China’s previous management-education system was a casualty of the Cultural Revolution, but the country has built an impressive network of business schools since MBA degrees were re-introduced in 1991. The number of managers being graduated is still far below what China needs to support economic growth, however, and program quality needs further improvement. Continued progress will require maintaining partnerships with foreign schools, developing faculty, improving curriculum, and expanding research capability.
China did not resume management-education programs until 1979, after abolishing them during the Cultural Revolution. Another twelve years passed before it introduced MBA degrees 工商管理硕士 at nine schools in 1991, which at that time accepted fewer than one hundred students (Li 2007). Since then, however, China has been able to increase both the scale and quality of its management-education system exponentially by applying its economic-growth strategy to postsecondary education. This model is based on duplicating foreign systems, adapting and institutionalizing them, and then improving them. Twenty years later, China has completed the first step successfully and is working on step two. In the coming decades China will begin the arduous process of trying to improve on the US and European models of management education.
Demand for business education in China is driven by three factors: general demand for education at the basic and advanced levels; government policies that have allowed for experimentation in program design—resulting in international schools, joint ventures, executive MBA (EMBA 高级管理人员工商管理硕士) programs, part-time studies, etc.—and rapid economic growth (Cremer 2009). The goal of high economic growth in particular has challenged China to develop a system of management education.
The growth of Chinese companies has been outpacing the growth of management education, however, which has led to weakness in the managerial ranks. In 2006 McKinsey & Company, a global management-consulting firm, estimated that China would need seventy thousand new top-level executives with global experience by 2010 (Lavelle and Rutledge 2006). To meet this demand China graduated nearly twenty thousand MBAs in 2007 (Li 2007); enrollment now is hitting forty-five thousand, but that is still short of the target (Sridhar and Sridhar 2009). China is predicted to have one hundred of the world’s five hundred largest companies by 2025 (up from fewer than forty currently), and foreign firms will continue to expand their Chinese operations, so there is no reason to believe that demand for management training will slow down in the foreseeable future (Gupta and Wang 2009). In fact, a greater proportion of Chinese students are opting to complete their MBAs in China rather than abroad, given the increase in available spaces for MBA students and the very favorable outlook for the Chinese economy.
Challenges and Successes
China faced significant challenges when it decided to develop its management-education system: too few instructors, and a lack of teaching materials and existing education models. In the mid-1980s, the Canadian International Development Agency began to pair Canadian management schools with major Chinese universities in order to develop MBA programs in China, and initially the classes were taught in English by Canadian faculty (Cremer 2008). Bernard Wolf of York University, for example, taught at Nankai University in Tianjin in 1990. The effort was a very successful aid venture that proved extremely cost-effective. (As the saying goes, “Give a man a fish, feed him for a day; teach a man to fish, feed him for a lifetime.”) This initial stage of re-establishing a management-education system relied on partnerships with other foreign schools as well, most of which were in the US. Together these schools brought world-class Western teaching methods to China—but while these collaborative programs had a competitive edge over other domestic programs, the programs were still limited by the lack of a Chinese perspective (Cremer 2008).
Since 2003, there has been a greater emphasis on developing curriculum and teaching methods that leverage the unique cultural understanding of Chinese students to help them to achieve success in the Chinese market. The way to design, manufacture, package, distribute, and sell a product successfully in China is different from how these things are done in the US or Europe, and because of this Western business cases (a key element of many Western business programs) are inadequate for China. The evolution in management education has been aided by the return of so-called sea turtles (hǎiguī 海龟) —Chinese graduates and faculty that went overseas to pursue professional and academic careers (Cremer 2008). Although teaching methods have evolved, however, roughly one-fifth of China’s MBA and EMBA programs still operate in partnership with foreign schools (Cremer 2008).
As Chinese business programs have grown and matured, they have also improved greatly in quality. In 2003 there were two Chinese business schools ranked on the Financial Times top-hundred MBA list (one was ranked fifty-ninth and the other ninetieth) (Cremer 2009). Four schools in China made the list in 2010, including the China Europe International Business School (CEIBS) in twenty-second place (Global MBA Rankings 2010). In 2009 CEIBS was ranked eighth (Global MBA Rankings 2009), and in 2011 it placed seventeenth with a three-year average of sixteenthplace(Global MBA Rankings 2011). Many Chinese schools have achieved international accreditation as well, either from AACSB International in the US (the Association to Advance Collegiate Schools of Business), EQUIS of EFMD in Europe (the European Quality Improvement System of the European Foundation for Management Development), or the AMBA in Britain (Association of MBAs). These schools include CEIBS, Peking University’s Guanghua School of Management, Tsinghua University’s School of Economics and Management, Fudan University, Shanghai Jiaotong University’s Antai College of Economics and Management, and the Zhejiang University School of Management (Cremer 2009). The two leading management schools in Beijing are Guanghua School of Management, which has more of a social-science orientation, and Tsinghua University, whose focus tends toward science and technology. Both of these schools prepare their MBA students for placement in domestic Chinese firms, state-owned companies, and multinational enterprises (MNEs) operating in China. In contrast, proportionately more graduates from Shanghai-based CEIBS go to work for foreign-based MNEs.
Management education in China faces significant challenges—some internal to Chinese business schools, some external—which threaten to derail or delay continued improvement. Internally, the quality of instruction is a serious issue: faculty still lack the experience of their peers in Western countries (Gupta and Wang 2009), and teacher training is a much slower process than doing the physical work of erecting university campuses (where twenty-four hour, round-the-clock construction is often the norm). The limited number of qualified faculty has led to problems developing doctoral programs, improving curriculum, and publishing research papers (Li 2007). There is also a lack of expertise in emerging subject areas such as corporate governance, social responsibility, and sustainability. Art Kraft of AACSB comments that “Chinese business schools tend to grow out of economics and mathematics, in which they have established a high reputation. There is nothing wrong with that. But they need to expand into other disciplines such as marketing, management, accounting, and finance” (Li 2007). Creating a more robust system that can improve quality internally and cover the full spectrum of management disciplines is crucial to China’s achieving its goal of management education commensurate with that of developed countries.
There are also problems with inconsistent quality, and low student and employer satisfaction. Outside the top-tier schools, Chinese business schools have many poorly trained faculty who teach in Mandarin and still rely heavily on foreign cases (Lavelle and Rutledge 2006). In 2006, Business Week characterized many schools as “diploma mills” (Lavelle and Rutledge 2006). This has increased competition for places at the top institutions, which proportionally have become as selective as the top US schools (Lavelle and Rutledge 2006). The fact that students can apply to only one program at a time has intensified the competition among prospective students, since candidates who are rejected lose at least a year before they’re able to start their degrees (Lavelle and Rutledge 2006).
Externally, foreign-education partners are being squeezed out of the system by government regulation. Beginning in the late 1990s, numerous foreign schools entered the Chinese education market hoping to tap the perceived demand for top-tier education. Government regulation drags out the approval process required for each new class of students, however, while investment rules drain profits (Damast 2008). The Cass Business School in London is one of many foreign schools that have closed their Chinese operations.
Demand for top-tier Western programs in China has also been lower than analysts have predicted. While general demand for higher education has never been stronger, demand for English-language education at $50,000 per year has been weak. Companies are hesitant to pay that much money to educate an employee who easily could leave, and individuals rarely can afford the tuition on their own. Moreover, few Chinese have sufficient mastery of the English language to take graduate-level courses taught in English (Damast 2008). Even internationally top-ranked CEIBS has closed its Beijing campus to focus on its Shanghai program. Ultimately, though, more Chinese students should have mastery of English in the future, which will allow for more English-language instruction, or at least for more English-language teaching materials.
A Look to the Future
The success of Chinese management education depends on developing more top schools, transforming at least some of these schools into globally elite institutions, and strengthening the remaining middle tier. In the process, domestic research capability will be enhanced and a greater number of qualified instructors will emerge (Cremer 2008). Without this, China will continue to have a few strong programs, but will struggle to develop a management-education system with adequate programming that is accessible to its vast population and appropriate for the Chinese business environment.
Relationships with foreign schools are important to this process, but these must move beyond simple mentoring and become more collaborative. This evolution is already taking place, as the changing relationship between faculty at MIT and Fudan University shows. The partnership began with MIT faculty mentoring Fudan instructors. As Fudan’s faculty has developed and matured, however, their former mentors at MIT have come to appreciate their wealth of knowledge with, and experience in, the Chinese marketplace (Learning Curve 2005). Future collaboration on research is now likely, which will enrich not only Western knowledge of China, but also the Chinese faculty’s understanding of Western research methods. Another example is Peking University’s Guanghua School of Management, which has eighty partner schools, some of which are the most prestigious in the world.
As China continues to move toward being the world’s largest economy—having recently acquired the number-two spot—it has the potential to reshape not only the global economy, but also global management education. If Chinese faculty begin to publish more research and curriculum materials, Western schools increasingly will use them to teach American and European students. The process will be similar to the evolution of the manufacturing sector, wherein China copied the West at first and displaced much of it afterwards. While the massive shift in manufacturing that took place will never be replicated entirely in education, some kind of shift is likely, if not inevitable.
The Chinese government is aware of the need to continue to focus on building world-class business programs in order to achieve a highly trained, flexible cadre of managers. The development of PhD programs, academic research, and a high quality of teaching at both the graduate and undergraduate levels is particularly important. Western schools should collaborate as much as possible with Chinese faculty on research and in other areas that will help Chinese students do business in China successfully, and aid emerging Chinese MNEs in operating more effectively abroad. Such partnerships will deepen the West’s understanding of China at the same time.
Cremer, Rolf D. (2008). Regional expertise is a priority. Financial Times. Retrieved February 29, 2012, from http://www.ft.com/cms/s/0/ef10c016-cd41-11dc-9b2b-000077b07658.html
Cremer, Rolf D. (2009). China’s schools in ascendancy. Financial Times. Retrieved February 29, 2012, from http://www.ft.com/cms/s/2/5f0e198c-f9eb-11dd-9daa-000077b07658.html
Damast, Alison. (2008). China: Why western b-schools are leaving. BusinessWeek, Retrieved February 29, 2012, from http://www.businessweek.com/magazine/content/08_21/b4085056706207.htm
Global MBA rankings (2009). Financial Times. Retrieved February 29, 2012, from http://rankings.ft.com/businessschoolrankings/global-mba-rankings-2009
Global MBA rankings (2010). Financial Times. Retrieved February 29, 2012, from http://rankings.ft.com/businessschoolrankings/global-mba-rankings-2010
Global MBA rankings (2011). Financial Times. Retrieved February 29, 2012, from http://rankings.ft.com/businessschoolrankings/global-mba-rankings-2011
Global MBA rankings (2012). Financial Times. Retrieved February 29, 2012, from http://rankings.ft.com/businessschoolrankings/global-mba-rankings-2012
Gupta, Anil K., & Wang Haiyan. (2009). The odds favor business schools in China and India. Business Week. Retrieved February 29, 2012, from http://www.businessweek.com/globalbiz/content/may2009/gb2009057_658055.htm
Lavelle, Louis, & Rutledge, Susann. (2006). China’s B-school boom. Business Week. Retrieved February 29, 2012, from http://www.businessweek.com/magazine/content/06_02/b3966074.htm
Learning curve. (2005, December 6). Business Week. Retrieved February 29, 2012, from http://www.businessweek.com/bschools/content/dec2005/bs2005126_3538.htm
Li Ziming. (2007). China: Institutions seek a competitive edge. Financial Times. Retrieved February 29, 2012, from http://www.ft.com/cms/s/2/31cbd7f0-ad5a-11db-8709-0000779e2340.html
Sridhar, V., & Sridhar, Kala Seetharam. (2009). Education: India must learn from China. Rediff.com. Retrieved February 29, 2012, from http://business.rediff.com/column/2009/jun/01/guest-india-must-learn-from-china.htm
Source: Wolf, Bernard M., & Lof, Rudi M. (2012). Management Education. In Zha Qiang (Ed.), Education in China: Educational history, models, and initiatives. Great Barrington, MA: Berkshire Publishing.