School aims to bring international business management expertise to its students

Boardroom veterans and big shots mingle in the green room of the Beijing business conference, exchanging cards and talking shop while they wait for their turn to deliver a speech or lead a panel discussion.

Appointments are casually penciled in. The powerful hold court, and the ambitious and the aspiring seek favor.

Rail thin and refined, Asia-based academic Professor Hellmut Schutte chats amiably with a sharply-dressed Chinese businessman.

"He was the chairman of one of the Big Four Banks," says Schutte as he moves away. "Every big story about the financial industry in China, he will be involved."

It often said that when it comes to success in business, it about who you know, as much as what you know.

After decades in the game, Schutte ticks both boxes, and then some.

Arguably, when it comes to analyzing some of the challenges and opportunities that lie ahead for China, and how they may relate to markets in Africa and beyond, Schutte is a man worth knowing.

And the 69-year-old, who has been working in Asia on and off since 1972, is not coy about sharing his opinions and predictions.

He believes, for starters, that there is a huge vacuum in management education in Africa outside of South Africa.

And with Chinese companies increasingly looking to bolster their foreign enterprises with local talent, opportunity is knocking.

He also believes the historically low success rate of Chinese companies abroad should not necessarily be seen as a weathervane for how these ventures will fare. In the not to distant future, he says, more Chinese companies could be strong contenders in the global arena.

Schutte argues a big factor that determines the failure or success of Chinese companies investing overseas, including in Africa, boils down to decisions made.

This in turn, he says, comes back to management.

And the business of management, or more specifically teaching it, is Schutte's business.

German-born Schutte is a self-professed old breed of academic, in that he earned his stripes at the coalface before moving into teaching.

He is now a distinguished professor of international management, the vice-president and the dean at the China Europe International Business School.

Schutte also serves as an emeritus professor of international management at Insead, a leading international business school he joined in 1981 in Fontainebleau, France, after an 11-year career in marketing and investment banking.

CEIBS is not only in the business of making international business leaders in China, but also has a campus in Accra, Ghana.

"It (the campus) is a way to follow Chinese investment practice in Africa," he says. "There is a huge vacuum in management education, except in South Africa. We saw a need there."

While Schutte is unequivocal in his assessment that Europe and the US would remain the most important markets for China, he says Africa will present "an interesting prospect" for many Chinese investors and businesses, particularly those in the raw materials and construction sectors.

CEIBS aims to bring international business management expertise to Africans keen to jump on employment opportunities that foreign investment may bring. It also services the large number of African students who come to the school with entrepreneurial aspirations, and want to go into business for themselves.

"We bring them (our African students) an international education," he says. "We have two faculty members from Africa, both from Ghana, both Harvard educated. Otherwise we bring in faculty members from China, who could be Chinese or British or whatever.

"It's good that there is a transfer of knowledge from China to Africa."

Like a host of nations around the world, many countries in Africa are now tethered to China's economic fortunes.

Schutte goes so far as to say an evolution of management style will be important for China's prosperity as it makes the transition from a manufacturing, exports-based economy, to a consumer and services-based one.

"The hard subjects of management, (like) accounting, finance, manufacturing, operations and logistics I would venture to say are where Chinese companies are very good. When it comes to the soft aspects of management, I would think multinational and Western firms are very good: (Things like) marketing, innovation, creativity, human resources and leadership in the general sense.

"If you ask most Chinese people to tell us what mangers do, I think they would all first of all say we have 'to control our people.' If you would ask the same of Western managers, I think they would all say, 'to motivate'.

Schutte argues making employees stakeholders and innovators is key to success in the services sector, and that will require a big shift for many Chinese companies.

"It's a huge step," he says. "As soon as you move to something more sophisticated, you need the buy-in and the spirit and the energy of these people. You have to let them free. They have to innovate and they have to think outside the box and they have to come up with things.

"They (Chinese managers) have to change. They have to change from control to motivation."

While Schutte is confident the evolution of management style in China is moving in the right direction, he warns there are pitfalls and hurdles ahead.

One of the big ones, he says, is that China is too focused on closely emulating the style of corporate structure and business practices common in Britain and the United States.

He believes China should consider evolving toward a model closer to that practiced in Europe.

"The US and UK model is much more streamlined and profit driven and short term.

"I think China is totally wrong to aspire to have companies which are shareholder driven. It just doesn't fit with the history and the political set-up today."

Schutte says the European model, which he characterizes as employee or stakeholder driven, is more appropriate for China.

"I think the stakeholder-driven model is what China is all about."

He holds up the example of telecommunications giant Huawei, which he says has struck a good balance between the Chinese and European corporate structures and management models.

"Huawei is, I think, worth $30 billion," he says. "They are all over the world, and 60 percent of their sales are outside China. They have been able to develop their own very interesting style, very in line with Chinese people but still inspiring their own people. Most of their staff are shareholders."

Right now, Schutte says the level of competition in China's domestic market should not be discounted as a factor that will eventually underpin the success of Chinese ventures abroad. He also points out that multinationals lost a lot of money when they first ventured into China.

"China opened the market (to international competition) amazingly early," he says. "If you compare it with Brazil or India or Indonesia, none of these countries have done this in such a dramatic way. Fundamentally, with the exception of the telecom industry, multinationals can go into all other industries. That has, I think, accelerated the development of these industries quite substantially.

"Chinese companies, even within their own territory, see something like international competition. That, over time, will make them much more formidable in the global arena than the Koreans and the Japanese."

Schutte's vision for CEIBS is very much in line with China's current focus on global expansion and investment abroad. The school's presence in Africa is part of that vision.

"I'm trying to position our school here as the leading international business school within China, and to become the leading international business school from China.

"The outside world is amazed that these Chinese companies dare to invest in their country. Just imagine an academic institution (from China) acquires an academic institution somewhere in the world."

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