No doubt about it, the Masters of Business Administration degree is a hot commodity in China. Fifteen years ago, then-paramount leader Deng Xiaoping oversaw the creation of China's first nine MBA programs. Today 230 programs graduate some 20,000 students a year.
Unfortunately, quantity and quality do not go hand in hand. Despite the explosion in Chinese B-schools, most corporate recruiters give graduates middling to poor marks, according to a BusinessWeek survey of 173 corporate recruiters at both Chinese and multinational companies with operations on the mainland.
In our survey, undertaken by recruitment consulting firm Universum Communications Inc., fewer than 20% of respondents described Chinese MBA graduates as either good or excellent, and only 34% said students' quality had improved over the past three years. "Students lack confidence and have no idea how to express themselves," said Nona Kang, of AIG Business Consulting, in a typical comment. "Short on the spirit of risk-taking," said Teresa Li, group director of human resources and administration at Tristate Holdings Ltd., a Hong Kong garment manufacturer.
Why are potential employers dissatisfied? One issue is that the lure of big bucks from MBA tuitions, which in China can run as high as $27,500 for a 20-month course of study, has led to a flood of less reputable programs. "Many entrepreneurs and companies have set up their own universities, and the quality has gone down," says Wang Fanghua, dean of the Antai College of Economics & Management at Shanghai Jiao Tong University, a top-rated school in our survey.
That means many companies are thinking twice about hiring newly minted MBA grads. Some employers also note that an educational system emphasizing rote memorization and deference to authority doesn't turn out take-charge managers. "In the classroom, we can get students to analyze the heck out of a problem, but to get them to make a decision is very difficult," says Lydia J. Price, associate dean at the MBA program at China Europe International Business School, a joint venture between the Shanghai government and the European Union. ceibs won top ranking in overall quality in our survey.
No wonder many employers prefer Chinese grads from B-schools outside China such as Harvard, Stanford, and Wharton. "The strength of instruction that they get in these programs, plus the experience they get studying overseas, makes [these] graduates very attractive," says Emre Demokan, senior manager of staffing for Microsoft China (MSFT).
To ensure that Chinese B-school grads have the skills they desire, some companies are taking a bigger role on campus. At Beijing University's Guanghua School of Management, any company that hires more than five students is invited to join in interviews from which the next year's incoming class is chosen. Guanghua has developed particularly strong relations with Lenovo (LNVGY), Samsung, IBM (IBM), Lucent (LU), China Mobile (CHL), and Bank of China. (For a story on monks earning MBA degrees, see BusinessWeek.com, 11/27/06, "Monks With MBAs")
Companies like Philips Electronics (PHG), one of the largest foreign investors, also find Chinese MBAs need more training. "We are not just bringing them in," says Elizabeth Martin-Chua, executive director and senior vice-president, Greater China, for Philips Electronics China Group. "There must be a coach and a mentor to support their growth."
By Dexter Roberts