Meeting China's Need for Management Education

Sean Silverthorne

Locations Visited: Shanghai, Beijing, Taipei, Hong Kong, and Singapore

Date: March and May, 2006

Purpose: Assess the progress of eighteen business schools in Harvard Business School's Program on Case Method and Participant-Centered Learning, which provides guidance and support regarding best practices in management education. "Overall, we were delighted to see the impact that PCMPCL is having in the area and on these leading schools of business," Wheelwright says.

Q: What general advice would you give our readers who either do business in China or are considering new business there? What should they watch out for? What opportunities are ripe for exploration?

A: In all areas of greater China, understanding the local systems, the role of government regulation, and the behavior of suppliers, customers, and competitors is essential. No wonder most of the successful global firms have chosen to hire people with local experience and to often partner with a variety of key local firms. In PCMPCL, one of our reasons for choosing the top eighteen universities as our target audience is the belief that over time, they have proven themselves to be the leaders and to have the capabilities to adapt, making them ideal partners for HBS and Harvard Business School Publishing (HBSP).

Furthermore, for institutions like HBS and HBSP, one of the major worries about engaging in activities in this part of the world is protecting intellectual property, given the track record of some of those areas. However, our experience has been that by working at both the institutional level (with universities and ministries of education) and with individual faculty and their deans and leaders we have been able to build strong respect for the school's intellectual property.

Q: As a frequent visitor to Asia, what can you tell us in general about what you are seeing there in terms of current business management trends?

A: While each of the areas of greater China (Hong Kong, Singapore, Taiwan, and China) has its own distinctive characteristics, there are also some general trends that apply across the region. Let me just highlight a handful of those:

1. Demand for management and management education is growing rapidly. Management (and business) is seen as a major force for change, growth, and prosperity. All of these areas look to the United States and leading institutions like us as the "experts" in this field.
2. While full-time MBA programs are growing, the greatest growth is in executive MBA programs (part-time) and in Executive Education. Particularly in China, much of the current generation of senior management has never had any formal training.
3. Competition is definitely growing more intense as companies and government agencies strive to become truly "global" players. While much of the past growth and business success might have been based on national and regional success, they recognize the need to become true global players if they are to continue to grow and prosper.
4. Manufacturing sectors in Hong Kong, Taiwan, and Singapore face the pressing problem of lower wage competition from plants in China. Thus many of those regions' manufacturing firms are relocating their factories and much of their production to China in order to remain competitive.
5. Companies are sufficiently convinced of their need for much more training of their managers, and their respect for their leading universities is such that they are very willing to pay market rates for their executives to attend programs taught at those universities.

Q: What are the locals there talking about in terms of business management, opportunities, etc. What's the buzz?

A: Throughout the greater China region, the themes heard repeatedly are those of entrepreneurship, globalization, and competitiveness. They see significant opportunity for those willing to take risks and anxious to have an impact in a wide range of industries.

Q: How has this area changed over the years since your first visit?

A: While Taiwan, Singapore, and Hong Kong have always had a strong bias for entrepreneurship and global competitiveness (albeit evolving to match globalization and technology changes), the great change in recent years has been in China itself. The state-owned enterprises have realized the realities of competition and the need to improve costs and quality significantly.

Furthermore, the government has allowed multiple systems to develop so that privately owned enterprises compete side by side with state-owned enterprises.

Also, management education, which was banned as a topic of study during much of the past fifty years in China, has become over the past decade not only accepted but sought after. The result is a dramatic change in the economic and industry departments of leading Chinese universities, such that they now increasingly are becoming strong schools of management with a desire to become recognized internationally both for their research and for their teaching.

Executive Summary

• Local knowledge and contacts are essential for foreign firms doing business in China.
• Chinese agencies and companies recognize the importance of becoming global players, and they're taking steps to increase China's competitiveness on the international stage.
• China lacks a tradition of strong business management education but recognizes the need to nurture managerial talent for the future.

Steven Wheelwright is a Baker Foundation Professor at Harvard Business School.