1. June 18, 2009 Role of Business Schools in Developing Enterprises and SMEs How are the Business Schools Relevant for the Small and Medium Enterprises Dr. Arif Iqbal Rana Director, ESMEC Associate Professor, SDSB Lahore University of Management Sciences

2. June 18, 2009 Role of Business Schools in Developing Enterprises and SMEs Size of Firm Costs Transactional Cost Shirking Cost SME Competitiveness

3. June 18, 2009 Role of Business Schools in Developing Enterprises and SMEs Hennart (1993) Transaction Costs: The cost of measuring output in all of its dimensions and the consequence of not measuring it perfectly. Shirking Costs: The cost of directing and observing behavior and of failing to do so perfectly.

4. June 18, 2009 Role of Business Schools in Developing Enterprises and SMEs Size of Firm Costs Transactional Cost Shirking Cost High Scale Economies High Scale Economies Manufacturing

5. June 18, 2009 Role of Business Schools in Developing Enterprises and SMEs Size of Firm Costs Transactional Cost Shirking Cost Low Scale Economies Low Scale Economies Manufacturing

6. June 18, 2009 Role of Business Schools in Developing Enterprises and SMEs Advantages of Small Scale Operations Advantages Flexibility Expertise (specialization) Cost Savings: Lower labor costs Lower Taxes Lower overheads

7. June 18, 2009 Role of Business Schools in Developing Enterprises and SMEs AdvantagesDisadvantages FlexibilityLow Market Power (developing new products and markets) Expertise (specialization)Low Scale Economies (including procurement) Cost Savings: Lower labor costs Lower Taxes Lower overheads Transactional Costs (including lower quality control) Production Planning and Control Government Policy Financing Costs Disadvantages of Small Scale Operations

8. June 18, 2009 Role of Business Schools in Developing Enterprises and SMEs Business School Strengths Teaching Material Faculty Expertise Student Ambitions Personality Development Curriculum Focus

9. June 18, 2009 Role of Business Schools in Developing Enterprises and SMEs Business School Strengths Teaching MaterialCorporate Cases Faculty ExpertiseLarge Enterprise Issues Student AmbitionsCorporate Job Personality DevelopmentRisk Averse Curriculum FocusFunctional Expertise, Competitive Mindset

10. June 18, 2009 Role of Business Schools in Developing Enterprises and SMEs SME Needs Teaching MaterialSME Cases Faculty ExpertiseSmall Enterprise Issues Student AmbitionsEntrepreneurship Personality DevelopmentRisk Manager Curriculum FocusGeneralist/Multi- Disciplinary Expertise, Cooperative Mindset

11. June 18, 2009 Role of Business Schools in Developing Enterprises and SMEs Conclusion Need Redesign Management Programs Executive Degree Entrepreneurship Development Program Different Focus Different Content Different Participant Different Faculty

12. June 18, 2009 Role of Business Schools in Developing Enterprises and SMEs Jazak Allah Khair (Thank you) Questions?