New Perspectives for the Elite

IN 2012 ALONE, 46,736 Chinese residents applied to take the GMAT exam, a crucial part of the application process for postgraduate management qualifications. According to data from the Graduate Management Admissions Council 2012, this increase of 252 per cent since 2008 made Chinese residents the second-largest group of prospective business school students in the world. Yet why are so many Chinese professionals flocking to business schools? In a complex, ever more globalised world, where the financial crisis has challenged many old truths, do traditional management programmes offer anything to their graduates?

For academics Peter Lamb and Graeme Currie, writing in the journal Management Learning in 2012, an MBA is “a mere market-signalling device to recruiters, with an ‘elite’ MBA facilitating access to higher paying-jobs”. It is certainly the case that gaining an MBA can increase an individual’s salary, and Chinese MBA graduates in 2012 with job offers reported an average salary increase of 71 per cent from their pre-degree earning. The question has risen as to whether these salary increases are actually justified – whether the MBA actually provides tangible, practical lessons and information that makes a candidate measurably better than one without the degree.

Recruiting MBAs

As more Chinese professionals graduate with MBAs, hiring processes are beginning to change. According to Simon Lance,China regional director at Hays Specialist Recruitment, the market for MBA graduates is becoming more complex. He notes, “Employers are now more discerning than they were. They are increasingly aware of the different types of management qualification available, and the standings of the business schools which offer them.” Lois Freeke at Kelly Services Recruitment agrees, stating, “I think there was the perception a few years ago that an MBA was a guarantee of a good job with a top MNC. These days, with MBAs being much more common, the market is more selective about where the MBA was earned, and how the candidate has implemented their studies.” This is something that the 46,736 potential management students need to take on board. If employers do not consider all business schools to be equal, then nor should potential students.

Both Lance and Freeke agree that an MBA degree alone is rarely sufficient to guarantee employment. While acknowledging that a degree from a top school is always an advantage, Freeke observes that when businesses are recruiting, “Proven experience with a competitor in a particular role is usually given more priority than an MBA.” This clearly provides something of a challenge for business schools, where most of the learning is done through textbooks and lectures. One option is to develop links with local businesses to try to provide examples and case studies with which students can interact in the “real world”, not just in the classroom. A school that has attempted to do this is the International Business School in Suzhou (IBSS), which is well-placed at the heart of the industrial powerhouse of the Yangzte River Delta. The school’s dean, Professor Sarah Dixon, sees this as an important way for IBSS to develop. “In the future,” she says, “we aim to maintain and enhance our ties with local and multinational businesses so our students have hands-on access to the experiences necessary to excel in today’s fast changing business environment.”

Away from China, Tufts University’s Fletcher School of Law and Diplomacy has a different solution to the problem of students graduating with good knowledge of management theory but an inability to put this understanding into practice in the real world. They have established a Master of International Business qualification, which the school’s Senior Associate Dean of International Business and Finance, Bhaskar Chakravorti, says aims to put business education in an international context and to explore how private enterprises interact with everything else – e.g. politics, human rights, or international law. “If you look at issues like how to manage a global supply chain, for example — something that came to prominence recently with the collapse of the Rana Plaza factory in Bangladesh — these things cannot only be understood from a purely business perspective,” he says. As Chinese enterprises seek to move “up the value chain”, such considerations will become increasingly important.

Enlarging the scope

Another aspect potential business students should consider is the international nature, or otherwise, of the different business schools. Pejay Belland, director of marketing, admissions and financial aid of degree programs at INSEAD, states that “We feel that it is important that future leaders understand a variety of cultures and business approaches.” INSEAD’s yearly intake of about 1000 MBA students typically includes around 80 different nationalities.

Some business schools in and around Shanghai have an international feel by virtue of being jointly founded by Chinese and foreign universities. IBSS is part of Xi’an Jiaotong-Liverpool University, and Tongji University and the Parisian Ecole Nationale des Pontset Chaussées jointly run the Shanghai International MBA programme (SIMBA). Sally Zhou, SIMBA’s marketing director, remarks that this year there has been a marked increase in the number of international students studying at their school.The challenge is to cater to both international and domestic students on the same course. At SIMBA, Zhou says,“The course aims to help Chinese students to do business internationally, while helping international students with the culture and networking of doing business in China.”

The IBSS international MBA program is slightly different: while it may have a Chinese flavour, Dixon says they focus very much on the international business environment. Again, professionals must be careful to choose the course that best suits them. For someone working for a Chinese company, which mostly interacts with local producers and consumers, an MBA that discusses a wide range of different international jurisdictions may not be appropriate. Equally, if a potential student wishes to work for an MNC or work abroad, then the preference should be for a more international course.

The China Europe International Business School (CEIBS) program strives for a balance, embodied by the motto “China Depth, Global Breadth”. “To succeed in China,” says Chen Shimin, associate dean and academic director of the MBA program at CEIBS, “it is essential to understand China’s developmental challenges of resource management, labour relations, and environmental protection, and to develop skills for leading China’s ongoing economic evolution in a responsible and sustainable way. At CEIBS we build this type of China knowledge and this emphasis into the required curriculum.”

Ethics and entrepreneurship

One way for schools to support the different needs of their students is by providing a range of optional modules, from which students can choose the ones which best suit their professional development. These also provide a sense of the skills students wish to gain from their course, and the direction in which management qualifications are moving. One striking development that CEIBS, INSEAD and SIMBA have all noted is the increased uptake,in recent years, of their entrepreneurship courses. Professor Charles Chen, associate dean at CEIBS, hints at a possible cause for this, observing, “Since the global economic crisis, we have noted an increasing interest among our students in starting businesses.” Chen is careful with his choice of words, merely noting the correlation, rather than saying that the economic crisis caused the upsurge of interest in launching start-ups, but the link does seem plausible. CEIBS Yvonne Li, MBA director for admissions and career services, also cites her institution’s Center for Entrepreneurship and Investment (CCEI), which “serves as a bridge between successful entrepreneurs and current students”.

Other popular electives, says Chen Shimin, are“Luxury Retailing”, “Game Theory and Strategic Marketing”, “Mutual Funds & Portfolio Management”, and “Asian Economic Integration”. A further elective that he mentions – undoubtedly very popular – is “Understanding the Financial Crisis”.

Another trend that has probably been hastened by the global economic crisisis an increased attention paid to the ethics of business. This is a worldwide development, and in 2009 the Harvard Business Review ran a series of blogs entitled “How to fix business education” discussing business ethics at some length. When asked about the impact of the financial crisis, both Dixon and Belland said that the economic crisis had led to further reflection on ethics within the industry. In fact INSEAD’s MBA now includes a compulsory ethics course.

Schools unilaterally view ethics as a welcome addition to the MBA profile. It must be remembered that the pursuit of an MBA involves an investment in time and money that would make little sense if there were not significant financial rewards to be realised. SIMBA’s MBA costs a total of USD35,800 over two years, while CEIBS’ 18-month course charges USD62,000 and INSEAD weighs in with a ten-month program at USD78,000.


The situation for the Executive Master of Business Administration (EMBA) is a little different from that of the MBA. Lance remarks, “At the top of the market, an EMBA serves as a stronger differentiator.” Unlike the MBA, comparatively few professionals pursue the EMBA, so those who do have the qualification stand out when companies are seeking to recruit for senior positions.

Tuition costs are also measurably higher than that of the MBA, with Global EMBA courses at CEIBS and INSEAD costing USD92,500 and USD125,500 respectively.

However, there are some similarities to the situation with the MBA. The issue of a local or global perspective is one, and Charles Chen says that CEIBS deals with the issue in their EMBA by drawing on case studies, which, he says, “either delve into a China specific issue within a global context or a global issue from a Chinese perspective”.

Making Connections

For Chakravorti, exchange programmes are very important for his students. He comments, “Exchanges enable The Fletcher School’s students to study in new markets, study under local professors but most importantly study with students who are local to these markets.”

The same is true for Chinese students considering going overseas. Lance states, “The academic content is part of the benefit of an MBA, but the connections you make and the business and leaders you are exposed to are just as important.” Business schools in China are well aware of the importance of connections, and Zhou says that “One of the key benefits an MBA at SIMBA can provide is enhancing its students’ networks — classmates and alumni can be a powerful consulting pool.”

However, the growing importance of building connections on an MBA brings with it an associated risk. If networking becomes the most important part of taking an MBA, then the lectures, classes and exams become undermined, and the course will inevitably gain a reputation as a fabricated corporate retreat. For the MBA to remain a meaningful qualification, the main benefit has to come from the classes themselves.

It is a topic about which Chakravorti grows especially passionate, stating, “One major question for a lot of students is whether the role of a business school is to gain knowledge or to pivot your career. If it is the latter, then there is a risk, particularly on a one-year business course, that schools become simply an aggregation pool for talent. To my mind, that is a bad thing. If business schools do not help their students to educate themselves into a classic set of knowledge, you run the risk of creating more financial crises.”

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