INCAE’s Success Is Rooted in Its History
After winding through a quiet neighborhood of student homes, a narrow road arrives at the heart of the Central American Institute of Business Administration (INCAE) in La Garita, Alajuela, northwest of San José. At the center of the campus, a tall and well-kept yellow building is home to the INCAE library. There, one can find the prestigious history of the 45-year-old institute and the reasons INCAE is considered the best business school in Latin America.
JFK and Harvard Roots
On March 18, 1963, then-United States President John F. Kennedy arrived in San José to meet with presidents of the Central American nations. In his speech to open the conference at the Teatro Nacional in San José, Kennedy applauded the region’s efforts toward progress.
On the second day of the conference, the Declaration of Central America was signed. It included a statement of the presidents’ interest in strengthening the region’s educational institutions. And included in the discussions was the desire for the U.S. to help establish a top-notch business school in the region to help boost economic development. In the following month, Kennedy wrote a letter to George Baker, then dean of the Harvard Business School in the U.S. state of Massachusetts, urging him to establish a business administration program in Central America. On June 15, the Harvard Business School and the United States Agency for International Development (USAID) combined efforts to create INCAE, which would become a permanent graduate school of business administration in the region.
In 1964, Baker gave the inaugural address at INCAE’s first public event, the Advanced Management Program, in Antigua, Guatemala. Two years later, in October of 1966, INCAE officially established its first campus in Managua, Nicaragua. Construction of the building and residencies began in April of 1967 and, on Aug. 28 of that year, 459 books were chosen by the Harvard Business School to create the first INCAE library.
INCAE flourished throughout the 1970s in Managua. More areas of study were added and more renowned faculty members with prestigious backgrounds were hired
The Costa Rica Alternative
However, with the coming to power of the Sandinista regime in Nicaragua, with its anticapitalist outlook, administrators at INCAE began to consider relocating the school.
“The Sandinistas took over in 1979 and, by 1981 it was very hard,” said INCAE librarian Thomas Bloch, who worked at the campus in Nicaragua from 1971 to 1983. “INCAE had a real problem in recruiting students and faculty. Nicaragua had a bad reputation, although if you were in the country, it was very calm. But, INCAE authorities felt they needed to open up a second campus in order for the institution to survive because they were so unsure about what was going to happen in Nicaragua.”
In 1983, a new site was selected for INCAE in Costa Rica and, in 1984, INCAE opened its campus in La Garita. The campus has a history of its own.
“This used to be a country club called the Racquet Country Club, as in tennis racket,” Bloch said. “In Alajuela, it was called ‘Gringo gulch’. But it went broke and Banco Nacional took it over. Then, when Costa Rica offered the country club to INCAE, USAID injected a lot of funds, and, along with that, they built the classrooms and administrative buildings.”
In 1987, Costa Rican President Oscar Arias met with other Central American presidents at INCAE to discuss initiatives for the cessation of the fighting within the region. INCAE’s campus offered a refuge from the public eye and a secluded area for the presidential meetings. It is believed that the terms of the Esquipulas Peace Agreement were decided at a table located on the INCAE campus. That agreement brought the war between the Nicaraguan Sandinistas and the Contras to an end.
“The table is still here,” said Lawrence Pratt, director of the Latin American Center for Competitiveness in Sustainable Development. “It’s just a normal, older table. It’s not marked or anything, but it’s known as the table where the peace agreement originated.”
With continued support from the Harvard Business School, INCAE programs in Managua and Alajuela have thrived over the past two decades.
This year, América Economía, a publication that ranks Latin American MBA programs, ranked INCAE as the number one MBA program in all of Latin America.
This marks the fifth time this decade the publication has ranked INCAE as the top business school in Latin America. The Wall Street Journal also has acknowledged INCAE, ranking it the 10th best international MBA program in 2005 and 2006.
The success of INCAE is rooted in the design of the school’s instruction model. INCAE, which offers MBA and executive MBA degrees in English and Spanish, uses a case management method of instruction, developed at Harvard. In this system, students are given a business scenario and, as a group, they design a business model that they feel best meets the needs of the situation.
“The case method is the tool for learning here,” said Arturo Condo, rector at INCAE. “We present them (students) with a situation, which is usually cases, and they are supposed to go into the situation and take a position on what they would do individually. They then share their positions with a team of six to 10 members and discuss and decide what they would do in that situation. This type of collaboration can be applied to every facet of a business culture, and it is a long, long shot from lecturing.”
Aside from the model of instruction, the diversity of students at INCAE is also a defining characteristic of the institution.
INCAE, an entirely residential business school, provides on-campus homes for all students.. Though most students are from Central America, students at INCAE hail from all over the world. INCAE actually aims to cap enrollment of Costa Rican students at 20 percent, meaning that the remaining 80 percent come from other nations.
“INCAE is very unique in that it is a regional business school,” said Bloch. “That means that, by its own rules, it has to get a percentage of students from different countries. As far as I know, it is the only regional business school in the world.”
When the students arrive for the two-year MBA program, they are assigned to study groups. The study groups are intentionally designed to combine students from different countries and backgrounds, with the inclusion of at least one Costa Rican student, who helps orient the foreign students to their new home. There are currently 110 students in the first year of the MBA program at the Alajuela campus, and 67 in the program at the Nicaragua campus.
“Our first class in 1967 was made up of a group of students from different Latin American countries, so it is in our DNA to have very diverse classes,” Condo said. “Our goal is to have 10 percent non-Latin American students. We believe our students gain a lot from being familiar with and interacting with other students from different backgrounds.”
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