Following successful outings to Chile, Israel and Thailand, this year’s group of Weekend MBA graduates from Indiana University Northwest spent spring break in China.
“The International Business Experience was officially added to our program a few years ago. We’re one of just a handful of universities that offers it as part of their program. Everything, from airfare to hotels and most meals, is included with the IU Northwest Weekend MBA program. Passports and visas are about the only expenses not covered,” John Gibson, director of Graduate and Undergraduate programs for the IU Northwest School of Business and Economics said. “After joining these groups on four trips, I can honestly say it’s a once-in-a-lifetime experience,”
“China is a critical country in the world trade arena,” IU Northwest Professor of Marketing Subir Bandyopadhyay, who led this year’s trip, said. “We had the opportunity to visit two major cities – Shanghai and Beijing – during the week, with five scheduled working days. This particular course does not include an exam, but the students are expected to update a blog starting with their pre-visit perceptions of the country. I think based on size alone, the students were awestruck.”
That’s because China is ranked number one with 19 percent of the world’s population. For comparison consider that the US, at number three, has 4.44 percent.
Shanghai’s population of 24 million makes it the largest city in both China and the world – with more people living there than the top three cities in the US combined.
“At eight million, New York City (#1) dwarfs Chicago (#3),” IU Northwest MBA graduate David Bucur said. “When you realize Shanghai is actually three times the size of New York City, it just blows you away. One thing you notice right away is the stark contrast between classes. You can literally shop at Gucci and Lamborghini at one end of a block and then see people who are living with no indoor plumbing at the other end.”
“When we arrived in Shanghai, I didn’t expect it to be so beautiful,” IU Northwest MBA graduate Brenda Rocha said. “Our tour guide was phenomenal, she was a wealth of knowledge and shared a lot of history. Our itinerary was very detailed with a lot of structure, but it also gave us some flexibility. We always had time to walk around in the evening. Everyone wanted to see the buildings and eat the local food.”
Business tours in Shanghai included the Baosteel Group Corporation and Ford Motor (China) Ltd.
“When students arrived at Baosteel the expectation was that it would be a very labor intensive facility without much technology,” Bandyopadhyay said. “That impression was immediately dispelled when we toured the hot rolling mill with leading edge technologies. It was fully automated with a maximum of six or seven people just checking monitors for things like temperature and water flow.”
This particular tour was well received by all, especially those who work in the steel industry.
“They told me they didn’t think the US steel industry could afford that type of investment in technology,” Bandyopadhyay added.
“My husband is a steel worker, so the tour of the steel mill opened my eyes,” Rocha said. “It’s hot and dangerous. I had to come all the way to China to see what happens in a steel mill. It was nice to have the people from our class share their insights about the differences between here and there.”
At Ford, the plant managers were not ethnic Chinese so the group learned what it would be like to relocate internationally.
“Many of our students start their career in a Gary plant, and then within a year or two, they are offered an opportunity in Indonesia, Bosnia or Brazil,”
Bandyopadhyay explained. “In order to move up the ladder, you need to be prepared for such an assignment.”
“The blend of both socialism and capitalism – with state-owned enterprises like Baosteel and privately-owned companies like Ford – the whole interplay of how that works was really interesting,” Bucur added. “We were very well received at all the businesses we went into, and they were all very open about sharing their processes with us.”
Opting to see more of the vast country they had traveled to, the group chose to travel from Shanghai to Beijing by high-speed rail. At 300 km/h, the 1,318 km (819 mile) journey took just over 5 hours. At 21 million, the population of China’s capital city, where the group had the chance to tour the Forbidden City and Great Wall of China, is one of the largest in the world as well.
“We were all surprised by the amount of development in China – not just in the cities but all along the way in between,” Bucur continued. “There were cranes working everywhere, with high rises and residential areas in various stages of development. The juxtaposition with all the money going into development yet this neglect of basic needs – the air quality and water quality are both rather poor – was something we focused on quite a bit.”
While options like high-speed rail and rules about when you can and cannot drive a car depending on your license plate number are small measures aimed at reducing air pollution, the fact that China’s water resources are unevenly distributed poses an even greater challenge since water shortages have reached crisis levels as a result of rapid economic development.
“As a group we were very impressed by China’s focus on using resources to showcase technology like the bullet train, but we couldn’t help but to wonder why they can’t clean the tap water,” Bandyopadhyay said. “The answer is that clean water is not a priority of the government like it is here.”
A visit to LG Electronics highlighted another cultural difference between China and the US, this time having to do with the workforce.
“The head of research and development for LG in China has a Ph.D. from the US and worked as a senior engineer for LG and other consumer electronics companies in the US for years, so the students were able to connect with him,” Bandyopadhyay added. “He was Taiwanese so he was very in tune with both cultures. When comparing the strengths and weaknesses of engineers, he pointed out that the Chinese, who are very good at focusing on a task and finding a solution, are not as good at creative thinking. In the US, the opposite is true. Innovation and creativity come out of the US, and China responds with a ‘me too’ product very quickly that is usually much cheaper.”
While the US will always be on top with innovation, it’s important to remember that new products do not come out every day. You need to improve on what’s already out there in order to compete, and that means you need highly trained engineers with experience in the STEM (science, technology, engineering and mathematics) areas from an early age, according to Bandyopadhyay.
Another notable cultural difference pointed out during a marketing presentation at Ford is that while China does not have “soccer moms” it has “driving moms.”
“Everybody is studying 5-6 hours out of school,” Bandyopadhyay explained. “The kids main energy is on studies, and they are being driven from math coaching centers to piano lessons and then back to the science teacher. When we see that their cultural priorities are somewhat different, this gives a sense of where it is coming from. Children spend double the hours studying in their formative years. It’s a highly competitive society.”
“We tried to cover quite a bit of ground in two very large cities,” Gibson added. “Given that it is still a transitioning economy, the level of access and openness at all of the companies we toured was a little surprising. But on the other end of the spectrum, we also got to see the pains that go along with all the growth.”