China’s MBA programs are changing to reflect a local hunger for entrepreneurship. In order to tap into the generous inflow of venture capital entering the country, ever more local candidates are looking to MBAs “either to better manage the businesses they have started or to start additional ventures after they graduate,” noted Lydia Price, associate dean and academic director of the MBA program at China European International Business School (CEIBS).
Seasoned entrepreneurs like Cai Dabiao (EMBA class of 2006), founder of Kungfu Catering, a fast-food chain, have been through CEIBS’s executive MBA program. But it is younger MBA graduates who are more interested than ever in starting their own businesses – and want to set to it sooner rather than later.
Until recently, students often told MBA recruiters they’d set up a business “maybe 20 years after graduating,” according to Price. “Now, students in the new intakes are saying they will start their own business sooner – say, just five years after graduating.”
Globally, MBA programs are increasingly adding modules on entrepreneurial skills and management of startup businesses. And China is no different. China is no different.
“The majority of candidates are interested in finance and consulting, but an increasing number are looking for MBAs to help them start their own business and use it to seize international opportunities,” said Jeanette Purcell, chief executive of the London-based Association of MBAs. “There’s also an increasing emphasis on developing interpersonal and leadership skills.”
Yet despite developments, there are still far fewer entrepreneurs coming out of China MBA programs than from their counterparts in the West. Less than 1% of college graduates in China go on to start their own business, while this number is 20-30% in Europe and the US.
MBAs offered by international schools in China sometimes appeal less to the entrepreneurially-minded and more to those looking for the next rung on the multinational corporation ladder.
“The course was more geared toward international executives, very little of it was specifically about entrepreneurship,” said Caroline Catts, a 2006 graduate of the Rutgers MBA program delivered in China.
All 30 students in Catts’s class – half foreigners, half Chinese – worked at multinational companies. “The Chinese students were doing it for career advancement opportunities, they were seeking an international approach to business … for ways to contribute to the company.”
A shortage of executive talent in China may be why many local MBA graduates predominantly end up working for large multinationals rather than smaller Chinese firms.
“We emphasize the soft skills that modern multinational recruiters are looking for, such as teamwork, critical thinking, open communication and ability to access modern financial services,” said Price. “Companies most likely to seek those characteristics in MBA hires are multinationals and modern, internationalized Chinese firms.”
The better salaries offered by multinationals are a big pull; 70% percent of candidates in Cheung Kong School of Business’s MBA programs are junior to middle-level executives from multinational companies, while only 5% come directly from start-up companies.
While multinationals will remain the destination of choice for most MBA graduates, the growing competitiveness of small and young Chinese companies will start to show in MBA intakes in “three or four years,” predicts Cao Huining, a professor of finance at the Cheung Kong Shanghai campus. “Their pay is now almost competitive with multinationals and MBA graduates are beginning to work at these companies.”
Biding their time
Furthermore, the perception that Chinese MBA graduates are only risk-adverse corporate bodies may be misleading. Some are simply putting in time at multinationals to gain experience before striking out on their own.
Yu Han, a student currently enrolled in a two-year MBA program at Duke University in the US, is planning to work “three to five years” at a multinational consulting company to “get ideas and experience for my own business.”
Yu, 30, spent five years building a chain of English language schools in her native Harbin before starting the MBA. Eventually, she wants to set up a consultancy and a private college teaching business and management. The “generality” of the MBA at Duke prepares her for running a company. “You learn all the facts of business rather than just marketing or finance.”
Elsewhere, the trend towards entrepreneurial MBAs seems even more apparent. CEIBS is hiring professors with entrepreneurial experience in China, while an on-campus Entrepreneurship Club hones students’ networking skills.
An elective course on “basic entrepreneurial management” awaits students in the first semester of the school’s MBA curriculum. Later, another elective course can be taken in which students receive guidance on developing business plans for a new venture.
“In most cases, the projects described in this class are real projects that the students want to launch,” explained Price.
Conversely, programs at Chinese universities – which often have a strong emphasis on classroom teaching – have less appeal for budding entrepreneurs.
“This [teaching] has its value, but we encourage them to include practical assignments and group activities too,” said Purcell of the Association of MBAs.
Some Chinese universities are answering this call to broaden their curriculum. Three local business schools recently met the accreditation requirements to join the association.
This is just one way in which MBA programs in China are adapting fast – and there is much more to come as schools try to cover all the bases.
“We will in the future be dealing with a portfolio of student types, some people will go for senior management and some to their own business,” said Cheng Kong’s Cao. Aside from offering specific modules on VC and private equity, Cheung Kong has teamed up with private equity firms, and in three instances, MBA students received a million or two renminbi to develop business plans for internet start ups, he said.
CEIBS is also looking abroad to prepare students to make use of venture capital, sending them overseas to one of 30 partner schools with strong backgrounds in finance. Venture capital-curious Chinese students have gone to the London Business School and the Stern School at New York University.
According to Duke’s Yu Han, most of her 30 mainland Chinese classmates are planning to return to the same company on a better package, or stay and work in the US after graduation. But for both future entrepreneurs and multinational managers alike, she agrees that “An MBA opens doors.”