Management Gap

A major question is whether there is quality in depth in the provision of management education in China.

Some Executive MBA (EMBA) courses at lesser universities have been attacked for being places for business people to make contacts with people who might open doors for them rather than get educated, something which in China is termed guanxi.

"They are basically friendship clubs where you get to know government officials also enrolled on the course. You pay your fee and you are guaranteed your degree. It has little to do with studying at all but more about networking and advancement," says a professor at a leading Chinese university who didn't want to be named.

Some argue that part of the management gap in China is that the quality of the existing management is not as good as in counterpart European and other foreign companies.

Mike Bastin, a visiting professor at both China Agriculture University and Tsinghua University and who has delivered management training in both Europe and China, says the culture of many Chinese companies is not a good breeding ground for talented managers.

"Chinese companies are almost exclusively male dominated with the power very much at the top," he says.

"You advance in a company through your connections or guanxi and not through any concept of meritocracy. It is difficult for good managers to demonstrate their worth."

Bastin adds that people within the management chain are not encouraged to make any personal contribution.

"One step inside a typical Chinese company is usually enough in order to gain some insight into the organization's culture. For example, desks of employees are usually divided from each other almost forbidding any discussion among colleagues throughout the working day. Meeting rooms are a rarity within Chinese firms, too," he says.

Wu Changqi, associate dean and professor of strategic management at the Guanghua School of Management at Peking University, says it is possible to place too much emphasis on European and other Western companies having more advanced management systems.

"It can actually make them very reliant on management method and best practice and as a result they are often not as instinctive as some of the more modern Chinese companies," he says.

Wu says the rapid development of the Chinese economy means that a lot of the chief executives and senior managers of Chinese companies are a lot younger than their Western equivalents.

"They are often around 40, whereas the heads of European companies typically are in their 50s. As a result they are often more willing to take risks and are more entrepreneurial. In my experience they are also willing to learn modern management skills."

Management training expert Bastin, however, says the picture in a lot of Chinese companies is that young management talent is not sufficiently rewarded.

"Middle managers often earn only 10 percent of what an equivalent manager in a European company would earn," he says.

"This is not true of senior management and the guys at the top who are often paid 15 to 20 times more than what someone would get in a European company. This can be seen by the conspicuous material possessions they often have."

Thun at Said Business School says too much can be made of cultural differences when assessing China's management gap.

"I would argue it is less about the cultural difference between a Chinese manager and his Western equivalent than the structures of the organizations they are operating in," he says.

"If you put a young Chinese manager in a Western corporation he would learn very quickly the operating procedures of that organization and operate in many respects like a Western manager."

Many believe the lack of high quality management in China is holding back the economy.

Chen Weidong, chief researcher at China National Offshore Oil Corporation (CNOOC), says the management gap is one of the reasons why Chinese companies have failed to establish a presence abroad.

"Despite what is a favorable environment, Chinese enterprises are struggling in their effort to establish recognized international brands. One of the main reasons for this is the severe shortage of managers and business executives who can handle international mergers and acquisitions and trans-national management," he says.