Asia Inc
Sept 1995

MANAGEMENT: Asian MBA programs, 1995

sept 1995

Masters of their Own Destiny
Asia-Pacific MBA programs are a major growth industry, promising fast-track careers to the brightest graduates. But student hopefuls should beware of cheap imitations

Roc Peng Yang balances his tuna sandwich and soup on a plastic tray as he heads to the cash register. This is his third week at school, and the cheap-and-cheerful canteen culture is light years away from the black-tie dinners he attended as a senior interpreter with China's Foreign Trade Ministry. In that role, Peng would emerge from the shadows to repeat in palatable English the ministry's dire threats against the U.S. for linking China's most-favored-nation trading status with human rights.

Those were heady days, but Peng, 26, wanted a change, a new stimulus. The kind of challenge, and enhanced career prospects, offered by a master of business administration (MBA) program. When Peng graduates from the University of New South Wales in 1996, he can expect a salary of more than $ 50,000 a year from a China-invested multinational eager to capitalize on his newly learned skills and guanxi (connections).

Hong Kong's Michelle Ho, 23, also sees an MBA diploma as a passport to a new career. After two years with the accountancy firm Arthur Andersen, Ho enrolled in the program run by the swanky new Hong Kong University of Science and Technology. "Without an MBA, I'd have to work as an accountant for the rest of my life," she says.

Across Asia, as some economies grow at gravity-defying rates and others emerge out of self-defeating autarky, young men and women such as Peng and Ho are setting aside two years to try to inscribe their names on the MBA roll call. This is no soft option. For a start, it's expensive. And it requires spunk to gamble the present on the future and give up a well-paid job.

Besides, the program itself can be grueling and tedious.

Candles burn late as students wade through screeds on topics as diverse as power pricing in California and handling a strike in Tanzania, and wrap their weary brains around arcane mathematical equations. Cold fried rice, stale pizza and hot coffee become nightly staples.

Yet each year more than 100,000 status-seekers worldwide commit themselves to this grind, and for a very good reason. An MBA degree can put managers on the express elevator to their organization's upper echelons and bring a salary that trails many zeros, as well as all the other perquisites of fast-track Corporate Man (and Woman). Of course, you don't have to have an MBA to live in a waterfront condominium, drive a plush car and flash a gold-tinted credit card, but it certainly doesn't do any harm.

Terence Leung, 30, has no need to worry about his place in a corporate hierarchy: He has worked for six years in the family company. But he was determined to bring all the skills of the model manager to his job, and so enrolled in the Hong Kong University of Science and Technology MBA program. "As (my company) grew and expanded, we needed to be more efficient," he says. "We needed more experts in accounting and computing. As a project manager, I needed these skills and I didn't have them."

Given Asia's hunger for knowledge, regard for academic credentials and rising disposable incomes, MBA programs are enjoying a surge in popularity. The prestigious Indian Institute of Management school in Ahmedabad receives nearly 25,000 applications every year for its 200 places. Institute Director Pradip Khandwalla says overseas applicants don't stand a chance. Lee Kam Hon, dean of the business school at the Chinese University of Hong Kong, adds: "Asian MBA programs can be competitive but they are overwhelmed by local demand."

This year, Asia, Inc. ranks the Top 25 Asia-Pacific business schools that offer full-time, two-year MBA degrees (see page 48). In evaluating them, we have given due weight to subjective criteria such as reputation among recruiters and academics and overall academic excellence, and objective criteria such as entry requirements, alumni network, strength in original research and employment-placement record.

For many Asian students, an Asia-Pacific MBA makes compelling sense. Moreover, by bunching together bright young minds in a full-time MBA program, business schools can create embryonic networks of managerial talent that will help to drive the region's economies of tomorrow. An Asia-Pacific MBA has at least five significant advantages over those offered elsewhere:

Cost: A two-year program at Harvard Business School in Cambridge, Massachusetts, reputed to be among the best in the world, could easily cost an Asian student a cool $ 60,000 in tuition fees, learning materials, and accommodation and other living expenses, compared with $ 25,000 at most for a course closer to home. Says Burmese trader Felix Nyuntwai, 41, who chucked his emerging business in Singapore to pursue an MBA in Australia: "In the U.S., I'd pay four times as much. Frankly, I don't think that's worth it."

The Indian Institute of Management offers a quality program at a mere $ 1,500 a year. Yet management consultancies such as McKinsey & Co. and Coopers & Lybrand line up to cherry-pick the school's top graduates with the lure of glamorous international careers. One example: Bank of America Senior Vice President V. Shankar, who at 37 manages the bank's U.S.-based Asia banking unit, is a graduate of the institute's Bangalore school.

Proximity: In terms of cost and convenience, this is an important factor. Students can live at home, or at least keep traveling costs under control by avoiding the U.S. or Europe. For example, nearly 7,000 Malaysian students go to Australian universities each year, among them Malaysian Chinese squeezed out of higher education at home because their government's economic blueprint sets quotas favoring the admission of bumiputras (indigenous Malaysians).

Networking: Some believe the pool of U.S. alumni in Asia is too small for effective networking. That point is not lost on Hong Kong University of Science and Technology student Leung: "If you go to (the U.S.), half of your classmates will stay behind in the States. If you come here, most of your classmates will be in Asia."

Age: Overseas students are rarely accepted at a respected MBA program in America immediately after completing an undergraduate degree. Many Asian schools also insist on prior work experience, but they are better able to evaluate the merits of young Asian high fliers. Vijaya Manerikar, director of the Jamnalal Bajaj Institute of Management Studies in Bombay, says: "This is a cultural phenomenon. In India you are expected to complete your education early and then get on with your working life."

Relevance: Curriculum can be the best competitive advantage for Asian schools, though they suffer in any comparison with the West on the quality and quantity of their case studies -- the means by which students analyze real-life business problems and explore solutions. Says Jess Gallegos, dean of the Asian Institute of Management in Manila: "I admit that most Asian business schools use American materials and framework. But Western schools lack focus. The Asian management environments often depicted are from Japan, Korea and more recently China. There is seldom enough focus on South Asia and Southeast Asia."

While Asia-Pacific schools can't yet boast of an Ivy League freemasonry or an Oxbridge old boys' network, the best programs have the budgets to woo top faculty, expand their research base and build high-quality libraries. No wonder eager blue-chip recruiters stalk their campuses to hire the most dazzling graduates.

With an admired teaching staff, which has close ties with the international academic community, and its strong case-study program, the Melbourne Business School at the University of

Melbourne takes the No. 1 position on the Asia, Inc. list of the Top 25 Asia-Pacific business schools. Foremost among its credits is that it has developed a global curriculum with a sharp Asian focus.

According to the school's director, John Rose, today's Asian students are much more willing than their predecessors "to participate in class, take the initiative, organize activities." An Asian alumni network is also developing: MBA students contact successful new overseas applicants, put them in touch with Melbourne alumni in their home cities, offer to meet the new students at the airport, and ease their transition into a new environment.

Fred Hilmer, who was managing director of the Australian offices of McKinsey before becoming dean of the Australian Graduate School of Management at the University of New South Wales (No. 2), argues against garnishing an MBA program with a specific Asianness. "A good MBA curriculum uses its material like a skeleton," he says. "The flesh comes from the students. If you have a class with a good international mix, you will have an Asian flavor without having to publicize it."

The Asian Institute of Management (No. 4) does not want for an Asian flavor. Set up in 1968 with the aim of being the best business school in the region, its staff is proud of a program that Gallegos describes as "practitioner-oriented." Half its professors have served as chief executives or chief operating officers, worked for the government or run their own business. Many are directors of listed companies.

Another of the institute's undeniable strengths is its 22,000-strong alumni network across Asia. Gallegos says: "You can look in the alumni directory, call up that person, introduce yourself as a fellow alumnus and your foot is in the door." On the downside, campus space is at a premium: Students often have to meet in campus lounges for group discussions.

By contrast, the Indian Institute of Management school in Ahmedabad (No. 5) is set in a secluded suburb, with a striking complex designed by renowned architect Louis Kahn. The institute, set up in 1961, began by using case studies from Harvard University, but the faculty quickly realized that was not enough. A vigorous case-writing program has yielded over 2,000 studies from companies in South Asia, East Asia and East Africa.

Anupam Puri, managing director of McKinsey in Bombay, says: "I don't see very much difference between the best people coming out of Ahmedabad and the best people coming out of Harvard or Wharton (at the University of Pennsylvania), with the very important exception that these people are 24 and not 28."

Perhaps the most ambitious emerging business school is at the Hong Kong University of Science and Technology (No. 7). Associate Dean Leonard Cheng says: "We want to be one of the best business schools in the world. We set the same standards in terms of teaching and research as they do." The four-year-old university's high-tech design integrates 12 buildings within one complex in scenic Clearwater Bay.

Just edging it out for top honors in Hong Kong is the Chinese University of Hong Kong (No. 6), perched on a beautiful mountainside overlooking the New Territories, which launched the territory's first MBA program in 1966. With an annual budget of $ 45 million, it can buy the best. Moreover, its faculty has unmatched access to companies across the border in China.

At Singapore's Nanyang Technological University (No. 14), the MBA program stresses the Asian business experience. Based in a huge, airplane-shaped complex 25 kilometers from the island's business district, the business school requires students to participate in study missions to China, India, Malaysia and other Asian countries. Vice Dean Toh Thian Ser says: "We cannot depend only on teaching tools like cases from the mature economic models of the West, since the concerns in our region are different. We are obsessed with growth but American companies are obsessed with downsizing and consolidation. Our businesses need to follow strategies that increase and sustain this growth."

Set in a sylvan campus beside Canberra's Lake Burley-Griffin, the Australian National University (No. 10) has developed a new "boutique" course (its MBA, in a neat twist, stands for Managing Business in Asia). Director Bruce Stening says: "Our program was developed with a specific focus to improve the ability of managers to successfully undertake business in the world's fastest-growing economies." The program is small (43 students) and the classroom is exceptionally multicultural: A prayer room is even provided for Muslim students. Student James Horton, 32, a naturalized Australian born in Malaysia, says: "I wanted a program with an Asian focus. It is critical if you want to succeed."

Despite major investments in gleaming school buildings and talented faculty, the best Asia-Pacific schools remain poor cousins of their Western counterparts. When Asia, Inc. listed the Top 25 business schools in the world for Asian students a year ago (see "A Major Business Asset," September 1994), the Melbourne Business School was the only one outside North America and Europe to creep into the reckoning (in 25th position).

With the notable exception of the best in Australia, and perhaps the Asian Institute of Management, no school in the Asia-Pacific region is truly pan-Asian. Because most programs serve mainly domestic needs, their MBAs are a less portable asset. A Hong Kong recruiter, for example, is unlikely to be impressed by a job applicant waving an MBA diploma from a university he has never heard of in, say, Thailand.

With the boom in MBA programs, quality control will increasingly become an issue. India, which generates nearly half the MBAs in the world outside Europe and the U.S., has authorized 400 new business schools. Says Khandwalla of the Indian Institute of Management: "Where is the faculty going to come from? Anyone who wants to start a business school seems to be able to do so. What is the worth of such a diploma?"

In a recent expos on an Australian television program, Sunday, University of New South Wales lecturer David Clark said the country's universities were lowering standards to pursue fee-paying overseas students (mainly Asian), some of whom went home with "Mickey Mouse" degrees. Curtin University in Perth and the University of Wollongong have sacked academics who complained that standards were being compromised.

Also in Australia, the University of Newcastle is proposing to lower its admission qualifications by offering an MiBA, or Mastersin International Business Administration. Its rationale: Getting into traditional MBA programs is too tough for some overseas students, though they are willing to pay top dollar for the degree. Solution: Change the curriculum to make entry easier. Result: a profit of $ 700,000 by the third year (if all goes to plan).

Meanwhile, Western schools won't readily concede their supremacy to the Asia-Pacific upstarts. Distance and cost are hurdles that can be vaulted: Boston University, for example, runs a full-fledged program in Japan; Wharton offers week-long China-focused programs for $ 1,500 per student. However, these are substitutes, not alternatives.

Most of the case studies used in Asian business schools were written by Harvard tutors and relate to Western experiences. The better Asia-Pacific schools are developing local cases. But they are being challenged from an unexpected quarter: Some of the best Asian cases today come from the Euro-Asia Centre at the European Institute of Business Administration (better known by the shorthand term INSEAD) in Fontainebleau, a tree-lined modern school outside Paris. Harvard, too, is expanding its vistas, asking two Hong Kong-listed companies, Li & Fung (Trading) Ltd. and First Pacific Co., to take part in case studies.

In short, Asia-Pacific schools still have to go some way to prove that they are worthy alternatives to their Western counterparts. But students like Roc Peng Yang at the University of New South Wales are not complaining. He says: "The opportunities are great in China now, far better than anywhere else in Asia." At such a time, those with the right credentials -- an MBA of course, among them -- can almost write their own paychecks.

Additional reporting by Allen Tien-Jen Cheng in Hong Kong and Miguel Bernas in Manila

Salil Tripathi, Asia, Inc.'s Singapore-based correspondent, obtained his MBA from the Amos Tuck School of Business Administration at Dartmouth College, New Hampshire. He chose journalism as a career, and does not get to write his own paycheck.