New research shows why the human brain struggles with “plenty of choice”

New research developed by Elena Reutskaja, an Associate Professor of Marketing at IESE Business School and colleagues from other universities uncover how human brains work when having to make a choice among an array of different options. For example, how, when doing our shopping, we choose from 25 or 30 different types of milk or 50 varieties of ice-cream.

The research, published on Monday in Nature Human Behaviour, shows that although the human  brain finds the concept of choice – or even an abundance of choice – attractive, too many options make it difficult for the brain to process, evaluate and compare these choices. This phenomenon is called choice overload and it explains why we often walk away from a well-stocked shop or supermarket empty-handed.

Reutskaja says: “In Western cultures we like to have choice, we enjoy freedom and choice makes us feel that we are in control of our decisions.”

Beyond a certain point, however, that choice becomes overwhelming and decision-making is impaired.

“If given too many alternatives people can delay decisions, and this might have serious consequences.  For example, when a person must undergo medical treatment but has to choose where to do it from a set of different hospitals. The decision might be delayed as a consequence, which could mean putting their health at risk.”

These findings have implications for a broad spectrum of sectors and fields: from businesses (retail) and policy-making (pension schemes), to web design (how to present many options on the screen), education (choosing a school for your kid) and healthcare (choosing hospitals on the NHS website).

The Human Brain at Work

The paper, “Choice overload reduces neural signatures of choice set value in dorsal striatum and anterior cingulate cortex,” examines the processes that happen in the human brain when it assesses different sets of options.

The researchers found that the brain made “mini calculations” weighing potential rewards against the costs of having to choose from these options – costs being the time and energy spent choosing A over B.

“We found that activity in some areas of the brain reflect the “cost of choice”. These costs increase with the number of options and so does the activity in those areas, “Reutskaja explains. 

Reutskaja and her colleagues used MRI scanners to study brain activity of people choosing from different-sized assortments. They found two regions that encode choice overload: the anterior cingulate cortex (ACC), where the potential costs and benefits of decisions are weighed, and the striatum, a part of the brain responsible for determining reward. They found that both areas were more active when presented with an “intermediate” number of choices.

Participants were given sets of 6, 12 and 24 options. The researchers observed that for both sets of 6 and 24, brain activity in striatum and ACC was lower than when given 12 options.

 “Too few or too many choices generate less value for people than sets with an intermediate number of options – in this case, 12. These medium-sized sets, however, have enough variety to satisfy our needs but they are not too “costly” for our decision-making process,” explains Reutskaja. “12 is not a magic number though. An optimal number of choices for our brain depends on many factors such as the context, personal characteristics, type of products we choose and so on.”

Critically, the researchers found that when a preferred alternative was added to the choice set, the human brain was automatically able to handle more alternatives and not feel overwhelmed. This suggests that even when confronted with too many options, decision-making can still be simplified.

Reutskaja and colleagues’ research offers new and important insights into the internal mechanisms that are activated during decision-making.

It clearly points to the importance of capping the number of options available in terms of the perceived value to the decision-maker.

Only a starting point

Prior research into choice overload has traditionally been undertaken using participant surveys and self-reporting mechanisms.

This new paper leverages inter-disciplinary collaboration, incorporating neuroscientific methodology, to shed greater light on the complex neural processes involved in decision-making and opens the door to future research in this fascinating area. For business leaders, public sector leaders and policy-makers, these findings will have real value in terms of optimising services and offerings.  

About the authors

The paper titled “Choice overload reduces neural signatures of choice set value in dorsal striatum and anterior cingulate cortex,” was written by IESE Business School Associate Professor of Marketing Elena Reutskaja; Colin Camerer, the Robert Kirby Professor of Behavioral Finance and Economics at the California Institute of Technology; Axel Lindner, Group Leader of the Neurobiology of Decision Lab, Hertie Institute for Clinical Brain Research; Rosemarie Nagel, an ICREA Research Professor at Universitat Pompeu Fabra and Barcelona GSE Research; Professor; and Richard A. Andersen, the James G. Boswell Professor of Neuroscience at California Institute of Technology.  

Jaime Caruana, Former Bank of Spain Governor, joins IESE Faculty

Jaime Caruana, a former governor of the Bank of Spain and leading policymaker in the global financial sector, has joined the faculty of IESE.

Caruana, who was governor of the Bank of Spain from 2000 to 2006, has been appointed senior lecturer in IESE’s Economics Department.

Caruana brings to IESE decades of experience in global finance – both in the public and private spheres. Currently an independent director on the board of Spanish banking group BBVA, he served as the general manager of the Bank for International Settlements from 2009 to 2017. Prior to that, he worked in the Monetary and Capital Markets Department of the International Monetary Fund.

As governor of the Bank of Spain, Caruana served on the Governing Council of the European Central Bank, and was chairman of the Basel Committee on Banking Supervision from 2003 to 2006.

He has been a member of the Financial Stability Forum (now the Financial Stability Board), a group of global officials working to promote international financial stability, since 2003. He is also a member of the Group of Thirty.

Prior to joining the Bank of Spain, Caruana worked in the private financial sector for nearly 10 years. He holds a MSc in Telecommunications Engineering from the Universidad Politécnica de Madrid.

Nitin Nohria: “We better apply our energies to solving societal problems”

  • IESE kicks off 60th anniversary celebrations with HBS Dean Nitin Nohria

In a world of unsustainable growth, disaffected workers, persistent gender inequalities and political upheaval, are traditional business schools still relevant?

“Business schools were created in response to societal problems. There is a new set of societal problems and we better apply our energies to solve them,” Harvard Business School (HBS) Dean Nitin Nohria said recently at an event on the Barcelona campus to mark the launch of IESE’s 60th anniversary celebrations.

Nohria and IESE Dean Franz Heukamp discussed what business schools must do going forward to produce leaders capable of addressing these issues – in a context of technological change and new forms of learning.

IESE and HBS have been partners since IESE’s earliest days. When the founders of IESE began imagining a new school for executives, they travelled around Europe to discover best practices and also sought the advice of Harvard, a forerunner in business education. The Harvard-IESE Committee was formed in 1963, and the close alliance continues to this day.

But the world in which IESE was created is today a very different place. And while many global indicators – in areas such as health, government and living standards – are as strong as they’ve been in human history, there is also an urgent sense that we must do better by the planet and by the people who inhabit it.

“There are many open questions, issues that need resolution,” Heukamp said. “I think it’s clear that the school’s mission is as relevant as ever.”

For both deans, businesses, and the well-trained people who create and run them, are a crucial part of the solution – but only if they are creative in proposing new approaches to employment, the gender gap and the company’s place in society.

Challenge of Inclusion, Sustainability and Gender Equality

Current and future business leaders in advanced economies must address the failure to provide jobs and upward mobility to many workers, who now feel excluded from progress, they said. That failure in part gave rise to swelling populist political movements in the developed world – which in turn produce measures that only exacerbate problems. “Politics is not the solution to the problem,” Nohria said.

Productivity in advanced economies must increase, so that jobs remain in local communities and employment options stay strong and varied. People with all levels of education – from high school diplomas to associate degrees to advanced studies – must have meaningful employment choices in their communities. “This problem requires our most creative imagination,” Nohria said.

Investors, employees and consumers are increasingly rewarding companies with a sense of community and sustainability, and which show respect for the environment, endure over time and are concerned with their employees’ wellbeing.

Sustainability in turn requires new ways of evaluating companies, based less on quarterly financial results or stock market performance. “I think the big bottleneck here is measurement,” Nohria said. “But we’re starting to see a nascent measurement industry taking place.”

Gender equality is another pending moral and economic issue that managers must grapple with. The #MeToo movement has served as “a very painful reminder that even as we have increased numerically the number of women in the workforce, there is a long, long way to go,” Nohria said.

For business schools, it starts at home, by ensuring that female students enjoy the same opportunities and rewards as their male counterparts. If schools themselves serve as examples of gender equality, graduates enter the workforce with the same expectations.

Business schools can also do their part to promote research on gender issues such as the pay gap, opportunity imbalances and policies that penalize working mothers, Heukamp added.

The Future of MBAs and the Case Method

Change is imperative in the classroom as well, requiring the traditional MBA programs that have been the backbone of many business schools to adapt. Gone is the guarantee that a two-year degree earned early in your career prepares you for a lifetime of work. “I think that we as business schools have to get better prepared to be relevant and engaging and interesting to our students throughout their lives,” Nohria said.

“We will have to go from episodic education to on-demand education,” he added. With people living and working longer than ever, learning must continue throughout their lives, in a wide variety of formats.

Business education must also respond to the changing global realities. As countries such as China and India carry increasing weight in the global economy, they will produce their own world-class business schools.

For Nohria, institutions such as HBS must approach the developing world “first and foremost with intellectual humility,” recognizing that their brand of management does not necessarily dominate. Rather, it is about training global leaders. “Our comparative advantage will come from being able to deliver great global education,” he said.

What won’t change is the sort of general management approach HBS and IESE take, the deans said. “I feel quite optimistic that the value of management education, and in particular management education that puts an emphasis on judgment over skills, will increase over time,” Nohria said.

The case method is part and parcel of that, because it walks students through the decision-making process and teaches them to make sound judgment. “It’s very hard to imagine any other method reproducing that,” he said. The case method also keeps the curriculum – and professors’ knowledge – current.

As Heukamp pointed out, new combinations of classroom experience and online learning can help make the case method more, rather than less, relevant. “I think we use the case method better today than perhaps we did in the past,” Heukamp said.

The ultimate goal? Producing leaders who view business as a means to better the world around them – just as it was at IESE’s founding six decades ago. Says Nohria: “The reality is that there is no engine for human prosperity that is better than business.”

Six new full-time professors bring global expertise to IESE

Six full-time professors are joining the IESE faculty for the 2018-19 academic year, bringing their academic excellence and their commitment to students to the school.

The new faculty members are: Charlène Cosandier, Tobias Dennerlein, Joan Jané, Mihalis Markakis, Jeroen Neckebrouck and Albert Valentí. The professors come from a wide range of academic disciplines, global universities and professional backgrounds:

1. Charlène CosandierAssistant Professor, Economics Department

Prof. Cosandier received her PhD in Economics from the University of Iowa and her master’s degree in Economics from the Toulouse School of Economics.

She specializes in applied microeconomic theory, and has studied the effect of the emergence of non-practicing entities on the market for patents and in patent buyouts, and its policy implications.

Prof. Cosandier currently examines the endogenous formation of bidding consortia in auctions for assets of uncertain value in environments with strong asymmetries across bidders.

2. Tobias DennerleinAssistant Professor, Managing People in Organizations Department

Prof. Dennerlein holds a joint PhD in Organizational Behavior from Rotterdam School of Management (Erasmus University) and HEC Lausanne (University of Lausanne).

His research examines how leadership behavior (e.g., empowering leadership, narcissistic leadership, leader justice) and employees’ individual differences jointly affect employee creativity and performance. He is particularly interested in employee creativity and pro-active types of work behavior.

His work has appeared in the European Journal of International Management, and he presents his work regularly at leading management conferences such as the Academy of Management Meeting. He is a member of the Academy of Management.

Prof. Dennerlein worked in various industries, such as consulting, automotive and sporting goods, across several countries, but gained most of his business experience in finance in Germany and the U.K.

3. Joan JanéSenior Lecturer, Production, Technology and Operations Management Department

Prof. Jané earned a PhD in Industrial Engineering from the Universitat Politècnica de Catalunya and an MBA from ESADE Business School; he completed a PDG at IESE. He first joined IESE in 2012 as a part-time lecturer in Production, Technology and Operations Management in its Executive Education programs.

Prof. Jané began his professional career at HP as a manufacturing engineer and since then has held different regional management positions in manufacturing, procurement, planning, supply chain and logistics.

His areas of expertise are the management, optimization and innovation of global supply chain operations, with a particular emphasis on the reengineering of logistics networks, outsourcing and strategic alliances in supply chain, manufacturing and logistics. He is also specialist in Industry 4.0, new production technologies such as 3D printing, the design of customer-centric operations and strategic project management under complexity.

4. Mihalis MarkakisAssistant Professor, Production, Technology and Operations Management Department

Prof. Markakis holds a PhD from the Massachusetts Institute of Technology. Before joining IESE, he worked at the School of Economics and Business at the Universitat Pompeu Fabra.

He has held teaching positions at MIT, INSEAD and London Business School, as well as a research position in Bell Labs. He is the recipient of the Ramon y Cajal and the Juan de la Cierva fellowships from the Spanish government, and the COFUND fellowship from the Marie Curie Actions of the European Commission.

His research interests are in modeling, analysis and optimization of stochastic systems, and their applications in operations research and the management sciences. In the current era of big data and driverless cars, his research focuses on learning problems arising in operations management, as well as economic issues in transportation science.

His work has been published in top academic journals such as Management Science and Mathematics of Operations Research.

5. Jeroen NeckebrouckAssistant Professor, Entrepreneurship Department

Prof. Neckebrouck received a PhD in Business Economics from Vlerick Business School, and master’s degrees in Industrial Management, in Business Economics, and in Civil Engineering from Ghent University.

His research focuses on the governance of privately held entrepreneurial firms, with a particular interest in family firms and private equity. His current research centers on how private equity minority investments can contribute to the performance of family firms, and on the relationship between private firm governance and the development of firm-specific human capital.

His research has been published in journals such as the Academy of Management JournalVenture Capital and the Academy of Management Best Paper Proceedings. In 2018, his dissertation-related work won the Best Doctoral Dissertation Award from the Family Firm Institute (FFI).

Prior to joining academia, Prof. Neckebrouck was a management consultant in the telecom industry.

6. Albert ValentíAssistant Professor, Marketing Department

Prof. Valentí holds a PhD in Management from Boston University, where he also taught Marketing Research.

Prof. Valentí’s research has received prestigious awards for its impact in business practice. He is the recipient of the 2018 ISMS-MSI Gary Lilien Practice Prize Award for the outstanding implementation of marketing science concepts and methods. He was also the winner of the 2017 AMA-EBSCO Answers in Action Grant initiative for a project that represents a deep collaboration between academia and industry.

Prof. Valentí has professional and academic experience in four continents. He has advised service and industrial multinationals in several sectors, and co-founded and participated in the development of a tech startup.

IESE welcomes MBA class of 2020

The MBA Class of 2020, a diverse global group of future business leaders, begins its educational journey at IESE this week.

The incoming Class of 2020 has 357 students, among the school’s largest classes to date. With the expansion of the MBA program in recent years, IESE has over 700 full-time MBA students on its Barcelona campus.

The new class brings together students from across the globe – a total of 55 nationalities in all, with 84% of students coming from abroad. After Spain, the second-largest group of MBA candidates – 12% – comes from the U.S., followed by Brazil with nearly 8%. There are also many students from India and other parts of Asia, Latin America and across Europe. Women account for 26% of the class.

The Class of 2020 is diverse in other ways as well. While many students come from backgrounds in financial services and consulting, 65% have professional experience in other business areas, including retail, medicine, law, marketing and non-profits.

The participants have an average of five years of professional experience and commit full-time to the program, which is taught in English, for 19 months. The average age of the Class of 2020 is 29.3 years.

The Class of 2020 starts its MBA as IESE celebrates its 60th anniversary. IESE was founded in 1958, offering executive education programs to business leaders. In 1963, IESE signed an alliance with Harvard Business School and then launched its MBA, becoming Europe’s first two-year MBA program. The school has since expanded to five campuses: Barcelona, Madrid, São Paulo, New York and Munich.

IESE Managing Media Book wins prestigious award

Managing Media Businesses: A Game Plan to Navigate Disruption and Uncertainty, edited by Prof. Mike Rosenberg and Philip Seager and featuring the work of IESE professors, has won the 2018 Robert Picard Award.

Rosenberg and Seager accepted the award, given to “a book or monograph published in the last year that has contributed to the field of media management, economics or entrepreneurship,” during the Association for Education in Journalism and Mass Communication (AEJMC) Conference in Washington, D.C.

The book had been nominated by Bozena Mierzejewska, a professor of Communications and Media Management at Fordham University’s Gabelli School of Business, who wrote: “I was very impressed with the work you have put together in this book and believe that it deserves to be considered for this prestigious award.”

In June, the book was reviewed in the International Journal on Media Management, which said: “This compendium of strong business insights informed by sharp business scholars and executives provides compelling arguments by anticipating reader questions and lucidly explaining complex topics with ease. A highly accessible textbook that expertly blends theory and practice together, the book’s breadth and depth will continue to serve scholars and professionals well after its initial publication.”

Award By Leading Journalism Education Body

Awards Committee Chair Axel Roepnack presented the prize on behalf of the Media Management, Economics and Entrepreneurship (MMEE) division of the AEJMC. The AEJMC is a professional body of journalism and mass communication educators, students and media professionals whose mission is to advance education, foster scholarly research and cultivate better professional practice. Robert Picard, for whom the award is named, is one of the leading academic experts on media businesses and a specialist on media economics and policy. He is a senior research fellow at the Reuters Institute, University of Oxford.

The award recognizes IESE’s scholarship and contributions to the field of media management. Besides chapters by Mike Rosenberg (on Strategy, Leadership and Scenario Planning), the book showcases the expertise of these IESE professors and collaborators: Adrian Caldart (Strategic Management), Hillel M. Maximon (Accounting), Julian Villanueva (Marketing), Miguel A. Ariño and Rafael de Santiago(Managerial Decision Sciences), Philip Moscoso (Production, Technology and Operations Management), Sandra Sieber (Information Systems) and Ahmad Rahnema Alavi and Jan Simon (Financial Management).

Research with the Executive Agenda in Mind

Research by IESE professors over the last year has looked at which countries are doing best to promote women in leadership, at frustration over inequalities in the workplace, at the future of globalized trade, and much more. Here, a selection of research highlights:

The IESE Women in Leadership (I-WIL) Index, directed by professor Nuria Chinchilla evaluates the state of women’s leadership in 34 countries and offers a series of recommendations to break down the barriers blocking its development.

Another pertinent study on gender issues by professor Mireia Las Heras finds that almost nine in 10 Spaniards interviewed complain that they work in environments that hinder equal access to opportunities.

And there are many other relevant topics that IESE’s faculty has tackled this past year in order to help guide today’s leaders. Research output for the 2017-2018 academic year includes 12 books, 29 studies, 46 peer-reviewed academic articles, 67 business cases, 21 technical notes and other materials.

Globalization or Protectionism?

The future of international trade is a widespread concern addressed by professor Pankaj Ghemawat in his book The New Global Road Map. Based on his research, Ghemawat offers enduring strategies for global growth and for handling the current anger directed at globalization.

The current climate of uncertainty also affects how companies are collaborating and joining forces with one another. A study by professor Africa Ariño analyzes how much strategic alliances should evolve to adapt to changes in circumstances and partners’ actions. Meanwhile, professor Stefano Sacchetto has developed a model that evaluates the effects of M&A activity on productivity, the economy and entrepreneurship.

Obviously, institutional investors have not been immune to new and deepening geopolitical tensions, as shown in the latest Venture Capital and Private Equity Country Attractiveness Index, led by professor Heinrich Liechtenstein, which includes a post-Brexit scenario analysis.

Unstoppable Advances in Technology

Digital transformation is another area receiving significant attention from researchers. For starters, if your organization doesn’t have a Chief Digital Officer (CDO) now, it probably will soon, as professor Sanja Tumbas predicts in an article analyzing the role of these institutional entrepreneurs, whose functions are still evolving.

And how should business leaders adapt to the growing role of artificial intelligence (AI)? That is the great question addressed by experts taking part in the fifth edition of The Future of Leadership Development Conference, one of the 24 academic events organized by IESE this past year.

The Human Factor

The rise of AI ​​should not eclipse the fact that the success of companies comes from people above all else. And so it is important to understand the potential and the needs of millennials, the generation that will soon make up the majority of the workforce. As professor Guido Stein warns in his book on leaders and millennials, the video-game generation is ushering in some significant changes at work.

It’s also vital to remember the values and ethos of work, as highlighted by the 20th International Symposium on Ethics, Business and Society, which addressed the meaning of work in the Fourth Industrial Revolution and a look at the changes ahead.

In addition, the latest research on how human behavior effects decision-making should be useful for management. For starters, a study by professor Kate Barasz shows that we don’t like to leave things unfinished, so grouping tasks can help motivate people and boost productivity (and this same mechanism could be applied to marketing products).

Other research, in this case by professor Johannes Müller-Trede, warns how the way numbers are presented can condition our decisions.

And professor Sebastian Hafenbrädl uncovers two things that can enable us to overcome our cognitive bias (a cold-hot empathy gap) in order to improve outcomes in competitive escalations, such as bidding wars.

More Research via IESE Insight

This is but a fraction of the research activity carried out by IESE faculty over the 2017-2018 academic year and continuing into the next year. For a sense of what’s next, keep in mind that there are currently about 60 active projects receiving public funding (funding that was secured with help from the Project Unit) as well as many privately-funded investigations.

For more relevant research, look to IESE Insight‘s knowledge portal, where you can find articles, infographics, podcasts and videos on the latest from IESE professors and its practical applications to today’s fast-changing business world.

Ownership, Competition and Innovation

Prof. Xavier Vives has been awarded one of the European Union’s most prestigious grants, for a research project that looks at the impact of corporate ownership structures on competition, innovation and macroeconomics.

The five-year European Research Council Advanced Grant began on July 1.

With the rise in institutional investing, the main shareholders of many large companies are the same. This, particularly among companies in the same sector, has raised concerns about the possible negative effects on competition, investment and innovation. This in turn could have macroeconomic impact.

Prof. Vives’ research focuses on developing theoretical and empirical models to analyze how these changes affect market power, incentives for investment and innovation, as well as aggregate production and the labor market.

The research project, titled “OCIAN – Ownership, Competition, Innovation, and Antitrust,” integrates the perspectives and tools of industrial organization, corporate finance and network theory to paint a complete picture of the relationship between ownership structure, competition and innovation.

A new area with IESE at the fore

Vives’ project constitutes a new step toward understanding the implications of ownership concentration in large companies, a nascent area of research in which IESE has played a leading role.

Among other research, a study by Prof. José Azar revealed that the presence of common shareholders in the aerospace industry is closely related to the increase in ticket prices, despite the lower number of passengers.

The research caught the attention of economists, journalists and regulators, so much so that the U.S. Department of Justice started an investigation on it in 2016. Since then, the research has been cited by media outlets including: The New York Times, The Wall Street Journal, The EconomistFinancial Times, New Yorker and Bloomberg BusinessweekBlackRock responded in 2017 with a technical document in which it questioned the mechanism by which the presence of common shareholders would bring about higher prices.

Additionally, research by Profs. Miguel Antón and Mireia Giné links CEO compensation, competition and common shareholders in companies in the same sector. According to the authors, the objective of these shareholders is clear: “Maximize the value of their entire portfolio and not so much the results of each individual company in it.” That means neutralizing the competition among investments so that none of them lose.

 

About IESE Business School

IESE is one of the world’s most international business schools, with campuses in Barcelona, Madrid, Munich, New York and São Paulo. Consistently ranked within the top ten worldwide, IESE has pioneered business education in Europe since its founding in 1958 in Barcelona. IESE seeks to develop business leaders with solid business skills, a global mindset and a desire to make a positive impact on society. The school distinguishes itself in its general-management approach, extensive use of the case method, international outreach, and emphasis on placing people at the heart of managerial decision-making. With a truly global outlook, IESE currently runs programs on four continents.

International Flavors & Fragrances (IFF) wins the Industrial Excellence Award granted by Celsa and IESE

  • IFF Benicarló, a subsidiary of International Flavors & Fragrances (IFF), a company that produces and supplies fragrance ingredients, has won this year´s annual Industrial Excellence Award, which is granted each year by the Celsa Group™ and IESE business school.
  • The award recognizes the work of industrial companies whose strategies contribute to the competitiveness of the Spanish economy.

International Flavors & Fragrances (IFF) has received the Industrial Excellence Award due to an outstanding industrial strategy that has contributed to Spain´s economic competitiveness in 2018. The Industrial Excellence Award 2018, which is promoted by Celsa Group™ – the leading Spanish steel group – together with the top-rated business school, IESE, highlights how IFF´s strategy is based on solid values that are consistently aligned with both its industrial and commercial areas.

The jury particularly singled out for praise IFF’s high levels of operational excellence, its passion and focus for innovation (which has led the company to attract important strategic investments), its emphasis on continuous improvement, its commitment to sustainability and its corporate culture, which allows it to bring out the best in its people.

IFF will now represent Spain to compete for the Industrial Excellence Award Europe, against corporations in other countries such as France, Germany, the Netherlands, Turkey and the U.K.

The other three finalists of this edition are (in alphabetical order): Clickedu, a platform in the cloud that is present in more than 600 schools, and which allows the integrated management of an educational center; Dara-Pharm, a company that designs, manufactures and markets automatic process and packaging machinery for the pharmaceutical, biotechnology and cosmetics industries; and Logisfashion, a logistics operator specialized in providing integral and global service to companies in the fashion sector.

IESE professor Eduard Calvo opened this year’s event, followed by Ramón Pastor, Vice President and General Manager of HP, who talked about 3D printing technology and its implications in the processes of production and design of new products. The event was also attended by the dean of IESE Business School, Franz Heukamp, and the president of the Celsa Group, Francesc Rubiralta.

Francesc Rubiralta thanked the participants for their “contribution to the dynamism of our country’s economy” and recalled that Celsa Group™ and IESE, through the Celsa Chair of Competitiveness in Manufacturing, have been leading the Industrial Excellence Award initiative in Spain for many years.

Already in its 10th edition in Spain, the finalists of this prestigious award make up a group of 40 industrial companies that together contribute around 2.2% to Spain’s GDP. The list of finalists and winners of recent years is as follows:

  • 2017: Mahou San Miguel (winner); Jeanology and TMB Bus (finalists).
  • 2016: Seat Components (winner); Aciturri Aeronáutica, Lilly Alcobendas, Continental Rubí (finalists).
  • 2015: Mayoral Children’s Fashion (winner); Essilor, Europac Packaging (finalists).
  • 2014: Volkswagen Navarra (winner); Gonvarri Steel Services (finalist).
  • 2013: Orkli (winner); Acorn Agrisolutions, Ormazabal (finalists).
  • 2012: Aernnova (winner); Alzamora Packaging, Europastry, Volkswagen Navarra (finalists).
  • 2011: John Deere Ibérica (winner); Bunge, Covap, Huf, Macsa Id (finalists).
  • 2010: Ficosa (winner); Codorníu, Ega Master, Igeotest, Vestas (finalists).
  • 2009: Martínez Loriente (winner); Comdipunt, Esteve, La Farga Lacambra, Sara Lee, Seat (finalists).

 

About the CELSA Chair of Competitiveness in Manufacturing

The CELSA Chair of Competitiveness in Manufacturing was created with the aim of producing research, generating ideas and disseminating knowledge in the area of competitiveness in the industrial sector. As a result of this commitment, the CELSA Chair of IESE develops powerful research on the industrial sector and its competitiveness, and, since 2009, rewards the best factories in Spain. More information.

About IESE Business School

IESE, the graduate business school of the University of Navarra, is one of the world’s most international business schools, with campuses in Barcelona, Madrid, Munich, New York and São Paulo.

IESE has pioneered business education in Europe since its founding in 1958 in Barcelona. The mission of IESE is to train leaders who can have a positive and lasting impact on people, companies and society thanks to their professionalism, integrity and spirit of service. During its 60 years of history, it has received numerous international awards for its teaching and research work.

In the last four years, IESE has positioned itself as number 1 in the world in Executive Education programs, according to the Financial Times ranking.   

 

About CELSA GROUP ™

Celsa Group ™  is the leading Spanish private steel group and the third largest manufacturer of long steel products in Europe. The multinational consists of six large business groups with steel mills, rolling mills, transformer plants, distribution companies and recyclers. It has more than 9,100 employees around the world and is present industrially in Denmark, Finland, France, Norway, Poland, Spain, Sweden and the United Kingdom.

How Are Energy and Migration Linked in Africa?

  • Munich event with Fuel Freedom Foundation looks at energy poverty

Destination Europe: Every year, thousands of Africans take harrowing journeys to escape poverty and a lack of opportunities in their countries. The influx of refugees is not only a humanitarian crisis, but is also putting political and social systems in Europe to the test.

“Europe can expect a continuing migration boom over the next decade if nothing is done to make life better in Africa,” said Joseph “Yossie” Hollander, co-founder and chairman of Fuel Freedom Foundation. Under the banner “Addressing the EU Migration Crisis with Energy Progress in Sub-Saharan Africa,” IESE brought high-ranking experts together at the Munich campus to shed light on the situation and examine how fostering entrepreneurship in Africa can help.

Hollander names energy poverty as one of the root causes that is pushing young Africans to look elsewhere for opportunity. That energy poverty touches four areas:

  1. Transportation: Everything from food staples to critical aid goods to medicine are subject to higher costs as a result of inflated fuel costs.
  2. Fertilizers: Low agricultural yields and food scarcity are due to a lack of affordable fertilizers.
  3. Cooking fuels: Wood and biomass are commonly used in Africa for cooking food. Aside from driving deforestation, using wood and biomass leads to illnesses caused by cooking-related airborne pollution.
  4. Electricity: Most rural electricity is produced using generators that run on diesel and gasoline. The fuels are polluting and expensive, and supply is unreliable.

The hardest hit in Africa are the sub-Saharan countries. For Fuel Freedom Foundation, the long-term solution to these problems doesn’t lie in aid, but in creating local initiatives with local business people. “They know what works and doesn’t in their countries, and they are the only ones who can build appropriate systems,” said Hollander.

The goal is to foster scalable business approaches that address problems at their source and provide economic opportunities to millions of Africans. Examples: Investments in clean-cooking businesses, electricity generation projects, local fuel production and local fertilizer production plants. Fuel Freedom Foundation assists with seed money of up to 30%; the remaining funding has to come from African investors.

IESE as a Partner

To help drive business creation, IESE and Fuel Freedom Foundation have established an executive course curriculum. At IESE, the activities are bundled under the IESE Fuel Freedom Chair for Energy and Social DevelopmentProf. Ahmad Rahnema, who holds the chair: “It is impossible to achieve development without energy. Poverty is a consequence of a lack of infrastructure, market economies, regulations and corruption. Working on these dimensions helps alleviate poverty and improve quality of life for people.”

To date, executive education courses have been offered in two countries: Kenya in March 2017 and Cote d’Ivoire in May 2018. Among the participants are government leaders, private sector business people and entrepreneurs, and NGOs.

A case study approach is employed, with the case studies applicable to the individual markets. Melissa Blaustein, director of International Advocacy and Digital Programs at the Fuel Freedom Foundation, noted that during the course in Kenya, participants worked on a Brazilian business case on adding ethanol to gasoline. “That activity gave rise to a concrete business proposition that is being actively pursued and has already led to concrete results,” she said.

Think Big

George Njenga, dean of Strathmore Business School, is impressed with the fast results, which he attributes to IESE’s involvement in Africa under its Africa Initiative. From the perspective of an African, Njenga likes the fact that “IESE and Fuel Freedom Foundation didn’t come to solve problems for Africa, but to ‘walk’ with us.”

To close the event, Heinrich Liechtenstein, director of the IESE Munich campus, asked Hollander about his plans for Fuel Freedom Foundation, encouraging him to think big. “We may just be at the beginning,” said Hollander. “But my target is to have 100 countries in which projects are going on. And in those countries, I’d like to see five businesses starting within three years of our involvement.” That spells hope – not only for Africa.