Three Chinese Proverbs Expose Gaps in U.S. Business Education

By Robert Gogel December 05, 2014

---

Photograph by Qilai Shen/Bloomberg

The high speed train that connects Shanghai and Hangzhou.

Having taught in MBA programs and worked for many years in China, I have found that most Western business students have little insight into the mindset of an economic power that is on a path to surpass the U.S. in the near future.

Here are three Chinese proverbs that may help the next generation of business leaders understand better what they will face in the marketplace.
Time: “You won’t help the new plants grow by pulling them up higher.” Americans view time as linear. Tasks are usually considered monochronically, often with a focus on getting work done on time while avoiding distractions.

Story: Peter Thiel Is Wrong About MBAs

In China, time is more polychromic. The emphasis is
on long-term goals and relationships, rather than schedules, which means it is entirely acceptable to do several things at once. For example, talking with a colleague and at the same time answering a cell phone and engaging in a brief conversation with a passerby is not considered rude.
How long will the Chinese wait for “the plants to grow?” In the early 1990s, they realized the need to invest in high–speed rail to accelerate economic growth. They upgraded tracks and entered into joint ventures with Alstom (ALO), Bombardier (BBD/B), and Siemens (SIE). Government policy then shifted to developing trains capable of going 800 kilometers per hour by 2018 (current speeds average around 350 kph, already faster than U.S. trains).
In the U.S., plans for high-speed rail have been buffeted by political and economic tides and have run up against powerful road and airline lobbies. While California continues to move ahead with its controversial plans, there isn’t a long-term national policy.

Story: Best Business Schools 2014: How They Were Ranked

Education: “If you want one hundred years of prosperity, grow people.” One of the most striking elements of Chinese society is the heavy emphasis on education at all levels, from primary to postgraduate and even executive-level training. I recently taught in a two-year executive MBA program for state-owned enterprise executives, where the average age was 45 years old and the individuals had been sent (and financed) by their companies with the sole purpose of learning modern management theory to prepare them for positions that were probably 10 years into the future.
The U.S. has hundreds of executive MBA programs designed to enhance skills for midcareer executives. Although still subsidized by some employers, the cost has increasingly become the burden of the individual, with a longer, uncertain payback. Ironically, just as many employees in the U.S. reach their peak skills, many employers push them out through early retirement programs to save on cost.
Networking: “With guanxi, nothing matters; without guanxi, everything matters.” Guanxi is a complex concept founded on the notion of mutual obligation among family, relatives, school alumni, co-workers, etc., as well as those who might be introduced through these contacts. It goes far deeper than the Western notion of an old boys’ network and certainly a LinkedIn (LNKD) contact.

Story: Women's Career Choices Don't Explain the Gender Pay Gap

These relationships are considered lifelong. In business, the guanxi bond does not have to be based on money and often starts with establishing the trustworthiness of individuals involved.
For five years, I taught an MBA class, and on every visit to China since then, a group of my former students invite me to an informal dinner. On my last visit, I was asked to write a college recommendation for one of my student’s children. I had met and mentored the child over the years, but even had that not been the case, the recommendation would have been expected. Not because I had been taken to dinner, but because of the quanxi that had developed over the years.
While most U.S. universities and particularly business schools have built great endowments and networks among the alumni, faculty, and students, the elements of trust and reciprocity are missing. That is the secret of guanxi. While it may be impossible to duplicate in the U.S., understanding how deeply rooted quanxi is in the Chinese culture is essential to understand the competitive landscape.

Story: The Renewed Pushback Against For-Profit College Rules

What can the U.S. business schools learn from these three proverbs that will help them prepare their students better to do business in China or compete head on with their Chinese counterparts?
Encourage students to adopt a longer-term orientation to achieve goals.
Find new economic models—such as extended paid apprenticeships and flexible academic calendars to allow for working hours—that will enable an affordable higher education that also produces graduates that find rewarding and productive roles in the work force.

Story: The Startups of Nazareth

Push MBAs to invest in more personal relationships so that business dealings are built more on trust than a legally binding contract.

Abraham Lincoln once said, “Give me six hours to chop down a tree, and I will spend the first four sharpening the ax.”

U.S. businesses, as well as political leaders and policymakers, would be wise to think about sharpening their axes to help the U.S. become more competitive, productive, and socially relevant. This will take time, education, and trust, three ingredients of Chinese culture that perhaps we should embrace.