Monday, Apr. 10, 2000
Help Wanted: Leaders
By Hannah Beech/Shanghai
Tang Haisong imagined that the toughest part of his Internet start-up would be getting the forms approved by Beijing's fossilized bureaucracy. But that was nothing compared with what the baseball-capped chairman of Etang.com faced when he began hiring for his company, which aims to become a Yahoo for China's youth. Good managers were even harder to find than efficient bureaucrats. "In terms of Internet technology, China is only five years behind the West," says Tang, who graduated from the Harvard Business School in 1998. "But in management expertise, we're at least two decades behind."
Hard to believe that want of B schools may be one of the most important issues facing China, but there it is. In the midst of its capitalist explosion, the country has one of the highest small-business bankruptcy rates in Asia, and only 9,000 locally trained M.B.A.s. In contrast, the U.S. churns out 70,000 M.B.A.s each year.
Worse, those who do secure a cherished spot in one of China's 56 M.B.A. programs don't necessarily have much to show for it. Even the Chinese Education Ministry concedes that its business schools are at a very primitive stage. Most professors still parrot information from outdated textbooks and, unsurprisingly, have no practical experience to share with students. "How can I trust my teachers if they've never dealt with a market economy?" asks an M.B.A. student at Peking University. "They have Ph.D.s in economic models that no longer exist."
Increasingly, the country is turning to outside help, like the China Europe International Business School in Shanghai, which was funded by the city's municipal government and the European Union. Another program is the Center for Business Skills Development, established in Shanghai two years ago in affiliation with Arizona's Thunderbird American Graduate School of International Management. Despite steep fees--about $10,000 annually, more than three times what a Chinese program costs--and an English-language curriculum, such programs are raking in applicants. Some multinational firms are doling out thousands of dollars in tuition scholarships.
The importance of the investment is finally dawning on China's threadbare state-owned enterprises. At CEIBS, nearly half the executive M.B.A. students are funded by state firms like China Non-Ferrous Metal Industry and China Eastern Airlines. The very notion of such specialized training is something of a social revolution. In the past, managers at state enterprises worked their way up the factory line to an office after a couple decades of dedicated but not necessarily distinguished service. "I have committed 13 years to my company," says Hou Yunfu, 35, an engineer whose ceibs tuition is paid by China National Petroleum Corp.'s Daqing Geophysics Institute. "It's good that they are now willing to support me, even if it's 10 years later than most people get their M.B.A.s."
With even the state sector combing business-school rosters for employees, capitalistic start-ups like Tang's may have an even tougher time attracting top-notch managers. Happily, he's been trained for that. "One of the things we talked about at Harvard was the ability to deal with unexpected problems creatively and quickly," he says.
--By Hannah Beech/Shanghai