments, the organization of production, the increase of commerce and industry and, in general, towards every aspect of improving the economy.3 Some of the most impressive improvements in management education were the increase of academic curricula in management, the creation of institutions responsible for theoretical and practical instruction in managerial educa- tion, and the closer cooperation between Latin American and North American universities and institutions of higher learning in the 1970's. Many Latin American nations instituted curricula in management education in their established institutions of higher learning. Institutions offering practical instruction and training in management education were also established. Two good examples were A Universidade Do Trabalho, in Brazil, whose education to in-service managers became very important for the nation, and El Instituto Centroamericano de Administracion de Empresas, in Nicaragua, dedicated to undergraduate and graduate specializations in management in Central America. Additionally, a large number of U.S. institutions of higher learning with specialization in management education began to cooperate closely with : Latin American universities and business schools. This cooperation continued to increase, according to an agreement reached in a conference at Mexico City in 1974, and as a result more Latin Americans showed sincere interest in management education. Consequently, the percentage of students matriculating in such Curricula increased substantially. Furthermore, every Latin American nation appeared to have a very strong emphasis on the preparation for management positions. In addition, the social status of managers was improving rapidly and the remuneration of managers was increasing. Comparative studies in the early 1970's, however, presented the need for further improvements in management education. Such studies indicated that the majority of Latin American managers did not have adequate managerial education. This situation became a great concern in Latin America in the early 1970's, a period during which the region was exposed to constant pressure for accelerating changes, globalization, technological changes, and shifts in the labor force. Such changes became catalysts of change for management education. Those involved in management education took into account that shifts in the overall educational arena. The challenge for management education has been to help Latin American students learn to manage changes ethically, effectively, and efficiently, whether the changes involve international boundaries, human resources, financial considerations, political constraints, asset allocations, work ethics, process and productivity, total quality management, or a combination. In the late 1980's and early 1990's, the driving forces of globalization, constant change, and evolving international standards of competitiveness required Latin American organizations to reexamine both the structural and operational aspects of how to create and sustain a competitive advantage. A key issue has been to employ individuals who demonstrate the attitudes and skills necessary for success in this area. For this reason, university business programs began to prepare students to meet the needs of industry by providing programs offered by other universities within and outside the area. This was accomplished through adhering to generally accepted curriculum standards and outcomes expectations for graduates of such programs. The benefits of a better management education were: (1) improved ability to identify viable business opportunities; (2) less resources wasted on ill- conceived ventures; (3) enhanced competitive edge internationally; (4) improved job satisfaction and retention of personnel and; (5) improved effectiveness in the turbulent external environment. By the end of the 1980's enrollment in management education subjects in higher education institutions was the highest of all academic disciplines, beginning with undergraduate curricula and subsequently followed by graduate ones. From the end of the 1980's to 1998, an explosion of graduate managerial education has been taking place throughout the region. Existing institutions .have been adding and increasing curricula in management education and new institutions have been established for the same purpose. Among the many Universities that offer management education in the region are the University of Bucaramanga in Colombia, ESPOL in Ecuador, and the University of the Pacificin Peru. A large number of these institutions are members of the CLADEAL (Latin American Council of Post Graduate Business Schools), which was founded in 1967.

Due to the impressive growth of management education curricula in , the 1980's and 1990's, management is now considered to be a profession in the - region. In addition to the increased demand for professional managers, occupational profiles and job descriptions include knowledge and skills which are characteristics to this profession. Legal enactments formalize the practice of management in most Latin American countries. THE DICHOTOMY PHENOMENON In the 1990's the phenomenon of a distinct dichotomy of management education has appeared in Latin American higher education. One part of this phenomenon has to do with elite business institutions whose professors have been educated and trained abroad, who are active in research and publication, and who have contributed to the preparation of academic materials suited to local conditions. Extensive programs for postgraduate reform incorporate research.4 In these schools, the recruitment of talented students is apriority, links with foreign universities are common, and strong cooperation has been established between the government and private sectors. Foreign professors are being employed because it is understood that in order for curriculum internalization to take place faculty internationalization is essential.5 The other part of the phenomenon includes business schools whose professors are less qualified, research and publication is limited, and teaching assignments are heavy. Furthermore, teaching skills and resources are deficient, curriculum design is weak, and many instructors have full-time jobs elsewhere. As a result, the quality of education offered in most of these institutions is less than satisfactory. This particular dichotomy exists in developed nations, too. However, in Latin America the contrast is more evident, wider, and deeper. In management education, as in other spheres of life in Latin America, heterogeneity and pro- found contrasts are facts of life. Similar contrasts can be observed between the structure and functioning of management education institutions in each part of i the dichotomy and formal sectors of the economy, rural and urban society, and wealthy and poor social groups. This pattern of uneven development, and increasing gaps and differences, is also present within management education. . The elite schools enhance their positions by recruiting more and better students and staff, obtaining international support and recognition, strengthening their links with universities abroad, improving their libraries and other academic resources, and developing their research capabilities. In contrast, the schools that belong to the other category generally maintain relatively lower standards. CONCLUSIONS In Latin America, management education was limited prior to the 1960's because religious and social beliefs on the one hand and economic conditions on the other restricted its development. The first dramatic changes toward the implementation of management education appeared in the 1960's as the result of the influence of Fidel Castro's attempt for economic development in Cuba, the desire of most Latin American nations to develop their economies, and the Alliance for Progress. During the 1970's, management education continued to gain strength. A more profound development took place in the late 1980's and 1990's as the result of economic globalization, constant socioeconomic changes, international competition, and the rapid growth of technology. A very evident phenomenon that resulted from the development of management education in the region is the appearance of high quality and lesser quality institutions, curricula, and programs. NOTES I. John Theodore. A Comparison of the Evolution of Business Management in the United States and the Present and Future Development of Managerial Practices in Greece. (Athens, Greece: Loannides Publishing House, 1971 ). 2. Maria Schwalb, Roberto Grosse and Eulogio Romero Simpson. "Developing Entrepreneurs in Developing Counties: The PEG Program in Peru." Journal of Management Development, 1998, pp. 4, 31-40. 3. John Theodore. A Comparison of the Evolution of Business Management in the United States and the Present and Future Development of Managerial Practices in Greece. 4. Jenny Anderson. "The New Battle of Puebla." Business Mexico, 7, 1996. pp. 36-39. 5. Chuck C. Y. Kwok. " A Global Survey of International Business." Journal of .Internal Business, 9, pp. 132135. Copyright @ 1999 by Association of Third World Studies, Inc. All rights reserved. No part of this publication may be reproduced or transmitted in any form or by any means, electronic or mechanical, including photocopy, recording, or any information storage or retrieval system, without permission in writing from the publisher.

Journal of Third World Studies (ISSN 8755-3449) is published bi-annually, Spring and Fall, by the Association of Third World Studies, Inc., P.O. Box 1232, Americus, Georgia 31709. Yearly subscription rates: $45.00. Single copies can be ordered from the Association for $23.00 per copy. ISBN 0-931971-30-6 Printed in the United States of America by Georgia Printing Service, Inc. Columbus, Georgia 31904 JOURNAL OF THIRD WORLD STUDIES (JTWS) Third World Development on the Eve of the New Millennium: Problems and Prospects Selected Papers Third World in Perspective Program Seminar Series Georgia Southwestern State University And Manuscripts Approved for Publication by the JTWS Board of Editors 1999 Edited by Harold Isaacs Editorial Assistant Kathryn L. Zak Associate Editors Dorothea A. L. Martin (Asia) John M. Mbaku (Africa) Michael B. Bishku (Middle East) .* Associate Professor, College of Business Administration and Education, The University of Sarasota, Sarasota, FL. Professor Theodore has published two books: A Comparison of the Evolution of Business Management in the United States and the Present and Future Development of Managerial Practices in Greece (1971); and The Development of Managerial Practices in Selected Nations in the World (1991). He is President of JDT Management Consultants, Inc. ' Journal of Third World Studies, Vol. XVI, No.2, Fall 1999. @ 1999 by Association of Third World Studies, Inc.