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It was almost unimaginable just 25 25 years ago that China, the nemesis of the capitalist world, would embrace American-style management education. But today it is doing so with a gusto that puts the western world to shame.
While US business schools are reporting falling applications numbers for their MBA programmes – in many cases they are down by 30 per cent this year – partly as a result of competition from overseas and a tight labour market, students in China are beating at the doors of the top courses.
Although numbers have fallen off slightly in the past two years, the most popular programmes are still several times over-subscribed.
And, unlike in Europe, the Chinese government has put its weight behind this
American-created degree, making the MBA the gold standard in Chinese management education.
The Cultural Revolution in the 1960s and 1970s meant that many of China’s aspiring managers missed out on the education that their counterparts in the US and Europe took for granted. So these days, chief executives, board members and even top government officials are heading back to business school. A list of the participants on the top Chinese executive MBA programmes – MBA degrees for experienced working managers – reads like a list of the Who’s Who of corporate China.
The executive degree – which is studied part time and in Chinese – holds such cachet that it accounts for that about 90 per cent of the MBA programmes taught in China. are studied part–time and in Chinese. In fact, one One business school, China Europe International Business School, Ceibs, the business school set up which was set up in Shanghai in 1994 as a joint venture between the European Foundation for Management Development and Shanghai Jiaotong University, boasts the largest EMBA programme in the world, turning out 550 EMBA graduates a year.
If the US market is characterised by an oversupply of programmes and a lack of demand from students, the Chinese market could not be more different. To prevent the proliferation of third-rate degrees, the Chinese education department has introduced a step licensing process for licensing Chinese universities wishing to offer MBAs. This began in 1991, when just nine universities were licensed. Today 95 universities can award MBAs – but this is just chickenfeed a tiny number compared to with the US, with its thousands of programmes of varying quality.
While government restrictions are ostensibly the biggest restraining factor, China’s top business schools are themselves imposing their own restraints and being ultra-
conservative in the number of students they recruit take on in order to maintain the quality. of the product they offer.
Just as there are few academically trained senior managers in China, there is an even greater shortage of Western-trained academics, those who can teach the academic content of a western-style economics, strategy or leadership programme and those who can teach in a using western pedagogies, style, such as the case method.
Every Chinese business school with an international outlook is aware of the problem and most have formed a three-pronged approach to improve their programmes. The first is to attract back Chinese professors who are teaching overseas or to recruit new faculty who received their doctoral degrees in the US or Europe. The second is to send existing faculty to train in some of the top business schools, especially in the US. The third is to attract top US and European professors to teach on their programmes as visiting faculty and so learn from them.
Tsinghua University in Beijing, widely regarded as the Massachusetts Institute of Technology MIT of China, has placed faculty development at the top of its agenda. These days one-third of Tsinghua’s faculty, more than 30 in total, have degrees from US business schools, says Chen Guoqing, executive associate dean at Tsinghua, who was himself trained in Europe. “Our internal policy is that for every one PhD we recruit locally we need two with PhDs from the US.”
Prof Chen Guoqing says there is no shortage of faculty lecturers with doctoral degrees from the top US and European schools applying to work at Tsinghua; the difficulty is to get the right balance between these junior staff and the more experienced international faculty. Although they are fewer, in number, there is clearly a growing number of Chinese professors with overseas experience who want to return to China to teach in the country’s top universities. Many believe that China is one of the most exciting places in the world to conduct management research; others want to be instrumental in developing the country’s fledgling business school industry.
At Ceibs, in Shanghai, Chang Chun is one such experienced professor, returning to China after nearly two decades in the US. “Most new hires here [at Ceibs] are senior professors – we’ve only hired one or two rookies. They have come back to help establish research. In finance, for example, we are hiring a lot of people.”
Schools such as Tsinghua and Fudan University, in Shanghai, place great scorestore by on the relationships they have with top US business schools. to train their faculty. More than 40 of Tsinghua’s faculty have spent six months each at the Sloan school, learning how to develop programmes and teach. A further 30 of them have been to Harvard for up to three months, pursuing a similar mission. Fudan, too, has been sending its professors to MIT for the past decade.
Both Tsinghua and Fudan run an international MBA degree, taught in English, jointly with MIT, and Fudan, in particular, has been in the forefront of developing joint degrees with overseas
It Fudan runs programmes with the Olin school at Washington University, the Norwegian School of Management and Hong Kong University. Xiongwen Lu, executive associate dean of the school of management at Fudan University, believes the policy is working well. “We work with professors in partner schools. In this way we can reach a very high level.”
This process of osmosis will also work for developing research skills, believes Prof Lu. “We launch programmes to attract overseas colleagues to teach here, short-term and long-term. In this way we can help develop some research ideas, some research concepts about China. The big benefit for us is that they bring the latest ideas and business theory.”
The extraordinary pace with which China constantly reinvents itself means that the main focus for most business schools in China is to develop case studies – snapshots – of how companies operate. “We have to be very close to Chinese business,” says Tsinghua’s Prof Chen. But these top handful of Chinese schools have produced only around 200 Chinese case studies so far – faculty members from Harvard alone write this number of cases every year.
Many find it hard to imagine how Chinese business schools can catch up with the US, given the shortage of western-trained academics. What the schools clearly need is the ability to develop PhD programmes, but just as there are not the faculty staff to train managers, there are not the faculty staff to train the next generation of doctoral students either.
And while the top handful of schools have put in place the mechanisms to develop better programmes, most Chinese MBA programmes have not even recognisedthe the difficulty.
At Peking University, Michael Furst, the American associate dean for the Beijing International MBA programme, which is taught with faculty members from 26 American Jesuit business schools, has little faith in much of the management teaching in Chinese business schools. But he is philosophical. “There are a lot of Chinese organisations and they all need management . . . Students [on the general Chinese MBA programmes] will get mediocre training and they will learn a little on the job. It’s better than what we had before.”
However, there is little doubt that the next decade will see the rise of a handful of world-class business schools in China, schools that will compete on the world stage.
As TsinghuaProf Chen concludes: “We want to be world- class. We need to be recognised by the world. We want more and more international students to come.”
FOREIGN SPONSORS PROVIDE PROFESSORS, CAMPUSES AND TIME
ABN Amro, Bayer and Citigroup are an ABC of corporate sponsors and all fund professorial chairs at business schools. However, along with Alcatel, British American Tobacco and Philips, the professors they sponsor do not work in the US, but in China.
One of the distinctive characteristics of the top Chinese business schools is the eagerness with which non-Chinese companies and individuals have poured time and money into helping to develop the schools.
The biggest donations have been for infrastructure. At Fudan in Shanghai, the money for its building came from the Starr Foundation – the American Cornelius Vander Starr set up his first insurance company in Shanghai in 1955. At Tsinghua University in Beijing, the main Weilun building on the campus is named after Quo-Wei Lee, chairman of the Hang Seng Bank in Hong Kong.
The expansive home for the Beijing University MBA programme at Peking University was even built with money donated by a Taiwanese businessman.
But companies are not just giving money. Lord Browne, chief executive of BP, is chairman of Tsinghua’s advisory board, and John Thornton found time to sit on Tsinghua’s advisory board even when he was boss of Goldman Sachs. He now teaches a programme at the school, on global leadership.