An Identification and Examination of key Reasons why Chinese Universities Develop Strategic Alliances with Foreign Universities: Reaching Out to the International Educational Community Mike Willis, Monash University Abstract A body of literature has started to emerge focussing on a variety of Sino-Foreign alliance activities in the services area including higher education, particularly between Chinese and Foreign universities. This is a major area of cross-cultural marketing as most of the 1055 universities and institutes in China have foreign alliances. Although there has been considerable research regarding the types of activities undertaken, and the levels of alliances formed in this sector (Hayhoe, 1989, 1996; Willis, 2000 a,b), there has been less evaluation of the factors which have motivated Chinese universities to search for international partners. This research identifies a range of factors driving the Chinese desire to form alliances with foreign universities. These in general relate to the special and somewhat idiosyncratic role of universities as agents of social and economic change in China. To effect this change they often seek foreign partners who can assist China to develop a market economy. Introduction There are many studies investigating the nature and form of Sino foreign strategic alliances. They have tended to focus on issues such as success factors, and the role of guanxi in alliance formation and operation. (Punnett and Yu, 1991; Pan and Vanonacker, 1994; Wong, 1998; Wong, 1999; Wong and Leung, 2002). However, there is less research focussing on why Chinese organisations and companies operating in specific economic sectors, such as education, seek out foreign alliance partners. Usually studies cite the need to attract foreign expertise, capital and access to foreign markets. (Roehrig, 1994). In the case of some sectors, such as Sino foreign higher education alliances an area of considerable activity with over 3000 alliances in Shanghai alone (Willis, 2000a) - these general factors do not seem to explain in precise detail why Chinese universities have devoted considerable resources to seeking foreign partners. The current research aims to provide a more definitive and precise identification of specific factors which motivate Chinese universities to develop alliances with foreign universities through the use of a qualitative process undertaken across 35 Chinese universities. The findings may assist foreign universities entering the Chinese higher education alliance market to better understand the complex and somewhat idiosyncratic motivating factors behind the desire of most Chinese universities to develop numerous alliances with foreign partners. From a more theoretical perspective the current research may show that motivational factors behind educational alliances may be somewhat different from other Chinese strategic alliance sectors therefore suggesting that educational strategic alliances cannot automatically be considered to be similar to other types of alliances a point made by Willis (2001a), and by Hayhoe (1996). ANZMAC 2002 Conference Proceedings 221
Literature Review Child (1990), Punnet and Yu (1991), Pearson (1991), Beamish and Spiers (1991), Li, Lyles and Wharton (1991), Roehrig (1994), Pan and Vanonhacker (1994), Pan, Pitts and Vanonhacker (1995), Pan and Chi (1999), Czinkota and Ronkainen (2001) all discuss, to some extent, strategic alliances between Chinese and foreign companies in terms of a range of factors including, to some extent, the motivating factors encouraging Chinese companies to seek out foreign partners. Thee factors tend to be broad and general, as noted above. Less attention has been given to precise and specific reasons why Chinese organisations in individual sectors, such as higher education, seek out alliances in the first place. In the field of higher education Sino foreign alliances, Hayhoe (1989, 1996) and Willis (2001 a,b) discuss some of the mutual advantages in regard to Sino Foreign strategic alliances, but do not focus in specific detail on what motivates Chinese universities to search for foreign partners. Yet there are over 10,000 strategic alliances between Chinese and foreign universities, and it would be useful to find out what motivates most Chinese universities to sign agreements with as many as fifty foreign universities which is the case with the larger and better known Chinese universities. (For example, Beijing University has over 60 alliances, while Nanjing University has almost 200). Methodology A case study approach was adopted in 1995/6 and again between 2000 and 2001 to interview 35 Chinese universities using Patton's (1990) model of inductive conversational interview techniques where respondents were asked very wide questions upon which they could elaborate; the information was distilled into several categories using processes summarised by Miles and Huberman (1984), in particular their use of display techniques to summarise findings and analyse them into categories or themes. Information was stored in note form initially and then grouped into computer-based files. Overall the process was deliberately respondent driven to seek their views with minimal leading by the interviewer. Universities were located in Guangzhou, Shenzhen, Lanzhou, Nanjing, Beijing, Huangzhou, Shanghai, Wuhan, Wuxi, Shandong Province and Tianjin. Findings Chinese universities sought foreign partners for a range of reasons. Firstly, they wished to access courses in the fields of marketing, business, management, strategic planning, project management, accounting, banking, business law, segmentation and international business. They felt these programs would (a) assist China to develop a modern market economy, (b) help China play its role in the international market as a member of the World Trade Organisation, and (c) add value, prestige and depth to their own university businessmanagement programs which were often less comprehensive than courses in the sciences and engineering which had been emphasised prior to 1978. Increasingly, the demand was for complete degree and postgraduate foreign programs delivered in China using a range of foreign and Chinese teaching staff with access to study abroad at the foreign university home campus for some of the more affluent Chinese students. Chinese university staff liked courses which were basically unadapted, that is, as close as possible to the subjects delivered in the foreign university campus. They assumed that the ANZMAC 2002 Conference Proceedings 222
content of these subjects was international in nature, rather than confined to issues related to Australia, Canada or another foreign country. Chinese university staff tended to focus on two key aspects of foreign courses: their content and the style of delivery. As noted, the content desired was generally unadapted but international in content, while the style of delivery in China was required to be westernised in the sense that it would encourage students to think for themselves, develop critical analytical skills, think independently, generate creative ideas and solutions, and not just accept the teacher as an expert which tended to be the case in China amongst more traditional teachers. Chinese university staff felt that if western university staff could deliver an international degree, in China, using a primarily western teaching style, their students would start to understand western ways of thinking about business. Therefore, it was not just the content of courses which was considered to be important, but the style of delivery which was viewed to be just as crucial. In reality, western teachers in China indicated that they needed to adopt three teaching roles: that of an expert (where they told the students what to do in a prescriptive, structured and decisive way which was somewhat reminiscent of their Chinese counterparts), a facilitator (where they would encourage the students to think for themselves to develop alternative solutions to issues and problems), and a friend (where they would develop appropriate teacher-pupil relationships with their students so that the latter could feel relaxed and even confident about learning to think in a creative, individual and innovative way). Increasingly, Chinese universities also sought foreign partners to also fill other gaps in their curriculum, in areas such as tourism, real estate management, advertising, media, logistics, and other issues which reflected the changing nature of China as it went through waves of deregulation and change. These niche areas were important in three situations (a) where there was a demand in the local environment for such programs, such as for real estate courses in Shanghai, (b) where there was a very competitive local university market - such as in Shanghai where there were over 40 universities and institutes, thereby forcing these organisations to offer new, and often different, courses and programs to attract students and enhance their levels of differentiation, and, (c) where the nature of the university (for example, in the case of agriculture universities) encouraged their managers to ask for particular niche courses which would add value to their core business. (An example was some of the specialised agricultural programs offered by the China University of Agriculture in Beijing). China still retains 14 categories of universities, although the demarcation lines between the various categories (such as agriculture, forestry, arts, economics and so on) are stating to blur. Importantly, however, universities in all categories wanted businessmanagement courses as these were perceived to be important to all. Chinese universities increasingly desired alliances with foreign universities to also engage in student and academic exchange programs, to undertake research and to engage in commercial activities such as consultancy programs in China. Exchange programs were considered important because (a) they enabled Chinese staff and students to visit the foreign campus, (b) they could be used to raise income from foreign students studying in China, and (c) they often helped to attract Chinese students who might be lured to the Chinese university on the basis that at some stage they could study in the foreign country. Exchanges were a way of building brand equity for the Chinese university, particularly when established with a considerable range of well known foreign universities. Research projects were valued for several reasons too - (a) they could raise income particularly when the foreign university ANZMAC 2002 Conference Proceedings 223
could assist in the commercialisation of research projects being undertaken in China (a common form of alliance activity between Chinese and Hong Kong universities), (b) they helped to raise the brand equity of the Chinese university, (c) they could be used to attract research funds from the west, and (d) they could be promoted to attract postgraduate students from around China and even from the west to engage in Sino-foreign research projects. Many Chinese universities complained that research programs were often left out of alliance agreements in favour of concentrating on the delivery of subjects in China and abroad. Consultancy activities were of increasingly importance as they were a source of income generation for both sides, at a time when Chinese (and for that matter many western) universities were seeking additional sources of funding. Activities included strategic analysis activities for State Owned Enterprises, Chinese private companies and joint ventures, the conduct of courses and programs for these bodies, and more specialised activities designed for particular companies. Funds obtained from these activities would often offset some of the costs of conducting foreign courses in China. The gradual deregulation of the Chinese higher education system also helped to drive Chinese universities to seek foreign partners, not just to undertake the aforementioned activities and programs, but to help to shore up the image and reputation of Chinese universities as they struggled to survive in the face of often quite tough competition and deregulation. Universities within the top one hundred in China (denoted as such under the so-called 211 program) focussed on developing alliances with the best universities in the world: the other 1000 universities in China tended to be less fussy, striking alliances with many types of foreign universities and institutes in the hope that some of them would develop into viable and valued alliance programs which would help them survive in what were very uncertain futures. Some foreign universities noted that the smaller non-211 Chinese universities were very keen and amenable partners, but they sometimes had very short life spans, being either abolished or integrated into amalgamated universities. The larger, more prestigious (and better funded) top 100 Chinese universities were more fussy, harder to negotiate with, and often more temperamental, but they tended to have a guaranteed future with access to significant levels of government funding. The growing complexity of alliances desired by Chinese universities was changing the nature and face of Sino-foreign educational programs which were becoming more complicated, long term, and committed (in the sense that the Chinese wanted foreign staff to spend more time in China to conduct the various activities and programs). Alliances were moving from low level, basic and often informal programs to far more complex and long-term alliances which often included the development of joint campuses in China. There was a tangible sense that western educational alliances were a source of knowledge, information, expertise and affective/cognitive skills which could assist China achieve its goal of developing a modern, competitive market economy and society. However, there was also a degree of resentment amongst Chinese universities whose staff sometimes felt that this western education as some termed it, was become too popular, prevalent and fashionable. Some Chinese staff worried that the flood of foreign alliances and programs could eventually undermine core Chinese values, but others felt that these skills added strength to these values which, they believed, were too deeply held to be ever challenged by western beliefs. However, all agreed that alliances were of crucial importance if China was to achieve its goal of being an international economic superpower. ANZMAC 2002 Conference Proceedings 224
Conclusions and implications A range of reasons drove Chinese university collaboration with foreign universities. Of particular interest is that the majority of these related to the perceived role and position of education as a key and critical driver of structural change in China. This finding reinforces the views of Hayhoe (1996) and Willis (2001 a) who noted the important social and economic role of universities in China as agents of economic and social change. The view that foreign alliances could somehow assist Chinese universities to play an increasing role in the development of a modern market economy in China was just one of the unusual factors of these alliances: the range of activities and programs inclusive of course development and delivery, the various research programs, the inclusion of exchange initiatives, and the various commercial undertakings, combined to separate these alliances from many other forms of alliances, for example in the field manufacturing. Typically, educational alliances were complex, often fragmented, and structurally difficult, since they often encompassed many aspects and programs. The Chinese also viewed them as not necessarily being established to generate income, but to satisfy national economic goals. The implications of this research for foreign universities are that they need to: - Provide courses and programs, in China, to enable that country to continue to develop a market economy; - Provide additional programs to fill emerging niches; - Be prepared to offer complete degrees in China rather than just occasional short term courses or study abroad programs; - Be able to demonstrate to a potential Chinese university partner that they bring to the relationship a high degree of brand equity which will assist both sides in the rapidly deregulating Chinese market; - Be prepared to undertake a wide range of activities (research, seminars, exchange, commercialisation projects) and not just limited course delivery; - Be able to support increasingly high numbers of foreign staff being located in China, for considerable periods of time, to deliver the various classes; - Be aware of the different expectations of Chinese universities within the 100 compared to their non 211 counterparts; - Be open to suggestions for the development of higher level alliances such as the establishment of a joint venture campus in China; and above all, - Be sensitive to the particular and special role of universities in China as key agents of economic and social change. In terms of theory building, this research tends to indicate that Chinese educational alliances may be quite different to other forms of alliance, not just in content, but in regard to their role and objectives, which as noted in this case related to national economic development and modernisation goals achieve through foreign educational programs and activities undertaken in China and abroad. ANZMAC 2002 Conference Proceedings 225
References Child, J., 1990. The Management of Equity JVs in China. Beijing: CEMI press. Czinkota, M., and Ronkainen, I., 2001. Best Practices in International Business. Orlando: Harcout. Hayhoe, R., 1989. China s Universities and the Open Door. New York and London: M.E. Sharpe Inc. Hayhoe, R., 1996. China s Universities, 1895-1995, A Century of Cultural Conflict. New York and London: Garland Publishing. Huang, Q., Leonard, J and T. Cheng, 1998. Business Decision Making in China. New York: Haworth press. Lyle, M., Li, S., and Wharton, R., 1991 Joint Ventures: a Sino-US Perspective. In Shenkar, O., (Ed.), Organisation and Management in China, 1979-1990. New York, London, M.E. Sharpe. Miles, M., and Huberman, A.M., 1984. Qualitative Data Analysis: A Sourcebook of New Methods. Beverley Hills, CA: Sage. Pan, Y. and Vanhonacker, W., 1994. Equity Sharing Arrangements and Joint Venture Operations in the Peoples Republic of China. Working Paper, Hong Kong University of Science and Technology. Pan, Y., and Chi, P.S.K., 1999. Financial Performance and Survival of Multi National Corporations in China. Strategic Management Journal. 20, 359-374. Pan, Y., Pitts, R., and Vanhonacker, W., 1995 Joint Ventures in China: Operations and Potential Close Downs. Journal of Global Marketing. 8 (3/4), 125-151. Patton, M., 1990. Qualitative Evaluation and Research Methods. California: Sage Publications. Pearson, M., 1991. Joint Ventures in the People s Republic of China, a Progress Report. Princeton, NJ: Princeton University Press. Punnet, B., and Ping, Y., 1991. Attitudes Towards Doing Business with the PRC. In Shenkar, O.,(Ed.).Organisation and Management in China, 1979-1990. New York, London: M.E. Sharpe. Roehrig, M., 1994. Foreign Joint Ventures in Contemporary China. Basingstoke: McMillan. Shenkar, O., 1991. Organisation and Management in China, 1979-1990. Armonk New York, London: M.E. Sharpe. Willis, M., 2001a. How Chinese State Universities And Foreign Universities Cooperate In An International Education Market: The Development And Application Of A Four Tiered Sino- Foreign Higher Education Cooperation Model. Journal of Marketing for Higher Education. 11(1), 32-54. Willis, M., 2001b. Strategic Alliances Between Chinese and Foreign Universities: Was a Staggered Form of Entry Used? Journal of Marketing for Higher Education. 11 (3), 65-84. Wong, Y.H., 1998. Relationship Marketing in China: The Myth and Magic of Guanxi. Journal of International Marketing and Marketing Research.. 23 (1), 3-13. Wong, Y.H., 1999. Can Relationships be Segmented. The Chinese Guanxi Approach. Journal of Segmentation in Marketing. 3(2), 23-41. Wong, Y.H and Leung, T., 2002. Guanxi. Relationship Marketing in a Chinese Context. New York: Haworth Publications. ANZMAC 2002 Conference Proceedings 226