The importance of having a presence in China

Unless you’ve been  living in a cave, it’s  been hard not to notice  that China is on its  way to becoming the  world’s top economic superpower. This  means Western companies have been  queuing up to take advantage of the new  markets it offers, with varying degrees of  success. Business schools have also been  eager to get involved, either by educating  China’s next generation of managers and  professionals or by teaching overseas  students how to deal with the opportunities  its rapid development presents.

However, China is moving faster than  anyone could have predicted just a few years  ago, throwing up a new set of challenges  to Western organisations and the business  schools that seek to guide them. “The first  phase of change, dominated by international  corporations, may already have come to an  end,” says James Darlington, who heads the  Chinese operations of recruitment specialist  Antal, which has been working in the country  for more than a decade. “What we’re  now seeing is a whole raft of successful  companies founded and built by local  entrepreneurs. And their ambitions aren’t  restricted to domestic markets – they want to get out onto the global stage. For Westerners it’s no  longer just a question of working out how to come to  China, but how to deal with China coming to you.”

Many of the higher-ranked MBA programmes use  case studies looking at the Chinese experience and seek  to bring the country’s culture and business methods to  their classrooms through the recruitment of Chinese  students. However, a growing number of schools are  taking the view that the only way to understand how  Chinese business works, on its doorstep or yours, is to  embrace the dragon as closely as possible. And that  means studying in China itself.

The first to put this approach into practice was the  China Europe International Business School (CEIBS)  in Shanghai. Set up in 1994 with the support of the  European Foundation for Management Development,  it has one of the highest-rated MBA  programmes on the Pacific Rim and attracts  nearly half of the MBA student body from  outside China. It’s been followed by other  West-East partnerships such as the Beijing  International MBA programme (BiMBA)  between Belgium’s Vlerick Leuven Gent  and Peking University. But while CEIBS  and BiMBA are success stories, other  institutions have found China every bit as  difficult as their students and corporate  clients. US schools Fordham and the  University of Maryland, for example, entered  the market with some fanfare only to exit

in a relatively short space of time. “There  are a lot of difficulties inherent in making  a partnership between two very different  cultures work,” says Vlerick’s Bruce Stening.  “You have to choose your partner very  carefully, be prepared to negotiate on points  of difference and make sure that the calibre  of teaching is consistent across the board.”

Other schools argue that the most  effective place to learn how Chinese  business works, on its home turf and  internationally, is at the meeting point  between traditional capitalism and the Hong  Kong version. The OneMBA, an executive  MBA programme run by a partnership of five  top schools –CUHK in Hong Kong, EGADE in  Mexico, RSM in the Netherlands, Kenan-  Flagler in the US and FGV in Brazil – uses the  city as one of its ‘global residencies’ where  the local faculty and students provide an  insider’s view of both the immediate and  mainland business environments. For John  Buglass, a business strategy consultant at  Shell Global and 2007 OneMBA graduate,  the programme offered an opportunity  to face real-world challenges, such as  managing cultural differences, in the Asian  market. “From my Asian teammates, I  learned that a company such as FedEx has a  totally different operating environment and  business model in that part of the world,” he  says. “The programme brought to life how  a global company has to adapt its business  model to local business environments.”

For international business schools,  however, the next big opportunity may not  be in preparing Westerners to deal with  China, but in readying Chinese professionals  in how to exploit new markets in the West.  “Despite their commercial success and  fast growth, Chinese businesses are still at  a relatively early stage of development,”  says Haico Ebbers of the Europe China  Institute at Nyenrode in the Netherlands.  “The challenge is therefore how to get their  middle managers to adopt strategic thinking  as the norm. There is still a prevailing  attitude that one can deal with a problem  when it arises rather than looking for ways  to stop it happening in the first place.”

For Vlerick’s Stening, it’s the soft skills  of Chinese managers and professionals  that business schools need to address  most urgently. “A lot of Chinese companies  operating overseas still use local managers  because they know they don’t have the  experience of leading and motivating  outside their own culture. And this is where  business schools can play a major part in  China’s foreign development, by equipping  Chinese managers with the tools they need  to manage businesses and the people who  make them work in the West.”