Budding Filipino taipans urged to study in China

John Quelch, pictured in a 2003 file photo, used to be senior associate dean of Harvard Business School and is now dean at the China Europe International Business School. Quelch, in a recent interview with the Inquirer, encourages Filipinos to study in China in order to “study the future” of business. AFP PHOTO/BILAL QABALAN

MANILA, Philippines—Many Filipino executives and entrepreneurs turn to Western universities for their masters in business administration. But a British professor from China’s largest business school, himself once part of the US Ivy League system, argues that up-and-coming tycoons with ambition to build an international business with an Asian perspective must consider studying in China instead.

“Why go and study the past when you can come to China and study the future?” John Quelch, dean at China Europe International Business School (CEIBS), says in a recent interview with Inquirer.

Quelch was in town to make a pitch for CEIBS, a 17-year-old business school in Shanghai, which is a joint venture between the European Union and China. This school aims to be the leading business school serving the Asia-Pacific region, offering MBA programs focused on “China depth, global breadth.”

With the massive shift of global wealth to Asia, in turn largely driven by China, Quelch says everyone is now considering China either as a place to invest in or a place to sell products and services to. “And even if you’re not planning to come to China, China is going to come to you,” Quelch says, adding that with Chinese enterprises going global, enterprises will want to understand how Chinese companies operate in order to defend their market position.

Quelch notes that CEIBS’ full-time MBA program in English has been ranked 20th among business schools across the globe while its executive MBA program has been ranked by Financial Times 11th globally. At the same time, he says CEIBS’ MBA programs are priced very competitively and significantly lower than the pricing of the top US schools.

“We believe that up-and-coming Filipino managers who are looking into the future of their enterprises will want to know and learn more about China,” he says.

“We’ll be there as an East-West bridge, to provide that combination. We can interpret China to the world and interpret the world to China,” he adds.

Going to the top US schools like Harvard and Stanford can also provide a good network but Quelch says whether such network would be useful in building a business in Asia remains to be seen. “No international school, not even Harvard or Standford, can match us in terms of global breadth,” says Quelch.

Quelch believes that Filipino businesses with visionary leaders can create very strong international brands. “I think those examples should be inspiring more Filipino businesses to go beyond the national boundaries,” he says.

The London-born professor also notes the likes of Oishi maker Liwayway Marketing and Jollibee Foods Corp., which have successfully established businesses in China. Part of the reason for his visit to Manila, he says, is to develop relationships with such corporations.

Quelch joined CEIBS as dean in February 2011. Previously, he was senior associate dean and professor of Business Administration at Harvard Business School. Between 1998 and 2001 he was Dean of London Business School.

Born in London, Quelch was educated at Exeter College, Oxford University (BA and MA), the Wharton School of the University of Pennsylvania (MBA), the Harvard School of Public Health (SM) and the Harvard Graduate School of Business Administration (DBA).

Rightly so, Quelch says there are the likes of Bill Gates and Steve Jobs who didn’t finish college but built great businesses. “These examples of people who are hugely successful people should not be used as an excuse by tens of thousands of lazy people wanting to avoid going to college.”

“What we find is we can accelerate and enhance the chances of being a successful entrepreneur by giving them a tool kit and experience in problem solving and analysis that will enable them to beat the odds and not make too many mistakes,” Quelch says.

AIM Lecture

During his visit to Manila, Quelch also talked about penetrating China’s markets in a lecture organized by the Asian Institute of Management Washington SyCip Graduate School of Business.

The Shanghai-based educator cited the Chinese economy, which has a current gross domestic product growth rate of 9.1 percent per annum. To date, over 300,000 foreign companies are reported to have invested in China and the net profits of the top 500 Chinese companies have been surpassing those of the United States since 2009.

“Understanding the Chinese culture and the mindset of its people plays a key role in establishing, maintaining and growing businesses in the region,” says Quelch. He mentions, for example, the importance of guan xi—interpersonal relationships and connections—as a factor for succeeding in China’s markets.

Investors were also urged to leverage on the growth of online commerce in the country. “Chinese consumers are highly active online, with 550 million Internet users and 13 billion texts message sent on average per year,” Quelch says.

Other important factors for success are the collaboration between foreign principals and Chinese partners, the localization of products, and the establishment of effective and efficient distribution channels.

But Quelch is quick to warn potential investors that China is no place for quick profits or returns on investment. He speaks of how the rule of law is not firmly implemented in that country. He also cites the lack of sector-appropriate or product-specific governance, the negative impact of both the one-child policy and the aging population on the economy and the workforce, and the difficulties in human resource management.

These factors notwithstanding, China is bent on having a stronger economy by 2015 as its government ratified its Twelfth Five-Year Plan in October 2010. To succeed, China will have to rebalance its domestic consumption and encourage innovation in various technologies.

Quelch notes that China will have to encourage the growth of its service sector, especially in light of the entry of numerous players in the hospitality industry. The country will also have to develop such creative industries as cinema and advertising.

On the tiff between the Philippines and China on disputed territories at Scarborough Shoal, this is what Quelch has to say: “Life has to go on regardless of what’s on the front page…. The only thing more dangerous than dealing with China is not dealing with China.”