Wharton Faculty Explore Business in China Trips and Course Expand Knowledge and Opportunities
“It’s one thing to talk about growth - it’s another to see it in action,” says Wharton marketing professor Leonard Lodish, who led recent Wharton trips to China for both the MBA Program for Executives and the MBA program’s Global Consulting Practicum, of which he is Senior Director.
The global engagement of Wharton faculty with one of the world’s critical business regions includes trips across the MBA, MBA for Executives, and Executive Education programs, as well as a new MBA course on Chinese business, an office in Shanghai to build relationships with business and government leaders, and Chinese editions of Wharton’s world-leading online newsletter Knowledge@Wharton, which also recently published a special report on business in China.
Student Trips Provide Consulting in China
In the last year, students from Wharton’s MBA, MBA for Executives, and Executive Education program have all taken trips to China, under the leadership of either Prof. Lodish or Professor Marshall Meyer, one of the world’s leading experts on business in China.
In the Global Consulting Practicum (GCP) trip to China, the student group worked with two Chinese businesses: a small biotech firm and a larger carpet company. The biotech firm had been hurt by Merck’s withdrawal of Vioxx, as they produced a similar product. “We were able to help them find other ways to get cash flow so they could stay alive to develop more drugs,” reports Prof. Lodish.
At the carpet company – a vertically integrated business that sells its products around the world – the GCP group created an online system to help managers decide which factories should make which orders and how much capacity they would need to do it.
As in all GCP projects, Wharton MBA students worked side-by-side with students from local universities, and “there were lots of interesting cultural barriers,” says Prof. Lodish. For example, Chinese students are “much more concerned about who’s losing face and what body language says.”
Prof. Meyer reports similar experiences from Wharton’s Executive Education program, for which he has been academic director of three programs in China. “They’re very adept at managing people,” he notes about Chinese business executives. “Because the culture is less black-and-white than ours, most people are very attentive to personal relations. People see more possibilities and are willing to entertain alternatives a great deal more than here in the U.S.”
For example, he recalls a situation in which a Chinese executive resigned, then wanted to rescind his resignation. From the Chinese perspective, “retreat opens possibilities,” and the company was therefore open to that kind of flexibility. “No one in the U.S. would think that way,” suggest Prof. Meyer. “We would say retreat is defeat.”
New MBA Course Analyzes Business in China
In the Management department, Professor Meyer has innovated a new course on the Governance and Management of Chinese Firms, begun last year and taught this year to 17 MBA and 5 undergraduate students, who were, he reports, “the best I’ve ever seen at Wharton. They’re very, very focused, and they’re requiring more and more of me. The sophistication of the MBA students really shows in this class.”
The class analyzes Chinese businesses from 1949 to the present, grouping them into three primary eras. From 1949 to 1988, says Prof. Meyer, “business firms as we know them did not exist.” Then, in 1988, state-owned enterprises received independent legal status, which made them responsible for their own profits and losses.
In 1993, “state enterprises were redefined as business corporations, and private businesses were allowed to incorporate as limited liability or stockholding companies.” Nevertheless, despite this step forward, Chinese business development remains “a work in progress,” due largely to the ongoing tension between reforms and state control.
“Much of what we take for granted in the U.S.,” observes Prof. Meyer, “ - for example, that we understand the boundaries of the firm, where it begins and ends – does not hold in China. Students planning to invest or work in China need to understand the rules of the game, the fragmented nature of Chinese firms and markets, and the role of the government and the party in management and governance.”
Prof. Lodish echoes these comments, noting the enormous development and promise of Chinese business in the years to come. “Compared to Japan,” he says, “there is a more innovative spirit in China. We are going to see a lot of interesting stuff coming out of there, especially in biotech, in software, in the internet, and in cellphone innovations, where they’re ahead of the U.S.
“I’ve been to China in 1989, 2001, and then this past year,” he concludes, “and what was amazing to me was how fast things have changed. A trip that took 2 days in 2001 now took 2½ hours. It was all superhighways. And it was all built up in just a small matter of time.”
