After our massively successful trip to China it’s back to the grindstone at Smurfit. Since returning many students are commenting just how close to the end of lectures we are, with essentially only four weeks of classes remaining. While this idea dawned on me several days ago I was heartened to see some of our class presentations this week which were really of a very high quality (they had numbers, they had words, the material all fitted together, they worked!). It would be truly interesting for us to sit down as a class and watch some videos of ourselves presenting last autumn, I’m sure we’ve all really come a long way.
Asides from the few weeks of lectures remaining, we have two weeks of exams and the Capstone project. This project will put us out in small teams into the real world to work with companies on consulting projects. I’m slightly concerned how my body clock is going to react to early mornings as leading in to exam season I’ve started studying into the night-time and waking up late but apart from this I’m definitely looking forward to applying all that I’ve learned. I’ve heard rumours that real companies are more complex than what can be described in 15 pages of a Harvard Business School case study! Anyway, the experience should be a great final hurrah and a real chance to gain experience in a new business sector.
Our MBA class just has come back from a great MBA International trip, “Doing Business in Emerging Market – China 2014”. In Beijing, we had an exciting morning visiting Zynga Inc., a giant social game company named in honor of Zynga, former CEO Mark Pincus’ late American bulldog, which transformed hundreds of millions of office people around the world to genuine farmers through a social game, Farmville and other popular games on Facebook such as Mafia Wars and Zynga poker.
UCD China 2014 – Doing Business in Emerging Market.
Recently, a tiny game – Flappy Bird – developed by the Vietnam-based developer Nguyen Ha Dong, became the special phenomenon in tech world when it climbed to the top 1st free application on both Google Android and Apple Store, a dream of even many giant technology companies which paid millions US dollars for marketing campaigns to get the top position in both Operating Systems (the author who writes this blog is also proud of being a Vietnamese guy who studies at the same technology university with Dong). While many people doubted that the top indie game Flappy Bird on Android and iOS Store can earn $ 50,000 a day, many top games have reached revenue of $ 1 billion. For example, the game Farmville has reached a revenue of $ 1 billion since early 2013 or the recent game, Clash of Clans, generates $ 2.4 million per day from Supercell Studio, a two-year-old start-up game company of Finland with only 95 members. It is quite normal in “the flat world”, a metaphor by Thomas L. Friedman in term of commerce for viewing the world as a place where all competitors have an equal opportunity. I believe that the metaphor is totally right for the mobile market where many developers have an equal chance to be successful from over the world even they are giant technology companies or dependent developers.
Flappy Bird vs. Zynga
During the meeting with the executive managers at Zynga, Flappy Bird story has been referred by my Indian classmate when he asked whether Zynga planned to make some tiny games like Flappy Bird. There are also some questions about ethical issues, i.e., many young people get addicted to the game, leading malnourished and neurological problems. The philosophical answer of the manager in Zynga quite met my moral perspective: “The addiction can happen to any field such as workaholic, alcoholic, Facebook-addicted etc… And individuals have a complete responsibility for their own actions but game developers should also limit time to play game”. Playing game in moderation is good for entertaining and socializing as Zynga stated their mission is “Connecting the World through Games”.
Coming back to the 5-star hotel, New Otani Chang Fu Gong and researching more about Zynga and Pincus, I opened my Google Market Store on my Android Phone and saw that some games from my classmate’s start-up game studio (not Ha Dong) had reached 1 million downloads. It’s amazing! Can it be a second Flappy bird earning $50.000 a day? Standing up to open the window and seeing “the emerging market” outside, I exclaimed: “I have found China and Friedman is right. The world is flat!!!”
The international study trip for 2014 ended last night for about half the participants in the Arrivals hall of Dublin Airport with 34 arriving home after a long days flight from Beijing. The rest of the group will be arriving back over coming days having opted to stay on a few days to explore Beijing and the surrounding region further. There were a lot of tired but happy people collecting their bags and already beginning to reminisce about speakers and companies we visited not to mention nights out in Shanghai and Beijing and the St. Patrick’s Day Ball in Beijing topped off by a late night watching Ireland beat France. More detailed thoughts will follow from participants on the trip but for now all we can say is it went well and much was learned and unlearned and many perceptions and preconceived notions were changed.
Semester two is tough. It is not tough because the workload is greater than Semester one. Nor is it tough because the courses are more challenging. In fact, for a vast majority of the class the workload is lighter for the option modules. It isn’t the obvious things that make Semester two tough. It is the growing realisation of the need to figure out where the next stage of my life, post-MBA, is going to take me. Deciding what and then moving onto the how should be the focus of my time. It is, let’s face it, the reason anyone embarks on an MBA. Whilst some of the academic staff may not wish to admit it, the academic parts of an MBA course are a means to an end. Don’t get me wrong, there is plenty to learn and plenty to stimulate the intellectual curiosity, but the MBA is a springboard into a potentially new and exciting career.
Semester two is tough. There are so many pulls on your time and it is too easy to neglect the longer and longer shadow being cast on a future career. Many will say this is simply down to time management, and there is a certain degree of validity in that assertion. There is more complexity to it, however. Using the year in an MBA is, as has no doubt been noted by my colleagues previously, a unique opportunity to explore a totally different career path. However, this requires a depth of research and contact building that could in its own right be a full time job. Notwithstanding the HR strategies to get you around, the Activity Based Costing in Managerial Accounting and Investment Management classes that leave you mentally exhausted, trying to forge a new career is a considerable challenge.
Semester two is tough. As more and more gets thrown at you from preparing for the trip to China to extracurricular activities to assignments and late night classes, many things can knock you down. The prospect of developing an exciting new career from September is enough to motivate you to keep bouncing back off the canvas. But it is easy to lose track, no matter how often you are reminded of the real reason you are doing an MBA.
As the days get longer and (hopefully) the sun starts to get warmer, it is a great time to revaluate priorities and at the same time maintain the commitments you have made to family, friends and colleagues. That is the challenge.
Yesterday, 61 Smurfit MBA students, two staff members, and two professors arrived in China for a week of cultural immersion, corporate visits, and experiences they will not soon forget. The group began their trip in Shanghai where they hosted a Welcome Dinner, met Smurfit MBA alumni living locally and MBA students from the Fudan University School of Management, and visited CELAP.
Tonight will be their first chance to explore Shanghai. Let’s hope they take advantage and make sure to get enough sleep to adjust to the time change!
Keep an eye on this page over the next few weeks for details of their experience…
It’s scary to think we are nearly half way through the second term. The first term seemed to progress far slower with the workload being quite evenly distributed throughout the week. This term classes are mostly at the beginning of the week, which is presumably designed to allow you time to network with businesspeople and focus on job hunting. While this makes a lot of sense it’s less fun than the first semester when the entire class had similar schedules and we could eat lunch together most days and go to the pub on Thursday evenings.
However all good things must come to an end and the reality is that an MBA is very much an applied degree during which you’re supposed to get outside the classroom and out into the real world to meet businesspeople and work on real business challenges as much as possible. Whatever we are missing in terms of socialising together in recent weeks I’m sure we’ll more than make up for during the China trip which is only a few weeks away.
In my experience travelling together is an excellent way to bond and while going through airports with very little sleep and suffering being away from home comforts can be difficult, such experiences are great bonding and learning opportunities. I think the whole class is really looking forward to the trip (for those with families the sudden burst of freedom might be truly shocking!) and even though I’m sure we’ll all be tremendously jet-lagged by the time we get back we’ll be an even more unified cooperative class for the rest of the year.
It’s strange, even unnerving, to hear a CEO speak about society, about community, about the need to do not just what is profitable, but what is right. Last week our EMBA class heard from Niall Fitzgerald, former CEO of Unilever and corporate success par excellence, on how modern capitalism was failing because of a fundamental lack of values – and perhaps even a lack of morals.
The title of his address, “You Can’t Have Successful Business in a Broken Society,” invited a certain level of skepticism among some of my more cynical classmates. I think it’s fair to say that most of us would see a certain degree of truth in the tired cliché, “nice guys finish last,” and that few would feel the modern corporate environment is a warm, fuzzy place where everyone just tries to be friendly and get along. But I would be confident that Mr. Fitzgerald’s central point reached even my most jaded colleagues – it’s not a question of whether businesses should be more ethical, but that they must be more ethical in order to survive.
In this globalised world, short term approaches to growing profits, using resources or managing workers will simply no longer work, we were told. Gouging customers will merely open opportunities to more reasonable competitors. Today’s factory workers in low-cost economies are also the consumer class of tomorrow’s growth markets. And as for reckless exploitation of the environment – if China’s population were to reach a Western standard of living at today’s rate of resource usage, we will need nine more Earths to meet this demand. Clearly, if a business (never mind humanity) is to survive in the 21st Century, a long-term approach is needed.
Having listened to Mr. Fitzgerald’s address, I don’t think any of my classmates can now doubt his central point. If anything, I think, his cornerstone argument in favour of a long-term, responsible approach to the challenges of the modern era needs to be widened beyond business, to encompass society as a whole. After all, during the boom period in Ireland until 2007, the very banks who are now pilloried for being reckless were being criticised for not giving out enough mortgages. Undoubtedly, business in the West needs to take a good long look at itself. But the same might be said of society in general.
So the second semester has begun and classmates are generally looking and feeling relaxed after a one-month break (possibly the longest period of time any of us will have off for a long time to come). While the second semester brings a lighter course load for some of us compared to the first, most of us are using any spare time to network and find a suitable job for after the MBA. The mandatory courses for this term seem to have a more quantitative slant than those we studied last term but we also have two option modules so everyone has something to feel positive about. In terms of looking forward, the class is already talking about the upcoming trip to China in March, where, being from an Irish school, we plan to strike a balance between hard work and good fun!
One major change this term is that we all have new teams (the classmates with whom you do many of your academic assignments). Most people had really positive experiences with their first semester teams, but classmates are nevertheless happy to experiment with working with new people. After one semester of Smurfit’s excellent Leadership and Development Programme we are all feeling well equipped to deal with whatever the new year throws at us!
One of the first things you notice when you land in Shanghai is how clean, tidy and well run the airport is. I compare this to Indira Gandhi International Airport in New Delhi, India, where, on my last visit two years ago, due to a power failure at the airport, my bags were stuck on the conveyer belt for five minutes. Both China and India are deemed to be at a similar stage of newly advanced economic development, a viewpoint formalized by the acronym BRIC to highlight the shift in the global economic power away from the developed G7 economies towards the developing world. But what is it about China that has seen it surge ahead to become such a dominant force in the world? How is it that the “bicycle kingdom” has the first commercially operated high-speed magnetic levitation line in the world and only the third Maglev line to be operated anywhere? Why is an eminent Professor in China asking us to adopt Chinese names for ourselves, much like Chinese people living abroad are compelled to adopt local names now? Why should BRIC be rightly renamed “Crib”, with a capital C to highlight China’s extraordinary dominance as a developing market?
The China trip was a fascinating experience. Getting to meet the individuals and organisations active in the Chinese market and having the opportunity to question them directly really made the trip for me
While I frequently read about China in the news and the Economist, going to China and experiencing the people, culture and environment first-hand, gave new significance to my prior-knowledge of China.
Understanding, cultures and customs are very important as they provide a context for one’s experiences. But just how important these elements can be to doing business in China was a revelation for me. The concept of “Face” is not hard to understand because, even as Westerners, everyone has face. When equated to Western values, face is very similar to the notion of reputation. Face is a dynamic, which applies to both personal and business relationships in China. Nearly all of the executives that we talked to reaffirmed its importance in Chinese society. It was interesting to note the emphasis westerners paid to this concept.
Corollary to face is the inseparable concept of guanxi or “relations”. Face and guanxi work hand-in-hand.
Similar to the concept of networking in the West, guanxi, was also repeatedly highlighted in various presentations to us. A clear example of guanxi in action was provided by one of the Enterprise Ireland guest speakers. In one incident, a Chinese staff member handed over company IP to his classmate, who was working for a competitor. When asked why he had done this, the response was that my classmate asked for it and so I was obliged to help him out. It may be important to realise that loyalties may not necessarily lie with the person or organisation that pays the bills. Interestingly enough, our Chinese presenter at one of the talks, played down the importance of guanxi to a large extent. While important, not getting “hung up” on these concepts was also an important insight.
While it always helps to know the language of the person that you are doing business with, its true importance was brought home to me during the China trip. I had always seen language as a “nice-to-have” when doing business, as a way to show that you made some effort or have an interest in your business partner. However, it is essential in the Chinese context. Several small experiences during my trip brought this point into focus.
Due to the tonal aspect of the Chinese language, pronunciation becomes particularly difficult for Westerners. At a restaurant in Shanghai, we wanted to order a bottle of water but ended up ordering a bottle of local white wine! Having directions written in Chinese was a time consuming way to get around the big cities.
Note that this level of difficulty was in Tier 1 cities in China. The importance of Chinese in other cities and the countryside was only going to grow.
During some of the presentations, the importance of the Chinese language was also highlighted. The head of multinational in China clearly stated that while he did not speak Chinese, he was certain that his replacement would need to master the language. In fact, he was adamant that to be truly successful in China the emphasis on language was important. I would have been unaware of the extent of the importance of the Chinese language in doing business in China prior to my trip.
Hand-in-hand with the commitment to learn the language was the importance of being based in China. The CEO of a fast-expanding online-business gave us some truly unique insights into doing business in China.
According to the CEO, an outsider in China, the only way to be successful is to work with local partners and staff that you can trust. While this may sound obvious, it has specific relevance in the Chinese context. The CEO pointed out that the Chinese take a long time to warm up to their business partners. He gave us an example of how he won over his secretary’s trust. He made a special effort to go to her wedding and gave a heart-warming speech at it. This gesture, he found, helped him build a lasting relationship with her and others in the company. He is adamant that your business will not grow unless your customers and staff trust you and like you. And this trust can only be established by showing your complete commitment to the business.
The CEO decided to move to China, as opposed to conduct his business remotely. He immersed himself in the local culture and customs, an experience he found rewarding for both his personal and business life. In fact, he even married a local Chinese girl. Not sure if I would go that far to show my commitment to the Chinese people, but the points he made really struck home. As a foreigner living and working in Beijing, his opinions carried a lot of weight with me.
Some other important lessons that I learnt were that signing a contract with a Chinese firm just means that they are now ready to do business with you. Prior to the trip, I would have assumed that once a contract was signed, the deal was sealed. However, listening to some of the people active in the field made me realise that things were very different on the ground. The idea that western business knowledge and education will enable me to succeed in China was also debunked by one of the presenters. Operational challenges are often deep and unique to China (such as the subtle differences between Tier 1 and Tier 2 cities). When cutting back, focusing on deep cuts to non-payroll costs are supported by Chinese staff members. This information is very useful and helps us understand the pride that Chinese people take in their jobs and their perception of how the firm values them.
Some of the key learnings from the trip were on getting the basics right when starting and maintaining a business in China: a) build the relationships first, b) localise your business and technology for the Chinese market, c) invest in recruitment and training, d) prepare “bibles” for each part of the operations, d) reward success among your employees and make it personal, and finally, e) focus, over communicate and stay very close to your competition.
I particularly enjoyed the talk by a leading brand management company based in Beijing. The presenters gave real insights into China’s consumer culture, a lot of which we experienced on the trip. China is a civilisation state and this affects the way in which Chinese people see things. The need to project and protect status is clear in present day Chinese society. Expensive cars and western influences abound. Yet, these influences have a distinctly Chinese feel to them.
China’s modernisation does not mean westernisation!
Like inhabitants of many countries, Chinese people are interested in accumulating wealth. In fact, they are now moving from “Show” to “Show you know”, phrases that hint at an interesting dynamic in the need to project wealth while maintaining some level of self-respect. Like many Asian countries, there is a strong emphasis on providing the best possible education for the next generation, “Baby MBAs” being the latest fad on mainland China. Unique to China was the importance of fitting in. According to one of the surveys presented, 86% of the Chinese people wanted to fit in. The concept of “soft-individualism” was also very unique to China. Stand-out but don’t stick-out was thought provoking. The idea of not sticking-out in the Chinese concept was new to me. I hadn’t considered the importance of being part of a group to Chinese individuals and this was an important learning point that is sure to help me in any future dealings that I have with Chinese businesses. Looking at the levels of motivation through the prism of a) me, b) we, c) the world also provided a unique view into the Chinese mindset.
While I continue to be impressed with China’s progress to date, I can’t help but feel uneasy about the way Chinese society is structured. The lack of religious and political freedom made me uncomfortable.
In fact, the influence of the Communist party in all aspects of public and private life repeatedly surfaced in the many talks that we attended.
One of our presenters stated that he was happy to have an open and frank discussion about their business. Yet he asked people not to tweet or blog about any conversations we would have. He half-jokingly said that he had family in China and he did not want to upset the authorities. The meddling nature of the government was also brought to light in the way in which the central government dictates the laws to be implemented. The case of the 70-90 rule, where 70% of the apartments being developed had to be under 90 square feet, is a case in point. Foreign and local developers active in China were given little prior notice before the law was enforced. This uncertainty in the business environment makes it very difficult to do business in China.
Corruption is a massive issue in China and a few of the presenters hinted at its adverse effects when doing business in China. During a frank discussion over dinner with one Irish engineer that works locally in China, the level and extent of corruption was laid bare. A reporter’s experiences with Chinese authorities also left a lot to be desired.
Overall the Chinese trip was a fantastic experience in which I gained insights into doing business in China that I would not have otherwise experienced.
Soon, we’ll have the opportunity to undertake one of the most eagerly anticipated elements of our course: the class trip to China. (Meanwhile, some of the class will be venturing to sunny Brazil.) Apart from experiencing a tourist’s perspective of this vastly contrasting culture, we’ll enjoy many insights into the possibilities and challenges available in China for a foreign investor. Gaining these insights will offer not only the basic knowledge and skills necessary to succeed in this particular business environment, but will perhaps challenge some of our long-established convictions regarding the most efficient methods of operating a business or an economy. In many ways, the experience might even humble us.
The Chinese environment is often portrayed in literature as too complex for our understanding, so the task of comprehending it adds to its fascination. Witnessing the Chinese people in their own environment should yield unexpected observations, and might even deepen our appreciation for the might of their civilisation. During our first session of preparation for the class trip, we were treated to a number of presentations. One of the most striking phrases spoken by a speaker referred to China as “re-emerging”. Indeed, China is attributed with inventions such as silk, cast iron, pottery and the fork, introduced at the time when Europe was struggling to catch up as an emerging civilisation.
It seems that modern China’s complexity has resulted from the intertwining of a traditional, almost centralised economy, initiated by Mao’s ideals, and the modern global business environment, along with its pressures and opportunities. Nevertheless, for some believers in Marxism, China represents a glimpse of hope, though, to many more, it seems a land of commercial opportunities, demonstrating some of the symptoms that the USSR and its communist party suffered prior to its collapse. This complexity is further intensified by the extreme diversity evident throughout every aspect of Chinese life and land, including language, customs, landscape and even climate. The north typically experiences sub-zero temperatures in winter, at the same time it would be possible for a person to sunbathe in the sub-tropical south.