AGSM MBA students visit Chinese business

AUTHOR: Editor   DATE: 01.05.07   ISSUE 1, 2007

In Shanghai and Beijing they had access to high profile executives in both the government and business sectors across a range of industries. Many of the executives were AGSM alumni which allowed very open discussions about the key issues and challenges of doing business in China.

The trip allowed the students to meet a number of experts who understand the art of doing business in China.

Illustration: Gregory Baldwin

The students had a number of interesting meetings in Shanghai. They visited companies ranging from multinationals—such as Booz Allen Hamilton, Johnson & Johnson, Boral Lafarge, BHP Billiton and Hewlett Packard—to the local—Principal Capital and MySteel.com.

The trip began with a China overview from three of Booz Allen’s more experienced partners, Edward Tse (Managing Partner), Ronald Haddock (with 14 years of logistics experience in China) and Nicholas Pennell (the energy sector consultant).

This gave students valuable insight into the big picture issues seen by leading consulting firms. At each company they visited, the senior management spoke to the students about various aspects of working in China and issues related to their own sectors.

Clinton Dines, CEO of BHP Billiton (China) and Robin Bordie (BHP’s China economist) provided a fascinating insight into the resources business in China.

Ben Avancena and Alwin Hui of Johnson & Johnson provided an overview of the medical equipment market in China, emphasizing the daunting task facing the Chinese government in providing health care to one billion people, many in remote communities.

At Minter Ellison, David Cox gave an interesting presentation on managing Intellectual Property in China and the state of the commercial legal sector. This presentation, together with the discussions with Christian Devillers, CEO of Lafarge, helped to provide a complete picture of intellectual property (IP) related issues. While protection of IP is a definite problem, companies such as Boral Lafarge have found that with time, they have developed the capabilities and appropriate operating policies to deal with infringement of IP.

At Egon Zehnder, students met with Benjamin Zhai, who, along with some of his colleagues, explained the nature of the workforce in China and the historical factors that have contributed to the current shortage of local middle management talent. Most interesting, was his explanation of the local attitude to the communist government. The communist government is widely respected and seen as the author of the tremendous economic progress that China has witnessed in recent years.

AGSM students participated in an inaugural study trip to China where they visited Shanghai and Beijing

One of the important takeaways after visiting a number of MNC’s in Shanghai was that Chinese companies are learning quickly and are fast becoming a credible threat, especially as competitors in the Chinese market. For companies hoping to cater to the growing Chinese consumer market, it is these Chinese companies that could pose the greatest challenges.

Another unique visit was a presentation by Mysteel.com CEO Mr Zhu. Mysteel.com is an online steel trading portal. The presentation and dinner afterwards gave students a glimpse into the workings of a “real” Chinese company, a fascinating experience and the first time many of them had been in such a situation. What stood out is the difference between Chinese companies and multinational corporations in terms of facilities, people and culture.

A highlight of the trip to Shanghai was dinner with MBA students from China Europe International Business School (CEIBS) as it gave students the chance to interact with local students and talk to them about their perspective on the developments in China.

Students spent the second half of their trip in Beijing, which offered a much greater taste of Chinese culture. They visited Kung Fu shows, watched the Chinese opera and of course, visited the Great Wall. Tian’anmen square and Forbidden City also left a lasting impression on the group.

After a weekend of sightseeing in and around Beijing, students spent the next three days visiting companies and preparing their final presentations. In Beijing, they visited DHL, ANZ and The Clinton Foundation.

Professor Timothy Devinney led the two-week study trip to China.

Photo: Professor Timothy Devinney

Visiting DHL gave students insight into both the logistics business and the way a multinational company can replicate its existing business operations into China. The Clinton Fundation gave them the chance to visit a non-profit that operates in 40 countries and entered China in 2004. In China, the Clinton Foundation is working with the government to provide cheaper anti-retroviral drugs to people with AIDS. The visit with Selina Lo (a clinical physician) and Aaron Pattillo (a pharmaceuticals expert) highlighted the extent of the AIDS epidemic in China and the complex pathways of dealing with the issue in a country with little experience with civil society organizations.

The trip concluded with what students thought would be a relatively straight forward trip to Tianjin Economic-Technological Development Area about 150km from Beijing. They set off at 7.30 am for what should have been a three to four hour ride. However, thanks to a traffic jam, they were caught on the highway for close to seven hours. Their journey served to highlight the potential logistical problems of working in large Chinese cities. As the population increases dramatically in cities such as Beijing, current infrastructure, although impressive, may soon prove to be a bottleneck.

In summing up their experience in China, it would be fair to say that the students gained much in terms of understanding the subtleties of doing business in China as well as understanding the culture. Although they walked away knowing that what they had learned was just the tip of a very large ice-berg, their two weeks in China allowed them to gain a valuable overview in a relatively short time and the unique opportunity to meet a number of people who understand the art of doing business in China.