Corporate social responsibility is more than a trend. It is a mind-set that will not vanish.
The CEIBS Campus Zurich, Zurich Institute of Business Education's strong commitment to CSR is also reflected in its PRME accreditation (Principles for Responsible Management Education). For companies and individuals who share this view, CEIBS Zurich Campus offers global elective programmes (part of the CEIBS Global Executive MBA) that have a clear focus on these issues.
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Senior executives from PwC, Nestlé and Fischer AG joined CEIBS Vice President and Dean Prof. Ding Yuan for a panel discussion on the Chinese economy at the Zurich Campus this evening. Moderated by CNN Money Switzerland anchor Martina Fuchs (right), the event was titled “China after the 19th Party Congress: Intent & Reality – What to Expect” and it attracted more than 70 participants.
Joining Prof. Ding Yuan on the panel was Felix Sutter, Partner and Head of Asia Business Group at PwC Switzerland, who is also President of the Swiss Chinese Chamber of Commerce (SCCC); Joe Mueller, former head of Nestlé in the greater China region; and Yves Serra, President and CEO of Georg Fischer Ltd.
China’s transformation from a manufacturing-based economy to one driven by consumption and services was noted by Prof. Ding Yuan. He also spoke about the growing importance of the emerging market consumers in Asia in driving economic growth around the world. He said he expects that by 2030 there will be around 3 billion middle class consumers in China, Southeast Asia and India. Mr. Mueller said he expected China will soon be one of the world’s most sophisticated markets, and he expects that China’s economy will remain stable over the next five years.
The differences between the Chinese and the US markets were also discussed. Prof. Ding Yuan said the obvious difference between the two is that the US has always been a free trade nation, but seems to be crawling back from that principle lately, while for China it is the opposite. Mr. Sutter noted that besides these differences, technology is also playing a role in how the two economies are evolving.
Following the panel discussion participants had the opportunity to network while celebrating the Chinese New Year with a buffet of special Chinese dishes.
(January 29, 2017. Zurich – Author: Janine M. Coughlin)
Headlining a CEIBS Executive Forum for an intimate gathering of academics, diplomats, students and alumni, former Prime Minister of France Jean-Pierre Raffarin expressed concern that the world has become less safe.
“In all my 40 years in politics I’ve never seen the world this dangerous. Unlike my parents and grandparents who had seen war, I was born in a generation that trusted the world. We saw French and Germans talking together and we saw growth and we thought – if these two peoples could talk – wars would be impossible,” he said. “But look at what’s happening today. Can I really tell my grandchildren war will not happen? When I hear [US President Donald Trump’s comments on North Korea at the UN], when I hear religious fanatics, can I really say war is no longer possible? War will only become impossible if we make concerted choices to make it so.”
In his impassioned defence of multilateralism Raffarin hailed the China-led Belt and Road Initiative (BRI) as a landmark project that will provide stability in an unstable world. And he urged France and other countries in Europe to “get on board”. He concluded that “peace is when we are all working together around the table; it’s about real multilateralism. That’s what’s good about the BRI.”
The BRI, Raffarin said, it would be naïve to believe China does not stand to gain from the project it conceptualised (to find a solution to its overcapacity issue, pave the way for internationalisation of the RMB, strengthen its position in Asia while building relationships in Europe and Africa).
But he also stressed that China’s gain does not mean others will lose. “Xi Jinping is not building a project for France, Ireland, Kazakhstan; he is launching an initiative that’s good for China and will serve to nurture China’s ambitions,” said Raffarin, who represented France at May’s historic BRI talks in Beijing. “But the BRI is about cooperation. It’s not built by one country for another, in isolation. It’s all about cooperation.”
He was critical of Europe for being slow to embrace the initiative, which he sees as a “genuine opportunity for the region to position itself as a mediating point between Asia and Africa”. Building on common goals, such as those outlined in the Paris climate change accord, he said, and Europe’s experience in building smart cities, they could work with China on creating smart towns. This would move both sides forward in terms of productivity, the fight against pollution, mobility, more effective energy management, green tech, etc., he said. He urged France, in particular, to act now. “The BRI is fundamentally important for France. What are we waiting for? Let’s sit down with the various partners to make this a reality,” he said.
(Read an extended version of this post on ceibs.edu)
„1+1“ is a new project. Can you tell us something about what this project has achieved thus far? Could the engagement with the CEIBS international community be strengthened?
Zhang: The “1+1” program is designed to strengthen CEIBS’ reputation through the interaction between alumni and prospective students in the international community. Each participant is encouraged to bring with them [an additional guest] or ‘plus one’ who is a qualified prospect for our MBA, GEMBA or corporate programs.
Ding: Who better to recommend CEIBS than those who know it best? Our alumni are our best promoters. In Europe, however, promoting CEIBS is still a challenge, because the school is not yet well-known here. Similar „1+1“events have only recently taken place in Taipei and Hong Kong. Two other events will be held during the coming week in Singapore, and then also in Accra, Ghana.
What feedback have you received so far?
Ding: Taiwan and Hong Kong were very successful. What I have learned is that our name [CEIBS] is a remarkable advantage, but particularly so in the Asia-Pacific region. Even in Hong Kong, where we have strong competitors, we are doing well. People are coming to the events, and we receive excellent feedback. The participants enjoy the lectures, and they compare these to other business school experiences.
Recently, we had a participant, a lady who was a graduate from Wharton and who was working as an investment banker in Hong Kong. Out of curiosity, she came to the event—and afterwards, she was convinced that she should join our GEMBA program. One thing I said moved her a lot. I said that our lecturer that evening was great, but that we had thirty more of such top faculty members. In addition to our top faculty, prospective students also value the relationship the school has with its alumni.
The topic of this „1+1“ lecture is Chinese Foreign Direct Investment, or FDI. Also, Mergers & Acquisitions has been a hot topic for a couple of years. How can a business school prepare its students for big international deals such as Chem China with Syngenta or the „Dalian Wanda case“?
Zhang: Simply put, in three ways: first, through the textbook knowledge and conceptual framework taught in the classroom. Second, through case studies on previous M&A deals. Third, students may share their experiences and learn from one another in the classroom setting.
Ding: I must add that we did not have any M+A courses before 2012. But even then, there was a demand for such courses. We then invited professionals as visiting professors, but this attempt failed because there was no teaching structure behind it. Sharing an experience is not teaching.
So, from my own personal interest, I suggested to Prof. Zhang that we develop a course. At that time, I was involved as a consultant in different companies and in different M+A deals, and we used our experience, went through the books and developed the course from scratch. It was immediately well received. Two years ago, we reached a peak: we taught the course eight times. In the meantime, we have established a research center with a multi-disciplinary approach and have written almost thirty cases.
The cases have been published, and are being translated into English. This September, we will expand the course and include various new aspects regarding cross-border M+A.
Interview with CEIBS Dean Prof. Ding Yuan and CEIBS Prof. Zhang Hua
How big is the risk for a Chinese enterprise today if they invest abroad?
Ding: Just today a paper in Hong Kong published an article I wrote with the title: “The failure rate for cross-border acquisition is 90%. How to become the other 10%?” Failure means you do not reach your goals. The fact is, according to a big survey, 70% of companies could not reach their targets after a merger. When you consider cross-border mergers, you must add another 10 % to this number. Considering that most Chinese managers have no experience whatsoever in cross-border M+A, you must then add another 10%. So, considering this high failure rate—we, as a school have a kind of social obligation to help the companies both for M+As at home and in host countries.
Zhang: I think one risk is also to overpay. Another one is to lose the original management, which in many cases is key to the success of post-acquisition integration.
Since the end of 2016 no state group may invest more than 1 billion abroad. How shall one interpret this decision of the Chinese government?
Zhang: In my view, such a regulation is mainly due to concerns about the outflow of the foreign capital reserve in China. Once exchange rates are stabilized, there will be deregulation. Certainly, the limit will be lifted sooner or later. Regardless of the limit, however, companies will still continue to receive preferred treatment by the state-owned banks, and receive low-interest rates.
Ding: I also think this is a temporary measure. The market was too hot and the government started to worry. The main worries were the failure rate combined with the currency drain. Of course, if somebody has a short-term view on what happens, the situation might seem critical, but let us consider a global and long term perspective: the global M+A market is worth 4.5 trillion USD. Only 30% of the mergers are cross-border transactions (1.5 trillion). Now you take the Chinese numbers: last year everybody thought that 170 billion USD was a huge number, but it only amounts to maybe 15% of the global cross-border investments. When I read these numbers, I looked at the stock of Chinese overseas investments. The stock is merely 20% of the French stock--and then you look at the size of the Chinese economy. China has just started, and that is the reason why the number is high and that is also the reason why we, as a school, are so strongly committed to supporting companies in this matter.
How would you distinguish Chinese FDI in the U.S. from investments in Europe?
Zhang: I think it is easier for Chinese companies to find good brands and good technology in Europe at a relatively low price, compared to the U.S. In addition, the “one belt, one road” is also a reason.
Ding: There are two things. One is the complementarity of China and Europe. You see more synergies between China and Europe because the goals in life seem to be similar. Let us look at European entrepreneurs, for example. Many have the dream of their company becoming a legacy. Chinese entrepreneurs have the same dream. In the United States, the affection for the business in general is lower: you make your business big, sell it and become rich. But I really feel that there is an easy relationship between Chinese and European entrepreneurs.
If you bring Chinese executives to Victorinox, a family business founded in 1884, and compare this with a Silicon Valley company which has just recently been founded and sold shortly thereafter for millions—then for Chinese executives the latter is just a boring story. On the technical side, one also sees a lot of complementarity. China is by far a manufacturing place and they do not want to abandon, but rather upgrade their businesses.
That’s the reason why the only place to get inspiration is the triangle of Switzerland, Germany and Austria, where one finds this high-quality manufacturing. There is another place like Germany--and that is Japan--but it does not work for us to bring executives to Japan. Japan is a closed society and they unfortunately do not want to collaborate that much.
Here in Europe however, people are neutral towards the Chinese and many see the cooperation as something positive. In the USA, the perception is mainly negative because they see China as a challenger. The Swiss do not care about this, but rather wish to work with companies and people with whom they can make a deal. Europe is an open-minded continent. That makes it a more favorable area for Chinese companies to expand.
Can you make a prediction about the future of Chinese FDI?
Zhang: The Chinese economy will continue to have a high growth rate in the future and Chinese consumers will also continue to demand more high-quality products and services. FDI, with the purpose to upgrade Chinese firms’ competencies, will grow accordingly. We call it a consumption upgrade: not only consumer goods but also the demand for industry goods will spur continued growth.