Teaching the Business of Agribusiness

The Chinese Academy of Agricultural Sciences EMBA program is the only accredited program in China directed at the huge food industry

The Chinese Academy of Agricultural Sciences (CAAS) Executive MBA program in food and agribusiness -- offered in conjunction with the University of Iowa's Henry B. Tippie School of Management and with Purdue University -- grew out of consulting work that the Franklin Institute of Management (FIM) did with food companies in China.

With agribusiness growing even faster than the Chinese economy as a whole, FIM -- a Beijing-based executive-training company -- saw tremendous demand for an MBA program devoted solely to that sector. Chinese universities didn't have expertise in agribusiness, and agriculture universities lacked classes in general management, so FIM looked to the West, settling on the University of Iowa and Purdue, which FIM felt offered the best combination of strengths. Iowa and Purdue approached the CAAS in 2003, and a deal was struck. Unfortunately, that was the year of the SARS epidemic, so the first class was delayed until 2004.

FIM Managing Director Henry Chang, a former McKinsey consultant and a moving force behind the program's formation, sat down with BusinessWeek B-Schools Editor Louis Lavelle in Beijing recently to talk about the program. Edited excerpts of the conversation follow:

As the first -- and, so far, only -- accredited MBA program in China with a focus on food and agribusiness, what impact will your graduates have on the Chinese food industry and the Chinese economy?

I think they'll play a very fundamental role in changing the landscape of general management for this industry. Food and agribusiness in China is a very fragmented industry. A lot of the companies are owned by private business owners. Most of them don't have a systematic educational background, and they don't know that much about foreign companies. I think our students will change this situation.

China produces 47% of the world's pork and 42% of its produce, much of it from poorly managed state-owned enterprises. How will the Western management theories and business practices shake up those companies?

After China entered the World Trade Organization, the agricultural market was opened to the whole world. Multinational companies are already here in China. The business community in food and agribusiness is really under pressure to improve their own competitive advantage. They need to increase their scale, their company size.

Our program is really a great contribution to this new situation. We provide people who can manage big companies and compete with multinational companies.

How does this program familiarize students with international business practices?

This program is really up to the international standard. We promote interaction between the Chinese students and the U.S. students. During the summer, we're planning to invite the U.S. students to come here to China, so they can pair up and visit the Chinese students' companies and do some problem solving.

The University of Iowa has been doing this for some years [in Brazil], but not in China. It really provides the U.S. students an opportunity. It's a good opportunity for Chinese students, too. They really want to know more about what's going on in this industry outside of China, especially in North America.

One of the challenges that many Chinese B-schools face is finding case studies involving Chinese companies. When you're limited to Chinese food companies, the choices must be far narrower. How do you find Chinese cases?

We tried very hard to build in a lot of Chinese content. But this is the first year, and all the courses are taught by U.S. professors. We had a long lead time, so the professors had enough time to look for China-related cases. Also, CAAS has [its] own faculty collecting and writing their own Chinese cases. In the morning, the U.S. professors lecture on theories and practices that apply to the Western world, and we have local professors [from CAAS] in the evening -- they give lectures on specific areas.

There's a lot of talk in China these days about the declining value of the MBA. What's driving that?

Two to three years ago, if you had an MBA degree, you were hot. Right now, because there are so many MBA programs, a lot of them are really not good programs. That damaged the image of MBA education. If you look at last year's statistics, the applications are already going down, and a lot of not-so-good MBA programs are really suffering in terms of student recruitment.

It's supply and demand. If you look at other industries, it's the same. If you have a lot of producers and they compete on price, not on quality, then boom, quality goes down. I think it really boils down to educational integrity. The government can do something, but I don't think they can be that helpful.

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