Eastern Exposure

By establishing an institute in Suzhou, the University of Dayton provides its students and faculty with a home base from which to experience China’s rapidly evolving market.
Eastern Exposure

IN 2014, THE INTERNATIONAL MONETARY FUND declared that China had supplanted the U.S. as the world’s largest economy—the first time the U.S. has failed to hold the top spot since 1872. This presents a challenge for business schools in other parts of the world: How can they make sure that their students understand what it means to do business in China? A few have partnered with Chinese institutions to build campuses such as Duke Kunshan University and Xi’an Jiatong Liverpool University; some have recruited Chinese students and faculty. Most have relied heavily on study abroad and student and faculty exchange programs.

The University of Dayton School of Business Administration in Ohio had another option. In 2012, our university opened the UD China Institute (UDCI) in China’s Suzhou Industrial Park (SIP), an economic development project of the Chinese and Singaporean governments. In the UDCI’s first two years, it operated training programs for nearby companies and offered high school courses to Chinese students who would be attending college at UD. Starting in 2014, the UDCI began to serve as a year-round training lab where the schools of arts and science, engineering, and business offer students an immersive educational experience in China.

Most important, because the UDCI does not grant degrees in China, its activities do not need to be approved by the country’s Ministry of Education. The UDCI mirrors a campus environment while avoiding the extensive partnerships, additional costs, and government oversight that a formal satellite campus would require.

HIGH EXPOSURE, LOW COST

The university chose SIP as UDCI’s location because the park’s representatives were willing not only to help develop the facility to the university’s specifications, but also to invest funds in its renovation. To attract the university, they even waived the rent for three years. Their motivation? SIP officials want to attract a mix of educational, commercial, and research-based clients to the park in order to create a culture of innovation among its residents. They envision SIP—which, at more than 100 square miles, is more small city than industrial neighborhood—as becoming China’s equivalent to Silicon Valley. An hour’s drive from Shanghai, the park includes not only corporate offices, but also schools, recreation facilities, hotels, restaurants, apartments, and natural lakes.

UD’s five-story, 68,000-square-foot facility is located in SIP’s BioBay section among 275 high-tech companies; it features classrooms, as well as eight science and engineering labs. Students and faculty stay in subsidized, furnished apartments nearby. UD leased the building until 2014, when it was able to purchase it thanks to a US$7 million gift from Fuyao, a Chinese manufacturer of automotive glass with a plant in Dayton.

Thirty-five students from business, engineering, and the arts and sciences traveled to Suzhou in 2014 for semesterlong programs, and about 60 signed up for the summer. The students were almost equally split among the schools, and even included several from China who were at UD on F1 student visas and wanted to spend the semester in China with their American friends.

It typically costs students no more to spend a semester at the UDCI than to attend courses on the Dayton campus. The business school offers several three-credit undergraduate business courses at the UDCI, all taught in English, including those in statistics, macroeconomics, microeconomics, marketing, and organizational behavior; engineering and arts and sciences also offer a range of courses, from thermodynamics to Chinese language and culture. Their content is equivalent to that of courses on UD’s campus, but UDCI courses are augmented with visits to multinational companies such as Black & Decker, Delphi, Ford Motor Company, and Eli Lilly, as well as Chinese companies. The university has entered educational and research partnerships with six U.S. companies with SIP offices.

Most classes are taught by UD faculty, and a few are taught by Chinese adjuncts. Fall and spring semester courses are considered part of our faculty’s standard teaching load. Faculty who teach in summer programs receive additional compensation. The business school covers its faculty’s housing, travel, and a daily per diem.

The primary difference between teaching on our main campus and teaching in China is that a “semester” at UDCI lasts for just six weeks, because each course is delivered in an accelerated format. That means that faculty can spend the remaining weeks of the standard semester in China collecting data for research or collaborating with faculty at Chinese universities. So far, we have had no trouble finding professors who are interested in taking advantage of the opportunity to teach and conduct research in China.

COMPETITIVE EDGE

A proliferation of global brands is entering China, from Walmart to McDonald’s to Carrefour. These companies provide endless opportunities for our faculty to bring textbook principles to life. In addition, courses from all three UD schools are open to students in other disciplines, so that students from engineering and arts and sciences might take introductory courses in marketing or economics, while our business students can take arts and sciences courses on Chinese culture, language, or business ethics. Company visits also are organized so that all UDCI students can participate, even if they’re not taking the course involved. We have designed the curriculum so that students from all units interact inside and outside the classroom.

In spring 2015, School of Business Administration faculty also launched an interdisciplinary case competition inspired by China’s evolving marketplace. Students at both the UDCI and the Dayton campus were invited to take part in the inaugural SBA Case Competition, which asked them to tackle a real-world problem facing Ford Motor Company. As a relatively late entrant into the Chinese auto industry, Ford has seen its market share grow tremendously in China in the last decade. Ford has increased its manufacturing capacity and accelerated product introductions; it also introduced the Lincoln luxury business in 2015.

However, Ford is concerned about pending government legislation that will target China’s environmental woes and reduce the country’s demand for imported oil. The legislation would create the world’s toughest environmental controls, while mandating the most ambitious targets for sales of hybrid, plug-in hybrid, and pure electric vehicles. But the mandate doesn’t take into account the fact that China’s crowded, traffic-locked cities do not have an infrastructure designed for electric vehicles—where, for example, would a resident living on the 20th floor of an apartment building plug his car in at night? Moreover, Chinese consumers are particularly price-sensitive. The entire auto industry is struggling with how to meet these challenges.

In January 2015, Ford China CEO John Lawler met with our students at the UDCI to explain these problems in his own words. He challenged students to think creatively, but cautioned them that Ford does not have unlimited resources to throw at the problem. That briefing was recorded and played back for students on the Dayton campus a week later. Students from all disciplines were invited to form teams to enter the competition, and the business school provided US$11,000 in prize money. In all, 75 students formed 18 teams to work on the case for the entire semester. Each team could use any resource, except for current or former Ford employees, to prepare a 15-minute presentation of its analysis of the problem and a proposed solution.

A panel of judges—which included an assistant treasurer from Ford’s headquarters in Detroit, Michigan—evaluated the presentations and chose five finalists to compete in the final round in mid-April. Interestingly, all five teams came from the Dayton campus; despite being on the ground in China (or perhaps because of it), no UDCI-based teams made the finals.

The winning team’s conclusion? That Chinese consumers’ anxiety over the range of the electric vehicles and China’s lack of charging infrastructure were problems too great for Ford to overcome—at least for now. Instead, the team recommended that Ford own a fleet of electric vehicles and implement a short term car-sharing program in major cities. With this solution, the consumer could avoid the high costs and inconvenience associated with vehicle acquisition and ownership, and Ford could both enter a profitable market and convince consumers that electric vehicles are a viable alternative to traditional vehicles, setting the stage for growth in the future.

EXPERIENTIAL LEARNING IS NOT EASY TO EXECUTE, ESPECIALLY WHEN IT INVOLVES AN INTEGRATION OF CLASSROOMS ON DIFFERENT CONTINENTS, A COMPETITION, AND REAL CLIENTS.

This solution wasn’t what Ford executives had in mind—they had expected solutions that involved selling more hybrid vehicles. But the judges viewed the team’s unexpected analysis as well-thought-out and well-defended.

> We now look forward to this spring’s new competition, for which GE Aviation, based in Suzhou, will submit the problem and judge our students’ solutions. This January, the UDCI also launches a second competition called “Entrepreneurship in China,” a 90-second elevator pitch contest open to Chinese students at partner universities. The students will compete for $5,000 in prize money, and two members of the first-prize team will receive tickets to Dayton to compete in the final round of UD’s 10th annual business plan competition, where they will vie for a $25,000 grand prize.

LEARNING FROM EXPERIENCE

The creation of UDCI’s curriculum and competitions was sparked by a need to provide our students with immersive experiential learning opportunities in China. But experiential learning is not easy to execute, especially when it involves an integration of classrooms on different continents, a competition, and real clients. To coordinate these elements, the UDCI is led by assistant provost Weiping Wang, who has managed UD’s presence and recruiting efforts in China since 2002; the institute’s activities are coordinated on the university’s Dayton campus by a team that works closely with the offices of student housing, student development, and IT. Because it costs less to run the UDCI than to run a formal overseas campus, the university passes these savings on to its students in the form of airfare and in-country excursions.

A team of three associate deans—one each from the schools of business, engineering, and arts and sciences—also meets once a month to plan future UDCI programs. These meetings provide opportunities for the business school to collaborate with other departments on campus. As a member of that team and the coordinator for the competition, I made two 48-hour visits to Shanghai last year to kick off and conclude the competition. I also presented the case to students on the home campus.

We still view the UDCI as a startup—we expect demand to rise as more students learn about the opportunity and as we offer more programs at the undergraduate and graduate level. But for schools like ours, with limited resources, a facility like the UDCI offers an invaluable yet cost-effective way to have a foothold in the global markets that we most want our students to experience. Through the institute, we can expose students to Chinese language, culture, and history, all while they complete courses related to their majors and work on real-world global business challenges. It also provides us with opportunities to engage in meaningful innovation, impact, and engagement with our students, international markets, and the business community.

Terence Lau is associate dean of undergraduate programs at the University of Dayton’s School of Business Administration in Ohio. To learn how another business school established a cost-effective presence in a foreign market, see “Casa Confidential” in BizEd’s January/February 2013 issue. The article details how Milsaps College of Jackson, Mississippi, built a self-sustaining learning center in Merida, Mexico.