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Future of the MBA in China.

Future of the MBA in China. 

The movement to bring MBA in China into the World Trade Organization generated much discussion about how best to take advantage of this huge and mostly untapped market. To be certain, manufacturers and service providers are developing strategies to exploit this new market opportunity. Although China's entry into the WTO will benefit a wide array of businesses, an overlooked beneficiary will be our nation's business schools.

Future of the MBA in China, MBA, MBA Program,

Many business schools are already benefiting from China's desire to learn about the "Western way" of conducting business. Increasingly, schools from the United States, Europe, Canada, and Australia are offering programs to Chinese students directly or through the Internet. SUNY Buffalo offered the first MBA degree program in Dailian, China in 1984. Several universities have followed with similar programs throughout China. Although all of these programs offer 

courses in China, these institutions are not permitted to grant a degree in China, Instead, students are required to receive their diplomas at the host university's campus. 

In April, 1998 a consortium of Jesuit Universities launched a BiMBA in partnership with Peking University. This development marked the first time that a joint MBA program offered by an American institution was approved by the Chinese government. Students in this program are now able to earn the MBA degree in China. Such programs are a trend that is likely to continue. 

China's appetite for the MBA far exceeds the supply of students. Students can pursue an MBA degree through one of two avenues--national or local. At the national level only 56 Chinese universities have been given permission by the Ministry of Education to offer the MBA degree. Each school is permitted to accept approximately 200 MBA students annually. However, the provincial governments permit institutions within their jurisdiction to also offer MBA degrees that are fully recognized by the local governments. This offers another avenue for students not enrolled in nationally-recognized programs. Because there is no limit in the number of students who can enroll in these provincially recognized programs, the number of students in these programs far outpaced those permitted to pursue degrees in the national program. For example, Chongqing University has about 200 national MBA students and 1200 MBA students recognized by Chongqing City. 
The demand for MBA trained employees is expected to accelerate. Chinese students see the value of an MBA degree, as well. With the supply of students lagging the demand, graduates are commanding impressive salaries. For example, an MBA graduate can earn a salary approximately two-and-one-half times the amount earned without the degree. Moreover, on average an MBA graduate can expect 2.65 job offers at graduation. No wonder students are lining up to enroll in these programs. 

For students pursuing an MBA degree from a U.S. educational program, the benefits can be enormous. According to the Association of MBA, students who graduated from one-year programs received average salary increases of approximately 30 percent. Graduates of two-year programs averaged over 60 percent more income.  Furthermore, they received a three-fold increase in salary over the three year period following graduation.

Comparing the MBAs 

The U.S. MBA program has evolved over the last 40 years. Early in its life, the typical MBA curriculum focused on various business functions. Courses in marketing, management, accounting, and finance made up the bulk of the curriculum. The major emphasis was on skill development. Tools of business were emphasized. This smokestack approach offered the students little opportunity to integrate the various disciplines within the program. Later, a capstone course was introduced to provide students with an integration of the various functional areas. 

Today, business schools emphasize leadership, teamwork, and communication skills along with the traditional areas. There is increased emphasis on the use of information systems as a management tool and conducting business in a global environment. Most important, students are schooled in how to act in an entrepreneurial manner both within large organizations as well as in smaller ones. Many programs offer students the opportunity of studying within the cohort model. Finally, MBA faculty are increasingly tapping corporate America by inviting guest lecturers into the classroom to discuss current real-world situations. 

Another interesting comparison involves the type of students found in the U.S. versus China. In the United States, many MBA programs require work experienced as a requirement for admission. A typical class at a U.S. university will have an array of students from business, industry, and government. Professors often provide examples of the application of business theory. This gives and take by these students provides for some exciting discussions with each student drawing on his or her work experience. 

The students of Chinese universities often lack the market economy (business) experience necessary to relate theory to practice. These students are often forced to apply concepts learned in an MBA program after they enter the workforce. Furthermore, because their professors often lack business experience, they may have difficulty in illustrating how business concepts work in a corporate setting. 

There is another fundamental difference between the two educational systems. In China, faculty members rely heavily on the lecture approach. Thus, in this setting students become passive learners. The end result is that Chinese MBA programs are geared to arriving at the "right solution" to a problem. Little attention is given to developing critical thinking. 

In contrast, students in the U.S. are exposed to a wide variety of instructional approaches. These include the case method, class discussions, student presentations, and role-playing. Students are often prepared for jobs that do not yet exist. Instead of teaching the "right solution" to a problem, the U.S. MBA students are taught "how" to solve problems. Thus, critical thinking is a vital part of the U.S. system of business education. 

Although there is a great amount of money to be made by offering U.S.-style MBA's in China, long-term success will ultimately be dependant on offering unique programs that deal with the issues and problems facing China's businesses in an increasingly information-based and global business environment. Thus, the ideal MBA program must not only reflect the cutting edge curriculum of the West, but also must be adapted to the needs of Chinese businesses. Ultimately, this blend of features will determine which programs will be successful. 

National Entry Requirements 

The competition to attend Chinese MBA programs is fierce. First, students are required to support the existing social order by fully supporting the current political system, being good citizens, exhibiting a good work ethic, and following the law. 

Second, students are required to have a certain amount of work experience depending on their previous academic achievements. Students who earned only an associate degree must have a minimum of five years of work experience. Students who earned an undergraduate or graduate degree are required to have three years and two years of experience, respectively. 

Third, only students who are age 40 or less can apply for admittance into the national program. Fourth, students must pass a physical examination. Finally, the personnel department of the prospective students' employer must furnish written approval for the enrollment. Also, the prospective students must present evidence of accomplishments and, if necessary, detailed explanations of any questionable behavior. 

Students are also required to pass the GRK written examination. This admission exam tests the prospective student's abilities in math, English, management, Chinese language, and logic. In addition, prospective students are required to pass an oral examination. 

A requirement of those admitted into the national program is that they return to their previous employer following graduation. The typical length of the national MBA program is two-and-one-half years full time or three years on a part-time basis.

 The national MBA program specifies nine core courses: 

* Management 

* Managerial Economics 

* Managerial or Applied Statistics 

* Accounting 

* Financial Management 

* Marketing and Sales 

* Operations Management 

* Management Information Systems 

* Strategic Management 

Each of these courses must include a set number of cases. Students are also required to have a minimum of "600 contact hours" of work with their professors. Additional courses are offered to fulfill this requirement. Furthermore, students must complete at least 20 hours of work on a computer per degree program. Finally, students are required to write a thesis at the end of their course of studies. 

Proposed MBA Changes 

Typically, students entering the Chinese MBA program are employed by State Owned Enterprises (SOE). Often these organizations are very large and bureaucratic. Therefore, the students' backgrounds and experiences are quite different from their counterparts in the United States. Although the current curriculum may be appropriate for their present system, many of the refinements made to the U.S. program can be used to help design a more effective Chinese MBA program. 

The starting point in designing a new curriculum is to identify the components of the U.S. MBA that are relevant to China. Functional and communication skills must be a fundamental part of any business curriculum. In addition, critical thinking must become a major part of the Chinese MBA. Students must begin to interact with each other and challenge the concepts and theories presented in the classroom. 

The challenges to future MBA candidates who will work in international business are even greater. Not only are these students required to master the knowledge and skills present in most U.S. MBA programs, but also understand and solve problems that appear in dealing with businesses in other parts of the world. 

The successful MBA graduate will have a fundamental knowledge of both Western and Eastern business practices. An understanding of the cultural, political, and social differences will lead to a more effective decision-making process. This knowledge will lead to more successful outcomes when negotiating with Western business entitles. 

A clearer understanding of the customs, habits, and other cultural differences will enable Chinese business practitioners to make informed decisions. For example, lawyers are a crucial part of conducting business in the West, while less formality is common within the Chinese business community. The reliance on attorneys is quite common in the United States but may breed suspicion in other cultures. 

There are other subtle differences. For example, the Chinese culture emphasizes the avoidance of direct confrontation in many business settings. Westerners may view this lack of assertiveness as a sign of agreement. In truth, the response is a cultural phenomenon. Obviously, the international MBA holder must have a clear understanding of the world in which he or she will be required to function. Here, their knowledge base must go well beyond the traditional business skills set. 

To address these fundamental requirements, China needs to embrace a fresh approach. This will require better-trained professors who are not only well versed in business theory but who are well-schooled in business practices in the international arena. In the near term, this may require the presence of more U.S.-educated professors. These professors must also be provided with sabbaticals and paid leaves of absence to further their exposure and understanding of how corporations function in an international setting. 

In addition, Chinese universities should have active faculty exchange programs. These programs would speed up the modernization process and provide Chinese students with the type of education that is necessary for them to effectively compete in the new economy of the 21st century. 

Many of the problems faced by Chinese businesses are unique to them. Therefore, relying on instructional material developed abroad may not address the everyday problems encountered by local businesspeople. To be sure, legal, regulatory, and governmental challenges faced by Chinese businesspeople may not be solved by cases developed in the West. 

Chinese business schools must begin to develop course material designed to solve problems that are typical to Chinese firms. For example, the capital formation problems faced by Chinese businesses are quite different from those faced by U.S. businesses. In the U.S. there is a well-developed financial system that provides capital to businesses in most situations. The Chinese financial markets are less sophisticated. Thus, there are different avenues available for Chinese businesses to gain capital.
U.S. business schools have benefited from the use of advisory councils. These organizations comprise prominent members of business, industry, and government. Business advisory councils can play a variety of roles to assist the schools in achieving their goals and objectives. For example, councils can advise the faculty on curriculum issues, help provide financial resources and assist in outreach activities. 

These councils may be extremely useful to Chinese universities. Given the need for better-trained professors, a business advisory council may prove useful in securing corporate guest lecturers and providing internship programs for students. The advisory council may also be called on to place faculty members in corporate positions to provide a better understanding of business practices. As in the case of U.S. advisory councils, the organizations might prove quite useful in securing additional funds for program development and scholarships. 

Looking Ahead 

The inclusion of China as part of the World Trade Organization will provide new opportunities to a wide variety of entities involved in foreign commerce. Given the business educational needs of China, this bodes well for U.S. business schools. Although China is beginning to gear up for large-scale business education, its U.S. counterparts have a significant lead in developing business programs that are at the cutting edge. The most important beneficiary of the new open trade policy will be the MBA degree.

It is important that business education in China not only reflect the traditional curriculum of U.S. business schools, but it must also be expanded to include a curriculum that reflects the business issues and practices that are unique to China. Thus, the future Chinese MBA curriculum will likely include a blend of functional areas integrated with topics dealing with problems faced by local businesses. In the long run, Chinese business schools must develop their own curriculum incorporating issues that are unique to them. 

This new focus should not only concern itself with what is taught but also how the curriculum is taught. The focus must shift from finding the "correct solution" to problems to helping students begin to think critically. This process requires a fundamental change from the lecture format to one that is more conducive to student learning. 

Chinese universities must borrow concepts from the West and mix them with the best business practices of the East. This blending process will ensure that the Chinese MBA curriculum will continue to evolve so students are not only capable of addressing current challenges, but new challenges that will surface in the future. 

Another area that will spill over into the business curriculum is the issue of corporate governance. Typically, Chinese businesses have a small, closed approach to corporate boards. The Chinese business community would be well served by increasing the size and diversity of its corporate boards. The introduction of outside board members will facilitate the development of Western management approaches. An outside perspective will be highly beneficial to the Firms. 

G. Timothy Haight, D.B.A., is dean of the College of Business and Economics at California State University, Los Angeles. He is an expert in the field of financial management, investment and securities analysis. He is the general editor of Insurer's Guide to Enterprise-wide Management and also the Derivatives Risk Management Service. Dean Haight's articles are frequently found in numerous journals and he is the author of The Analysis of Portfolio Management Performance: An Institutional Guide to Assessing and Analyzing Pension Fund, Endowment, Foundation, and Trust Investment Performance. He has made numerous visits to China in the course of his interest in offering high-level management training programs to Chinese government officials. 

Kwok Keung (Kern) Kwong, Ph.D., is a professor of management in the College of Business and Economics at California State University, Los Angeles. He is also director of the highly successful Asian Pacific Business Institute housed in the College. The institute stages year-round management training certificate programs for Chinese government officials and executives. The institute was established in 1995 and provides a wide range of expertise, services, and information to serve audiences that includes students, faculty, scholars, professionals, and the local business community. 

(1.) "Peking University BiMBA," Chinese Daily News, August 25, 2000. 

(2.) Silcoff, Sean, "Expensive, But Worth It," Canadian Business, October 29, 1999. 

(3.) Asiaweek, "Asia's Best MBA Schools--Masters of E-Commerce," cover story, May 5, 2000. 

Taylor, Michael, "U.S. Survey Shows it Pays to Quit Working and Go Back to Classes," South China Morning Post, February 19, 2000. 

(4.) Quacquarelli, Nunzio, "Corporates Seek Chinese MBAs," South China Morning Post, July 8, 2000. 

Dugan, Mary K., Grady, William R., Payn, Betsy, and Johnson, Terry R., "The Benefits of an MBA: A Comparison of Graduates and Non-graduates," Selections, Winter 1999. 

(5.) Cha, Theresa, "Le Moyne Helps Chinese MBA Program: A Chinese-U.S. Education Alliance Aims to Produce Managers to Guide an Emerging Economy," The Post-Standard, August 11,1998. 

(6.) MBA Program Regulations of Chong Qing Business Management School, Chong Qing Business Management School, 1999, P.R. China. MBA Program Basic Requirement of Chong Qing, loc. cit. 

MBA Program Basic Requirement of the University Educational System, Chong Qing Business Management School, 1999, P., R. China. 

(7.) Nei, Gun, "Degrees Promote Economic Expansion," China Daily, August 14, 2000

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