Rush on talent FOCUS. Business Education. Opportunities abound for MBA-holders in China. Q&A Dr Janet De Silva, Richard Ivey School of Business

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1 July 2012 Vol. 23, No. 7 FOCUS Column john van fleet on innovation in mba education Business Education Q&A Dr Janet De Silva, Richard Ivey School of Business Rush on talent Opportunities abound for MBA-holders in China

2 The Ivey Executive MBA Think differently. Learn differently. With Ivey s 100% case study method, I could apply what I learned immediately. By the end of 18 months I d worked through a huge range of business scenarios and could confidently lead my family s business in a new strategic direction. Aries Ng EMBA 2011 Director WEW Electricity & Metal Works Ltd. Arrange a class visit today ivey.com.hk/explore Join our 2012 class this August Registration no It is a matter of discretion for individual employers to recognize any qualifications to which this course may lead.

3 CONTENTS 12 Business education in China keeps growing STUDYING HARD: Students listening to a lecture at the China Europe International Business School 6 NEWS BRIEFS Latest news on business education 8 8 REPORT: RUSH ON TALENT Opportunities abound for MBA-holders in China 12 COLUMN Business schools are shifting their focus from west to east, writes Richard Burns 15 COLUMN John Van Fleet on dual-degree programs in China Q&A: JANET DE SILVA Ivey Asia s Dean on case teaching in MBA programs China Economic Review July

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5 CONTENTS F O C U S Published monthly since 1990 Publisher China Economic Review Publishing Editor Jade Zhu Contributors Richard Burns, John Van Fleet, Alexander Folkenflik Research Manager Ada Liu Researchers 20 STUDY IN SINGAPORE Juliet Zhu, Stella Xie Art Director Frank Zheng Designer Jennifer Zhang Editor at Large Graham Earnshaw Associate Publisher Gareth Powell Director of Sales Obie Gao CER FOCUS This is the 69th in a series of special reports in CHINA ECONOMIC REVIEW. Future Focus subjects are: Logistics August 2012 Executive Travel September 2012 Residential Real Estate October STUDY IN SINGAPORE Why the Lion City attracts business talent and world-class MBA programs 24 SCHOOL PROFILES: ASIA PACIFIC Showcasing renowned business schools in the region 26 STUDENT PROFILES Interviews with MBA graduates 28 MBA PROGRAMS Comparing schools in China and abroad 30 Q&A: JENNIFER MARTIN Hult s Executive Director of Asia talks about social media in business education Advertiser index Richard Ivey School of Business inside front Peugeot Open Europe China 4 Robert H. Smith School of Business 7 SDA Bocconi University 9 Tsinghua SEM-IFM-HEC Paris 11 ISCTE Business School 17 European University 19 Nanyang Business School 21 QS MBA Tour 23 BSL Lausanne 25 Athens University of Economics & Business inside back KLM China outside back China Economic Review July

6 news briefs News briefs Imagine China SUNY to expand business education programs into China State University of New York (SUNY) is the latest school to join the recently growing pool of schools that are expanding their business education programs into China. SUNY Chancellor Nancy L Zimpher recently signed a Memorandum of Understanding with the Jiangsu Development and Reform Commission to establish an executive education program for service industry executives from the region. According to the university s website, Jiangsu Province-based executives can enroll in programs on campuses in New York State, which will in turn give New York businesses access to representatives from the Chinese region s expanding service sector. New GMAT test will require more work from test takers The Graduate Management Admissions Council (GMAC) will introduce an advanced Graduate Management Admission Test (GMAT) test in July 2012 that necessitates more preparation and study from test takers. All three sections of the current GMAT will undergo changes, which include the replacement of one of two essay questions by an integrative reasoning test. Andrew Mitchell, director of pre-business programs at Kaplan Test Prep, said the majority of business schools are in favor of the new GMAT. Dual-degree program launched in Shanghai The Fletcher School of Law and Diplomacy at Bostonbased Tufts University and the China Europe International Business School (CEIBS) in Shanghai are launching a dualdegree program in business and diplomacy to give Chinese MBA students opportunities to add international affairs studies to their international business classes. The two schools currently offer a one-semester exchange program but under the new agreement, MBA candidates will spend 12 months at CEIBS Shanghai campus and three semesters at Fletcher s Boston location. Students graduate with an MA in Law and Diplomacy from Tufts and a MBA from CEIBS in two and a half years. Survey shows MBA hiring on the rise The latest survey from the Graduate Management Admissions Council (GMAC), which administers the GMAT test, showed that 79% of companies that participated in the 2012 corporate recruiter survey said they plan to hire recent MBA graduates this year, compared with 72% in The average number of new hires is also expected to rise from 13 to 17 this year. Though hiring in Europe will remain flat, companies in the Asia-Pacific region and the US generally expect continued hiring growth in 2012 for MBA-holders. Smaller companies are more likely to see the largest increases in new employees, said Dave Wilson, president of GMAC. 6 China Economic Review July 2012

7 University of International Business and Economics

8 Report Rush on talent Rising MBA hiring and talent shortages in China coincides in fortuitous timing for business school graduates China has shortages of all kinds food, water, natural resources but in a country of 1.3 billion, one wouldn t think that people would ever be a scarcity. Though it may seem that labor is an asset China possesses in abundance, companies expanding in the mainland frequently face scarcity of qualified managerial staff. As a result, both hiring of business school graduates and attendance in Master s of Business Administration courses have been rising in China in recent years. According to the annual 2012 Corporate Recruiter s Survey done by the Graduate Management Admission Council, 79% of surveyed companies planned to hire MBA graduates, up from 72% in Not since China s reform and opening has the hiring environment and opportunity for investing in business education been as prime. It has become much more attractive to hire professionals who have business education, said Sarah Jones, head of operations for Antal International Asia, an international recruitment agency. When you look for a skill set that employers seek, they are generally looking at the same skills an MBA develops. Imagine China Congested talent flow Just as China s economic growth drives demand for raw materials and infrastructure, it has also increased the need for business leaders with China experience. Whereas jobseekers holding postgraduate degrees with years of business experience still face tough competition for the best jobs in developed economies, China s executive and management talent find themselves spoiled with opportunities thanks to fewer MBAs and higher growth. The demand for qualified managers cuts across nearly all industries. The automobile industry is an example of a growth sector with high investment rates and returns nationwide sales were up 22.6% year on year in May but lacks business leaders to push expansion into second- and third-tier cities. Likewise, the financial industry is undergoing the same problem. In 2011, the total workforce in Shanghai s financial sector was roughly 300,000, up from 200,000 in But in a city whose popu- 8 China Economic Review July 2012

9 Report lation has soared past 23 million this year, 300,000 remains only 2% of the Chinese financial center s working population. By contrast, 10% of New York City s workforce is employed in finance. But those tilling the managerial ranks in China must meet very different requirements from those in the West. As the previous head of Sun Life Financial s businesses in China and Hong Kong, Dr. Janet De Silva, dean of the Richard Ivey School of Business in Hong Kong, contrasted her experience leading an Asian business model with that of her western colleagues. Colleagues in Canada were surprised by a business plan that required adding 3,000 workers over three years, she said. How quickly a company can grow is a deciding factor of its competitiveness in China. Employers also place a high premium on familiarity with both Chinese and western business culture. MBA graduates looking for jobs in China face a steep learning curve, said Yvonne Li, MBA director of admissions and career services at the China Europe International Business School (CEIBS) in Shanghai. [While] professional standards and business practices are becomingly increasingly internationalized, the cultural differences and local mindset present a real challenge for those with limited or no work experience in mainland China. Understanding China s business environment is critical for western managers. Rising to meet demand Universities have noticed and responded to these human resource demands to bridge the cultural divide in business culture. China now hosts dualdegree and joint programs as well as growing numbers of Chinese-language curriculums. Quality of instruction has risen as well: CEIBS placed 24th in the Financial Times Global MBA rankings in Increasing numbers of exchange programs also send business students to partner campuses around the world in the US, Spain, France, the UK, Singapore and other developed countries. But the need for MBAs still far outweighs the current capabilities on the market. John Quelch, vicepresident of CEIBS, said the Chinese economy can absorb 600,000 MBA graduates each year, equating to a need of 2,000 higher education institutions to offer MBA programs. In 2011, only 236 MBA programs were running in China (up from six in 1991). The benefits gained by MBA-holders are significant. Angela Li, previously a marketing manager who graduated from the University of Southern California s Marshall School of Business with a Global China Economic Review July

10 Report Executive MBA in 2009, attributes her ability to understand her American counterparts decisionmaking processes to her MBA training. My barrier in my previous position was how to understand different cultures and their business practices, and how this affects their strategies. So the MBA program enabled me to think from different perspectives. To think from the US stakeholders perspectives and find the triggers to persuade them to be more localized, she said. Employers also view MBA graduates more favorably than job candidates without a business degree. Employers like to hire Executive MBA and MBA graduates because frankly, it shows these employees have a plan, said Sarah Jones of Antal. The degree also gives the employer a sense of value from the candidates because they have [undergone] a crash course on global vision, strategic thinking, sound communication, coordination skills and executive power. Increasingly MBA-focused But lack of a MBA degree is still not a dealbreaker for most HR departments. Many job posts still say MBA preferred, rather than MBA required. But the trend towards recruiting MBA candidates with China-based experience and Chinese language skills will continue as long as the Chinese economy keeps growing. Business school degrees will continue to increase in value to companies and job seekers. Employers like to hire Executive MBA and MBA graduates because frankly, it shows these employees have a plan. The degree also gives the employer a sense of value from the candidates because they have [undergone] a crash course on global vision, strategic thinking, sound communication, coordination skills and executive power -SARAH JONES, Antal International MBA programs are not small investments. Tuition for an 18-month MBA program at CEIBS runs at US$56,800 for international students in 2012, or about US$53,000 for Chinese participants. But with top business school graduates recording over 100% increases in their salaries post-mba, both Chinese and foreign job seekers will find that there is no better time to invest in their careers. Imagine China 10 China Economic Review July 2012

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12 Column richard burns Rising in the East: Chinese business education As global economic gravity continues to shift east, a rising tide of business schools are responding to student and employer demands. Richard Burns, head of digital content at QS Quacquarelli Symonds, discusses recent global MBA trends. As the largest global economy in the world, the US is and will continue to be a dominant player in business education for the foreseeable future. Western Europe, though currently experiencing significant economic turbulence, is also unlikely to lose its appeal around the world as an international MBA study destination. However, a gradual but significant trend in global business education over the past decade has been the rise of MBA study destinations outside of the traditional hubs of North America and western Europe. Most notably, top business schools in China and India have witnessed greater international recognition of their MBA programs. Rising prestige Sharon Bamford, chief executive of the UK-based global MBA accrediting body, the Association of MBAs (AMBA), pointed out two key indicators that show the rise in prominence. As the world of business becomes more global we are also seeing the increased globalization of business education... The Association of MBAs accreditation has grown in China and Hong Kong from one school in 2005 to 14 schools in Bamford went on to say that accreditation as well as rankings have served as markers of quality and competitiveness for some schools in India, and especially those in China and Hong Kong. Since 2004, the number of growth-market business schools listed on the Financial Times Global MBA Rankings top 100 have nearly tripled, from six in that year to 17 in China and Hong Kong represent six (35%) of these listed schools. Among MBA employers, the importance of business schools in China and Hong Kong has not been neglected. In QS Quacquarelli Symonds Global 200 Business Schools Report, an MBA rating based on the perceived graduate employability by global organizations, eight business schools from China and Hong Kong have consistently appeared in the ranking for the past three years, six of which regularly feature in the top 20 of the Asia-Pacific ratings. 12 China Economic Review July 2012

13 Column richard burns Of course, much of the increase in the global importance of China and Hong Kong based MBA programs is a result of the ongoing global economic shift from west to east. Business school applicants look to gain a competitive edge by applying for a China-based MBA program, while global MBA recruiters with ever-growing Chinese business interests increasingly value MBAs with a local business knowledge of the world s next economic superpower. Shifting demand But at the same time, in recognition of the need for future management talent with international and local Chinese business knowledge, schools have invested in perfecting existing programs and bringing new educational offerings to the table. IESE Business School in Spain continues to be involved heavily in Chinese business education by taking a lead role in the establishment of one of China s top ranked institutions, China Europe International Business School (CEIBS). Imagine China Professor Franz Heukam, secretary general at IESE, is responsible for the Spanish school s international relations in Asia. He explained that compared to many internationally renowned business schools, those in China have a much shorter history which challenges their appeal on an international scale. Business schools in China and India have a shorter track record and are less well known than many schools in Europe and the US. However, more and more excellent schools emerge in Asia and this trend, combined with the continuous increase in economic significance of Asia, makes business schools in Asia an attractive destination, especially for graduates job-searching there. AMBA s Bamford said some of the top business education offerings in Asia will soon be considered on par with those in the West: About a dozen business schools in the US and Europe are still considered more prestigious, but the top schools in Singapore, Hong Kong, China and India are closing the gap. I predict this gap will disappear China Economic Review July

14 column richard burns altogether in five to seven years. New business school leaders? Among Chinese MBA applicants, anecdotal evidence suggests that the traditional appeal of US and European MBA programs are increasingly being challenged by Chinese alternatives. In earlier years, overseas study options also brought attractive job opportunities to these students, explained Lydia J. Price, associate dean and MBA director at CEIBS. That is less true today, as the western economies continue to struggle with growth. At CEIBS we get many applications from Chinese students who went abroad as undergraduate students but now see greater opportunities for job growth and job acceleration in China. We fully expect that trend to continue. The Graduate Management Admission Council (GMAC) organizes the Graduate Management Admission Test (GMAT), the mostly widely used MBA admissions test around the world. Jane Delbene, director of marketing for Europe, the Middle East and Asia at GMAC, does not see the prominence of MBA programs in Europe and North America being replaced, but rather complimented by Asian equivalents. On the whole, there is not yet evidence that the relevance of the western MBA is diminishing, she noted, referring to GMAC s primary research into where GMAT test takers would like to study. In fact, programs in the West still capture the overwhelming majority of GMAT score reports. At the same time, the MBA at its core is a global degree, which extends opportunities to develop business skills that can be used effectively across all world regions. While US and European MBAs certainly grab employer attention and are invaluable to give students experience, those employers looking for business school graduates with specific knowledge of business practices in China and other fast-growing economies are likely to look to those country s top rated institutions to recruit. China s business schools are new compared to those in the West, and it s unlikely that the sun will set on the country s management education sector anytime soon. Richard Burns is the head of digital content at QS Quacquarelli Symonds and oversees editorial content on QS international digital education portals, TopMBA.com, TopGradSchool.com and TopUniversities.com. He has previously worked as a business journalist in both Australia and the Middle East. Imagine China 14 China Economic Review July 2012

15 column John Van Fleet Chinese innovation Alive and well among business schools Those who doubt China s capacity to innovate should look to the business school sector, writes John Van Fleet The MBA degree is now 21 years old in mainland China the first Master s of Business Administration (MBA) programs were approved by the Ministry of Education in 1991, while the first Executive MBA programs were launched in China s business schools (b-schools) now enroll around 45,000 students per year in MBA (35,000) and EMBA (10,000) programs. In the past five years, enrollments have increased roughly 10% year-on-year, a lower growth rate than in some preceding years but still exceeding GDP growth However, there are two points to note. The first is that statistics for aggregate enrollment are debatable, as are statistics for the wider economy. Second, MBA enrollment in 2011 declined by about 5% from the previous year, despite an increase of applicants and test takers. We may assume that Chinese b-schools became more selective in 2011, after being told by the Ministry of Education (MOE) to accept lots of applicants for the 2010 school year, the first enrolled class following the global financial crisis. The MOE s directive was in line with the Imagine China national government s desire to reduce unemployment statistics, in which graduate students are not counted. Adaptive developments Due to strong and at times inflexible MOE control, business schools are limited in what they can do domestically. While the large majority of MBA enrollees join purely domestic programs, mainland China b-schools have evolved some interesting international innovations to attract students. The double-degree program phenomenon, in which both the domestic partner and the overseas partner grant degrees, is one such innovation. Mainland b-schools gain a key advantage with double-degree programs: The programs usually don t require MOE approval, unlike the domestic-foreign collaborative programs that are widely called joint programs, in which the foreign partner confers the sole degree. Because of their structure, joint programs may become little more than facilities arrangements, in which the domestic partner has little invested. China Economic Review July

16 column John Van Fleet Imagine China With no skin in the game, the domestic partner gains only some rent and transient international cachet, creating no longer-lasting value. The MOE seeks to foster partnerships that help domestic b-schools develop and discourage superficial alliances that are predominantly aimed at generating rental income. In contrast, double-degree programs do not require approval because the domestic partner must contribute not only a substantial amount of their academic resources (curriculum and faculty time) to these programs, but also their student quotas, which are set by the MOE. Given the valuable resources the domestic partners must commit, they have a strong incentive to participate only in partnerships that compensate for the value of those finite resources. The MOE takes a your skin, your game approach and lets the domestic schools make their own calls on such programs. One strategy, many variations Peking University s Guanghua School of Management helped pioneer double-degree MBA programs in China, forming two in 2001 several more in the past few years. Each of the programs is relatively simple: Students study full time at 16 China Economic Review July 2012

17 column John Van Fleet Guanghua for a year, and then at the foreign partner s institution for up to a year full-time, or for longer under part-time study. In effect, these are more like exchange agreements than distinctly designed programs. In September 2009, Shanghai s Tongji University and the UK s University of Manchester launched their own double-degree MBA program. Every student in the program is counted against Tongji s MBA quota (all are required to pass the PRC s national MBA exam), and no MOE approval was required. Tongji has since launched two more double-degree programs: an EMBA with Germany s University of Mannheim, and an MBA/Masters in Finance with the USA s Case Western Reserve University. Wu Boning, deputy director at Tongji University in charge of the programs, said the collaborations are truly strategic. The school offers one MBA, one EMBA and a combined MBA/Finance MA, each with leading schools from western countries. I think we ve succeeded by putting aside shortterm considerations and focusing on long-term strategic value, she said. On the campus where I ve worked for a decade, we have another variant, in which the Antai College, Shanghai Jiao Tong University, collaborates with France s Euromed Management in an EMBA program. Students who select the double-degree option pay an incremental amount of tuition, attend additional classes and are counted against the Antai College s EMBA quota. The MOE has also considered another double-degree program, between Beijing s Tsinghua University and France s INSEAD. The double-degree programs allow the Chinese partner to invest their increasingly valuable content/perspective in the programs, as opposed to years ago, when the Chinese partners merely sought the brand of the foreign partner, said Zhao Ying, managing editor of Which.MBA.net, a leading China portal in the b-school space. The double-degree model offers domestic institutions a channel for innovation and an increasing number of Chinese institutions are taking the opportunity. John D. Van Fleet is Assistant Dean for the Marshall School of Business, University of Southern California, and Executive Director of the Global Executive MBA in Shanghai, a collaboration with the Antai College of Economics and Management, Shanghai Jiao Tong University. International Masters Programmes Welcome to ISCTE Business School! Programmes start in September: MSc in Business Administration MSc in Economics MSc in Finance MSc in Human Resource Management MSc in Marketing MSc in International Management MSc in Hospitality andtourismmanagemen t The Energy MBA A pply online at: /en All courses entirely lectured in English China Economic Review July

18 Q&A dr janet De Silva, Richard Ivey School of Business Learning business by example Dr. Janet De Silva is the dean of the Hong Kong-based Richard Ivey School of Business Asia campus. She is also a graduate of Ivey s EMBA program and has worked in Asia since 2000, moving to Hong Kong to lead Sun Life Financial s businesses in Hong Kong and China. She spoke to China Economic Review about the benefits of case method learning in the MBA classroom. Does Ivey s Hong Kong campus differ in curriculum and focus from the school s campuses in London and Toronto? It s exactly the same curriculum, it s exactly the same faculty. What is different, however, is because it s in Asia, the makeup of our class is much more diversified and this contributes to a much more diversified in-classroom experience. The class that just graduated had students from 10 different nationalities, with six different mother tongues. A typical class will include second-generation Asian family business owners, executives of Asian or western headquartered multinationals and western and Chinese entrepreneurs. In a case method classroom, this is a wealth of diversity, perspective and experience. Ivey is one of four exclusive case method teaching schools. What it means to go through an exclusive case method experience is that the learning is very, very different. Yes, you ve got textbook reading, but it s not lecture-based in the classroom. Instead, the classroom discussion is driven off of real business cases that relate to that subject. Dr. Janet De Silva Dean of the Richard Ivey School of Business, Asia campus How are MBA students given more exposure to Asian business practices? They are living and working here in Asia, so they are exposed to Asian business and work practices. I think the difference in how we approach the program is that the reality of business in Asia is one of two things. It s either business growth, where you ve got a multinational, or a Chinese enterprise that s really trying to take advantage of the growth opportunities here. Or you ve got a company that manufactures in China that is trying to navigate western markets that are slowing down. But at the end of the day, it s all about how you prepare yourself for growth. There seems to be a number of business schools being formed in Asia. The biggest factor right now is the need for talent. If we just look at China as a small case study, at 1.3 billion people, the biggest barrier for any company to growing in China is just 18 China Economic Review July 2012

19 Q&A dr janet De Silva, Richard Ivey School of Business access to people. In 2005, [consultancy] McKinsey estimated that there were probably 5,000 internationally capable executives in China. They further projected that to support the globalization of Chinese companies, within the space of 10 years, China needs to go from 5,000 to 75,000 internationally-capable business leaders in the country just to support the SOEs, let alone the multinationals and private enterprise. Do you believe an English curriculum might offer Chinese candidates more exposure and insight in to international business culture? I don t believe it s the language, per se. I am a firm believer that the case method program really gives much more insight into international business culture because you are dealing with real life cases. We just, in the last week, announced a partnership with the China University of Political Science and Law, which is the number-two law school in China. For them, they re looking to partner with us on an EMBA program containing all of the leadership elements of our EMBA, and all of our cases that we already use [are included] but what they do then is add the international law perspective. So any case that we re looking say for instance a European M&A case, they re going to have a separate class that deals with the differences between the legal framework in Europe that impacted that transaction, versus how that would have played out in China. More employers in China are interested in employees with MBA degrees now. How would you recommend an MBA or EMBA graduate set himself/herself apart from other degree holders? I think it s really the quality of the experience they get. We do a lot of work with corporations throughout China and Hong Kong. If we look at the constant theme of what we re hearing, it s how do we take people who are really good at doing things to be really good at leading things? So it s getting an experience through their EMBA learning that gives them not only the textbook knowledge but also the experiential knowledge to come back and employ that immediately as a leader. It s being able to set strategy, it s being able to focus on talent development and motivating the people around you. It s really the practical day-to-day skills of leadership that are really important. BBA / MBA ACCREDITED BACHELOR & MASTER DEGREES > Small classes - All courses taught in English > Excellent mix of theory and practice > International environment > Global campus network BARCELONA MUNICH GENEVA & MONTREUX Business Education Quai du Seujet Geneva, Switzerland Tel: info.gva@euruni.edu China Economic Review July

20 STUDY IN Singapore The draw of the Lion City With its central location in the Asia-Pacific region, Singapore has developed highly reputable business education programs Istock photo