A dilemma for China’s business schools

The education of managers is an increasing challenge faced by many companies. Today valuable business experiences are shaped primarily by understanding how global and local meet. As a result, business schools strive to deliver culturally diverse approaches to enhance knowledge transfer.

In China, business schools started out training local executives by bringing in western management knowledge and then adapting it to meet local demands. Riding the wave of economic growth has allowed many Chinese business schools to thrive and serve as a meeting place for international and local students. Bringing together a mix of global and local perspectives therefore puts Chinese business schools in an excellent position to add an international dimension to the development of future market designs and business development in China.

However, an interesting trend is currently under way. Local Chinese market dynamics seem to be questioning whether an international curriculum should truly be part of the DNA of Chinese business schools. Recent events would appear to suggest that in a financial and political sense China may not be opening up as fast as the international community desires. Some even argue that the opposite is happening: with the initial success of Chinese businesses, China is favouring its own local approaches and as a result seems to be losing its ‘opening-up’ drive.

For example, Hong Kong fears that the Beijing government will intervene and limit its autonomy which would severely violate the “one country, two systems” idea. At the same time, the special free trade zone in Shanghai faces many legal uncertainties, which has meant that the number of international companies signing up for business relationships is disappointingly low. Finally, and perhaps most importantly, more students than ever are graduating from Chinese universities (7.27m hitting the job market in 2014, compared with 1m in 2000), while economic growth is slowing. In addition, highly educated Chinese people are returning from overseas. As a result, it is becoming harder for Chinese business schools to place their own international students in the Chinese market, unless they speak fluent Mandarin, have local market insight, or are part of the local guanxi networks.

Rather than concentrating on an expansive and international business community, China increasingly appears to be focused inwards on local companies. Any reduction in its international focus is to be regretted because there has never been more cash available in China to spend. Chinese private and public companies, with money in their pockets, are looking for investment opportunities in the west; however, many of these so-called reverse M&As do not run smoothly because there is a lack of insight into managing internationally diverse workforces. International experience and sensitivities are not well developed among Chinese executives, meaning that these takeovers are usually co-ordinated by overseas managers. M&As funded with Chinese money are expected to grow and Chinese managers will have to consider non-financial issues such as cultural differences, workers’ unions, political factors, etc. It is essential that business schools in China remain focused on a curriculum that provides sufficient room for educating their students in ways that promote international management and leadership skills.

Chinese business schools face a dilemma – should they become locally reactive or globally proactive? On one hand, local Chinese comprise the majority of the student body for almost all the leading Chinese business schools and, on graduation, job placement for local Chinese is still much easier than for international graduates in China. As a consequence some schools are making less of an effort to internationalise their curricula and recruit international teaching faculty and students. As a result, the international interaction and experience of the classroom runs the risk of being discounted. Leading business schools in China are already finding it harder to fill their classrooms with international students for their global EMBA classes and even when they do, the trend seems to be that there are not enough international faces in the classroom. At the same time international MBAs in China are encountering difficulties in securing a good job, let alone receiving the ‘expat’s package’. This is making the China MBA experience much less attractive to overseas students.

Taking these factors into consideration, it seems natural for some business schools to make a decision to cut down on their international elements and simply go with the flow. But this should be the least preferred option because the market place is becoming more intertwined globally. It is essential for China’s business schools to take a long-term view, cultivate an international study experience, recruit international teaching faculty and students and diversify their job placement strategies. Any school that is complacently basking in its short-term local success without implementing a future international strategy could well face failure, which could be sooner rather than later.

One solution could be, that while enhancing a diverse and international experience, China’s business schools should also try to encourage their international students with more local engagement, help them to learn Mandarin and to understand the Chinese business culture. This will add value and create internationally savvy talents that meet China’s globalisation needs and therefore help China succeed in its global competitiveness.

David De Cremer is the KPMG chair of management studies at the Judge Business School, University of Cambridge and a visiting professor at China Europe International Business School.

Jess Zhang is the associate director of corporate relations (Asia) at Hult International Business School and formerly centre Manager for Ceibs Centre on China Innovation.