The New Gold Rush: EMBA Education in China

by Shaoxuan Liu, Grace Lemmon, Daniel Heiser & Bin Jiang

Bin JiangNow more than ever, multinational companies are conducting business in China. The Chinese culture is historically complex, nuanced and locally varied. Even with extensive preparation, expatriate managers struggle to understand the basics of the Chinese marketplace, customer and economy. As a result, multinational companies look to hire local professionals to manage their Chinese businesses. More specifically, they need local professional managers who can understand domestic and international business rules, theory and practice, and who can communicate in English. Because of these requirements, there is a huge demand for Western-style Executive MBA (EMBA) education in a Chinese business context. Many Western business schools are rushing into this emerging Chinese EMBA market.

To learn more about EMBA programs in China, a group of researchers from DePaul University and Shanghai Jiao Tong University surveyed 18 EMBA programs to reveal current trends. We found that EMBA programs in China are rarely concerned about meeting recruitment goals—demand has steadily increased and the EMBA degree continues to be the gold-standard of success—but were greatly concerned with faculty, specifically who the faculty should be and how to retain talented faculty. Thus far, there are three EMBA program models in China.

Model 1: Degrees issued by Chinese universities

In the first model, a Chinese university (CU) issues the EMBA degree. The CU makes deliberate attempts to incorporate Western education into this degree: the school often hires foreign professors under short-term contracts or sends its faculty to foreign universities for training. The CU controls the curriculum and degree requirements. While this model may eventually result in an EMBA program that meets the needs of multinational companies, those companies need to hire managers now, indicating that this model is not a feasible solution to current demand. Further, the CU rarely understands fully the educational expectations multinational companies have of their recruits, limiting the utility of the degree.

Model 2: Degrees issued by Western universities linked to Chinese universities

Model 2 occurs when a Western university (WU) links itself to a CU. This domestic-international partnership distinguishes itself from Model 1 in several critical ways. First, the EMBA-issuing university is the WU, and therefore has complete control over program schedule, class size, tuition rate, curriculum and degree requirements. The WU also uses its own English-speaking faculty, regularly rotating in faculty for compressed classes. The main drawback of this model is that, because of their short stay in the country, WU faculty members do not understand local knowledge enough to incorporate it into meaningful business lessons.

Model 2 is the dominant model because multinational companies trust the WU’s brand, degree and expert faculty, largely because the curriculum is commensurate with that taught at the domestic WU site. However, this indicates that multinational companies, too, ignore the importance of incorporating local lessons into the EMBA program.

Model 3: China-European International Business School

In the past several decades, U.S. universities have dominated business education, with the Top 10 universities rotating regularly (e.g., Wharton, Stanford, Kellogg). Those in business education in Europe saw only two available markets for competing with the U.S.: having first-mover advantage in India and China, the two largest potential EMBA markets in the world. The China-European International Business School (CEIBS) is the result of those efforts. Model 3 again represents a departure from the previous models, specifically with respect to its staffing decisions. Thus far, CEIBS is the only institute using this model. Like Model 2, this program is taught in English.

CEIBS recruits WU professors for long-term, multiyear contracts, which culminates in a stable, enduring faculty base. Here, the Western-educated and -experienced faculty become embedded in the Chinese culture, bringing this deeper, localized perspective into the classroom. Because of the immersion, the faculty members become familiar with Chinese students’ strengths and weaknesses so that they can address more proactively areas of misunderstanding related to their lessons, with specific attention paid to cultural interpretation and understanding. The “soft” lessons are thus taught in addition to the practical business education.

While the CEIBS addresses the drawbacks of Model 2—specifically with respect to how WU faculty are positioned to incorporate past Western educational experiences with lessons learned over time while living in China—it is an expensive model. Incentivizing talented faculty from a WU is costly, particularly when incentivizing faculty to give up tenure at their existing WUs.

Which models will prevail?

With five of the top 11 programs in the 2012 Financial Times Executive MBA ranking taught in China, the country now is the hottest market of EMBA. In the predictable future, Model 2 EMBA programs will continue to dominate this market due to WUs’ reputation; Model 1 programs will catch up rapidly because more and more younger-generation Chinese faculty members, who have received WUs’ doctoral degrees in business, are joining these programs; and Model 3 programs will eventually become mature due to constraints of extremely high initial investments and maintainance costs.

EMBA in China tableThis research into the executive MBA market in China was conducted by Shaoxuan Liu, associate professor, Antai College of Economics & Management, Shanghai Jiao Tong University along with Driehaus College of Business scholars, Grace Lemmon, assistant professor of management, Daniel Heiser, associate dean and associate professor of management and Bin Jiang, Driehaus Fellow and management professor.

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