Introduction

In 1991, nine universities inaugurated mainland China’s first permanent Master of Business Administration (MBA) programs. By 2006, there would be 100 such programs in the People’s Republic (PRC), while by 2015 the number had reached at least 236.Footnote 1 On one level, this explosive growth testifies to a long history of Chinese engagement with the concept of “scientific management” (科學管理) over the twentieth century. As I am exploring in a larger book project, this engagement took root in the early Republican era primarily through transpacific circuits of translation and knowledge exchange led by figures such as the industrialist Mu Xiangyue (穆湘玥) and the academic Yang Xingfo (杨杏佛). “Scientific management” had continued to shape both Nationalist and early PRC state planning before the Great Leap Forward (1958–1962) and Cultural Revolution (1966–1976). In this light, the Reform-Era revival of management education represented a return to modernizing and developmentalist practices that had been derailed by the ideological excesses of the Mao era.

On another level, these business programs posed a paradox. Although PRC officials have long considered education a culturally and politically sensitive area, these MBA programs were heavily derived from U.S. models and often established in partnership with American universities. From their curricula and case-study methodologies to even teaching from the same textbooks, their academic content was heavily American in origin, while the funding also often came from overseas, including from Hong Kong-based alumni of these U.S. institutions. As such, the revival of management education in the PRC could also be seen as state-sanctioned overseas and capitalist influence.

This chapter is a first attempt to explore the revival of management education in Reform-Era China. Previous scholars have emphasized the role of foreign expertise and transnational academic exchange in the Reform Era’s restoration of higher education.Footnote 2 In turn, scholars have also studied the evolution of grassroots management practices in factories, state-owned enterprises (SOEs), and new private firms.Footnote 3 Yet scholars have not examined the concomitant revival of management education as a key component in the reform process. This chapter is a first attempt to fill that gap. In so doing, it seeks to advance new links between scholarship on the Reform Era and Sino-U.S. relations, incorporating increased attention to non-state actors and flows in both fields.

The first section explores the earliest initiatives to revive management education and the entwined discourse of management as a “science.” While Tsinghua University opened a Department of Management and Information Systems in 1979, elite universities did not lead this revival. Instead, a broader spectrum of government agencies, state-owned enterprises, and technical institutes spearheaded the most influential efforts to retrain mid-career managers in both the Chinese Communist Party (CCP) and industry. With political support from Bo Yibo (薄一波), for example, the First Ministry of Machine Building hired an MIT PhD student in 1979 to organize a management training program for its cadres, ideologically disguised as “systems engineering.” Simultaneously, with the establishment of the Chinese Academy of Social Sciences (CASS) in 1977, a number of rehabilitated economists and state planners, such as Ma Hong (马洪), Jiang Yiwei (蒋一苇), and Xu Dixin (许涤新), gathered and spearheaded new research and training in “management science,” including the first new management textbook to be published since the Cultural Revolution.

In the second section, I explore the renovation and expansion of management education at China’s premier universities over the late 1980s and 1990s. Focusing on Tsinghua and Fudan, I analyze a substantial evolution in the content, structure, and pedagogy of these programs as they developed a transformative partnership with MIT’s Sloan School of Management. Leading figures in this process, such as Zhu Rongji (朱镕基) and Zhao Chunjun (赵纯均) at Tsinghua or Zheng Shaolian (郑绍濂) at Fudan, had previously approached management from mathematical and engineering perspectives. Yet, with the formation of the MIT-China Management Education Project (MEP) in 1996, they began to incorporate American-modeled courses in topics such as leadership, entrepreneurship, and finance. In particular, the MIT-China MEP helped to revamp these programs by sponsoring Tsinghua and Fudan faculty to study at MIT and subsequently transfer whole courses and textbooks into China. Through the National MBA Education Supervisory Committee (全国工商管理硕士教育指导委员会), which disseminated this content throughout Chinese management education, these renewed transpacific circulations of translation and exchange in their turn had an even more scaled impact than in the early Republican era.

Restoring “Science” to Management, 1978–1984

As Chinese officials and economists began to experiment with Reform, most sought to loosen state control and increase autonomy and accountability in an economy that would remain fundamentally state planned. Yet, as scholars have stressed, there was no master plan and reformers continually debated over how best to pursue the Four Modernizations, with debate particularly active throughout a web of new economic think tanks.Footnote 4 Due to the traumas of the Cultural Revolution, however, a basic logic embedded across the reformist spectrum was shifting Chinese industrial management priorities away from political ideology and toward facts, efficiency, and ideals of science. Put simply, many officials and economists had concluded that the Cultural Revolution’s prioritization of ideological correctness had encouraged gross incompetence and waste throughout the nation’s enterprises. Yet, as Andrew Walder has stressed, we should recognize that Mao-era ideals of management were not necessarily incompetent. Instead, they charged cadres with different goals, such as enforcing ideology and sometimes ensuring community welfare.Footnote 5 Thus, while macro-scale policy shifts have drawn the lion’s share of scholarly attention, a more mundane but equally vital aspect of the Reform Era was the widespread retraining of ordinary managers throughout the party and thousands of SOEs. This shift not only reversed ideological precepts engrained since the 1960s, but also interwove two of the Four Modernizations by reapplying notions of science to industry.

One institution where these ideas were pressing was the First Ministry of Machine Building or Yijibu (弟一机械工业部 or一机部). Under socialist planning, heavy industry had been organized under a dizzying array of national ministries, the military, and provincial authorities. The Yijibu was one of the single largest pieces in the civilian industrial sector, supervising the production planning, allocation of materials, and daily operations of thousands of factories and millions of workers across the PRC, producing everything from trucks and tractors to blast furnaces, automobiles, and consumer products. In turn, the Yijibu also ran its own educational system of colleges separate from the Ministry of Education. These colleges focused on engineering and industrial management, including the Shanghai Institute of Mechanical Engineering (SIME, 上海机械学院) and the Harbin Institute of Technology (哈尔滨工业大学). As such, the Yijibu had a vast and unwieldy portfolio of responsibilities and reformists quickly grasped this behemoth’s need for reorganization and increased efficiency.

Yet the Yijibu’s bureaucracy was deeply entrenched and foreign “management science” sounded very much like capitalism. As such, the decision was made to tap a foreigner and rephrase his teaching assignment. In the fall of 1978, Yijibu officials approached a young MIT doctoral student studying in Beijing named Joseph Battat (巴塔特) about starting a program in “systems engineering” at one of their colleges. A Lebanese Canadian citizen, Battat had previously worked as an engineer at IBM before pursuing his doctorate in international business and economics at MIT Sloan under Richard “Dick” Robinson, a pioneer in the study of adapting American corporate management for international contexts. With Robinson’s aid in securing a Canadian fellowship, Battat traveled to China in early 1978 to study Marxist political theory on exchange at Peking University in order to understand different approaches to economics. Fluent in Chinese and versed in the political rhetoric, Battat was well situated in Yijibu officials’ eyes. He was bilingual and knowledgeable about computers—a key area of interest—but also available, willing, and politically expendable should it all fall apart.Footnote 6

Yet any educational program requires resources and in 1978 that meant high-level political approval. Behind the Yijibu’s initiative was Bo Yibo, recently rehabilitated by Deng Xiaoping and soon to be appointed the Vice-Premier in charge of the economy. In October 1978, the director of the new Hong Kong and Macau Affairs Office and longtime Bo ally Liao Chengzhi (廖承志) met with Battat and senior Yijibu officials. Acting as Battat’s “houtai” (后台) or handler on Bo’s behalf, Liao instructed an Yijibu deputy ministry to provide Battat with all the materials he might require. The task was a mammoth one. Battat first spent three weeks touring the Yijibu’s factories and universities, before returning to Beijing to report to Liao Chengzhi. He delicately conveyed his poor impressions and secured permission to return to the United States and Canada with US$100,000 in order to hire foreign faculty and purchase computers and teaching materials.Footnote 7

By his return, the Yijibu had selected SIME as the new program’s location, and Battat moved to Shanghai to launch his program in early 1979. At first, the ministry insisted that it would select and assign (被分配) its own faculty members to be retrained by this program. Yet Battat fought successfully for it to be an application-based program, even taking out advertisements in several major newspapers. With about 12 initial faculty and 50 students, this “systems engineering” program was an MBA program in all but name, lacking only instruction in finance. Unsurprisingly, the first term was messy, lasted just four months, and only conferred a certificate. Yet the program gradually developed in size and quality, introducing case studies, prestigious faculty, and hands-on assignments in Yijibu factories. Some projects, for example, focused on introducing computers into the production process, a trend of growing interest. Hong Kong’s Ta Kung Pao reported in May 1980 that the Shanghai No. 6 Weaving Factory had introduced computer monitoring the previous September, creating “a more reliable basis for scientific management” and increasing production.Footnote 8 Utilizing personal networks, Battat and Robinson also co-organized a delegation of Yijibu officials and economic advisors to visit MIT in 1979, which was reciprocated by a return-delegation led by then-Dean William “Bill” Pounds.Footnote 9 By 1981, SIME and the Ministry of Education formalized this initiative as a degree-granting program, where Battat continued to teach after receiving his PhD in 1984. These transnational networks also led to a joint conference on foreign investment between MIT Sloan and the CASS in Hangzhou in March 1985.

While SIME’s program developed through experimentation and informal links, the first international university to extend formal management education opportunities into China seems to have been the University of British Columbia (UBC). The university first signed a Memorandum of Understanding (MOU) with Peking University in March 1980 to allow for exchanges of faculty and advanced students between their Geography departments.Footnote 10 A few months later, Dean Peter Lusztig of the Faculty of Commerce and Business Administration launched a special fellowship to support one senior Chinese scholar to spend up to four months at UBC in 1980–1981. This fellowship was partially funded by CITIC and the scholar was chosen by Rong Yiren (荣毅仁) himself.Footnote 11 Over the next two years, four Chinese scholars would come to UBC to lecture and study management. As these relationships matured, by the mid-1980s the Canadian International Development Agency (CIDA) awarded financial support for UBC to help develop management education at Shanghai’s Jiaotong University.Footnote 12

Alongside such internationally connected programs, Chinese officials were also launching government research into “management science” and encouraging reform throughout the nation’s management practices. In March 1979, for example, the State Economic Commission set up the Chinese Enterprise Management Association (CEMA) as a coordinating body in Beijing to advance socialist modernization through the promotion of improved industrial management. By 1983, there were 23 affiliated associations spread throughout the country. In turn, as Malcolm Warner has analyzed, CEMA framed its mission in explicitly scientific terms, declaring that “modern industry needs a scientific management system” and that “management, a branch of science, is governed by its own law.” Only by “strictly studying and following this law” could enterprises “bring into full play the potentialities of the manpower and material resources, and… gain greater economic results.”Footnote 13 Again, this emphasis on scientific laws, facts, and efficiency reflected the traumas of the Cultural Revolution. Similarly, numerous rehabilitated economists, state planners, and other scholars were coalescing at the CASS under its first president, historian Hu Qiaomu (胡乔木). As a result, in 1979 the CASS subdivided its Institute of Economics into five separate institutes. Each focused on different areas of economic policy, but all shared an explicit emphasis on “scientific” research, which primarily meant the use of quantitative methodologies.Footnote 14 For management, the most important was the Institute of Industrial Economics (IIE), which was established under the economist and CASS vice-president Ma Hong. China’s inefficient management practices were one of Ma’s top concerns and he recruited former protégés to pursue new research. One was future premier Zhu Rongji, whom Ma tasked with heading the IIE’s research office.Footnote 15

Such government initiatives quickly moved from state-sponsored research into the establishment of hands-on training programs aimed at CCP and SOE managers. Thus, while the IIE was primarily a think tank, it also began its own postgraduate program in management, as well as a national distance-learning course.Footnote 16 Twenty-two Master’s students enrolled in 1979 for a three-year program, followed by four more in 1984. By that point, Warner estimated that at least 50 institutes of economic management had spread throughout the country, each training from 50 to 1,000 students.Footnote 17 In turn, in 1979 the IIE began publishing the monthly Business Management Journal (经济管理). In 1983, this periodical provided the basis for the distance-learning program known as the “Periodical University.” By 1984, its roughly 10,000 students could either study the magazine on their own and sit for examinations or pass an entrance examination and attend two to three weekly lectures in one of 66 locations across China. The vast majority of its students were party or SOE managers seeking promotion.Footnote 18 Beyond the CASS, over the early 1980s the Beijing municipal government and the Beijing Economic Commission set up their own Beijing Management Academy to offer short, hands-on training courses to the roughly 95,000 managers of the capital’s more than 1,000 enterprises. Its primary international collaborator was the Swedish Management Institute (IFL), and by 1984 over 3,450 Beijing cadres had received some training, with plans afoot to build permanent buildings with funds from the Beijing Economic Commission.Footnote 19 Similarly, in 1983 the Shanghai government began to sponsor its own annual twelve-week summer management program for senior managers from across the city’s enterprises in conjunction with the Chinese University of Hong Kong’s MBA program. After ten weeks of intensive study, the program concluded with two-week placements in Hong Kong companies and institutions.Footnote 20

For now, it is difficult to assess either the quality or content of these government initiatives. In addition to issues of expertise, most party and SOE managers had little experience as formal students. As of 1986, Warner estimated that as much as two-thirds of this demographic had no education beyond a middle school level.Footnote 21 In terms of content though, we gain key insight through the first Chinese-language management textbook to be published after the Cultural Revolution. In 1980, the IIE had sponsored the establishment of the Chinese Association of Industrial Enterprise Management Education (CAIEME, 中国工业企业管理教育研究会), which in turn sponsored the 1981 publication of the textbook Industrial Enterprise Management (工业企业管理) (Fig. 5.1). Written between March 1979 and August 1980, its authors were a CAIEME writing group comprised of 27 faculty from 14 universities and institutes around China. Most of these scholars, such as Wang Dezhong (王德中) and Hao Gengguan (郝觐桓) at the Sichuan and Tianjin Colleges of Finance and Economics, respectively, had begun teaching economics, business administration, and industrial management in the 1950s. At least one, Li Baokun (李葆坤) of the Shanghai College of Finance and Economics, had earned an MBA in the United States in 1949. Predictably, their careers had been disrupted over the Mao era and most were still re-establishing their departments. As such, this textbook also functioned as a larger statement about the revival and purpose of their disciplines in China’s new era. After revisions and consultations, the textbook received final approval from the IIE in early 1981, with “active support” from Ma Hong.Footnote 22 Reflecting strong sales, the volume would enter its fourth edition by 1986.Footnote 23

Fig. 5.1
figure 1

Industrial Enterprise Management (工业企业管理), 1981. Tsinghua University Library

Full size image

The central mission of the first edition was to reconcile two concepts: Chinese socialism and “scientific management.” The textbook repeatedly declared that future SOE managers must understand that “enterprise management is a science” and that the improvement of China’s management was a “necessary condition” for socialist modernization.Footnote 24 Simultaneously, the text studiously avoided bourgeois terms such as efficiency, company, or profit, favoring instead euphemisms such as “economic results” (经济效果). Given the disruptions of the previous decades and the low educational levels of most SOE managers, the authors assumed virtually no background knowledge. As a result, the text started at the most basic level and used very simple and direct language. Beginning with an overall summary and introduction to the history of management in Chapter 1, the next three chapters reviewed the basic purposes and operations of socialist industry, the responsibilities of a manager, and the content and aims of workers’ political and ideological work. Of the remaining seven chapters, three were devoted to various aspects of planning, with just one chapter apiece focused on factory layout, quality control, and new product development, and a cursory concluding chapter on technology and innovation. Throughout, there was constant attention to re-establishing management as both a supposedly scientific discipline and a key tool of state planning. As such, it no longer emphasized mass participation or militarized rhetoric, as had Soviet-influenced management textbooks of the 1950s. Instead, the text marshaled Marx himself to declare that large-scale production would “inevitably produce supervisory labor and command labor,” just as “a single violin player can direct himself, but an orchestra requires a conductor.”Footnote 25 Lenin too was enlisted to give his blessing, declaring that large-scale industry “required the unconditional and strictest unified will of hundreds, thousands, even tens of thousands of people united in common work.”Footnote 26

Chapter 1 performed the most important ideological lifting to reconcile socialism and “scientific management.” In particular, this chapter was tasked with establishing an explicit theoretical basis for socialist China to learn and borrow “scientific” methods from capitalist management. Since the CCP also considered Marxist theory to be “scientific,” squaring all this was no easy lift. Both Soviet and PRC management texts from the 1950s had always stressed that economics was subordinate to politics and party leadership—an obviously unscientific precept.Footnote 27 Rather than now deny this principle, Chapter 1 instead put forth an innovative theory of management’s “dual nature” (二重性). In this theory—visualized in Fig. 5.2—the CAIEME writing group argued that capitalist and socialist systems of management had but one “common nature” (共性) when it came to shared practices of honing ever-more efficient forces of production (生产力) based on facts, experience, and reason, meaning that in this realm, Chinese management could learn from capitalist management. Yet when it came to the social relations of production (生产关系), capitalist and socialist systems of management had distinct “individual natures” (个性).Footnote 28 Here there would be no borrowing, and this separation would enable China to appropriate from capitalist methods without sacrificing ideology. In particular, the text stressed the maintenance of state ownership as key insurance to preserve the correct social relations of production. Through this “dual nature” theory of management—probably inspired by Marx’s theory of the dual nature of the value of commodities—China would learn from capitalist management practices to boost productivity, drive innovation, and deliver greater material rewards, while preventing exploitation and even raising workers’ political consciousness through more effective political and ideological work.Footnote 29

Fig. 5.2
figure 2

A schematic of the nature and function of enterprise management. This fascinating diagram begins at the top with “the production process,” which is divided into “the forces of production” (生产力) on the left and the “social relations of production” (生产关系) on the right. Proceeding downward through “decisions” (决定) by management on both sides, management steers its “natural properties” on the left and its “social properties” on the right. These are then “manifested” (表现) in accomplishing the twin “foundational functions” (基本职能) of socialist management: “rationally organized productive forces” (合理组织生产力) and “safeguarded social relations of production” (维护生产关系). These two goals then work in tandem through the five “specific functions” of management in the production process, derived primarily from the French theorist Henri Fayol and including planning, organization, command, supervision, and adjustment

Full size image

One particularly fascinating angle is that this theory effectively returned Chinese management theory to the “scientific” claims of Taylorism in the 1910s. The writing group’s effective claim was that, far from creating conflict between workers and managers, the revitalization and increased efficiency of China’s management practices would obviate such conflict and even strengthen socialism: “Strengthening management is thus a way to maintain and improve the socialist relations of production: uniting the interests of the country, the enterprise, and staff; promoting the enthusiasm and initiative of staff; and improving the rapid development of industrial production.”Footnote 30 In both the 1910s and 1980s, these claims of management’s “scientific” nature drove a shared fantasy that human workplaces could achieve machine-like efficiency.

This creative justification for injecting foreign “management science” into Chinese socialism had implications far beyond this textbook or even management education. Coming at the very forefront of the PRC’s ideological revisions in the Reform Era, the “dual nature” theory of management effectively encapsulated and justified the entire logic of many reformers in the early 1980s. Appearing in the same year as the official Resolution on CPC History (1949–1981), this textbook likewise articulated a crucial narrative of the previous 30 years and squared the circle in pursuing market-driven reforms. The textbook repeatedly referenced the Cultural Revolution, acknowledging that “in the past, the proliferation of extreme leftism in enterprise management” had led to the “complete rejection” of useful insights from capitalist countries, causing “serious harm to the development of management science in our country.”Footnote 31 This was a firm statement that scientific learning from foreign capitalists was not incompatible with socialism. The text then underscored that in “normal times” there should be no conflict between the “objective laws” of “scientific management” and the party’s dictates: “Acting in accordance with objective laws is not inconsistent with implementing the party and state’s lines, guidelines, and policies, because under normal conditions, the lines, guidelines, and policies of the party and state are established on the foundation of a correct understanding of objective laws and reflect the requirements of objective laws, so they can guide enterprise management.”Footnote 32 Again, the text firmly declared that sound management and sound state policy should be based on facts, science, and reason. Perhaps most surprising, the textbook even underscored that the most “important content” of ideological and political work was to “educate workers to understand objective laws, act according to the requirements of objective laws, and under specific material and technological circumstances, give full play to subjective energies and initiatives in order to strive for the largest economic result.”Footnote 33 In no uncertain terms, the CAIEME writing group intended their reinvigoration of “management science” to serve as a bulwark against the ideological extremes and economic fantasies of the Mao era. Simultaneously, the “dual nature” theory also foreclosed any discussion that improving Chinese management might require changes to the ownership or organization of state-owned industries.

Indeed, this reinvigoration of “management science” was instead explicitly in service to strengthening state economic planning, not reducing or removing it. In articulating the five core functions of industrial management—planning, organization, command, supervision, and adjustment—the textbook acknowledged that these ideas were primarily adapted from the French theorist Henri Fayol.Footnote 34 Yet its emphases differed from those of Fayol. While Fayol had, for example, emphasized planning as crucial and difficult, now planning was “the primary function of enterprise management.”Footnote 35 Moreover, while all five functions were intended to be performed rationally and scientifically, the textbook instructed that “the centralized command of socialist enterprises is based on the promotion of democracy,” meaning that command “must be combined with strengthening ideological and political education to continuously inspire and raise the socialist consciousness of the majority of employees.”Footnote 36 Thus, while recommitting to science, facts, and reason, the CAIEME writing group was also recommitting Chinese “management science” to advancing and deepening state-led socialism and even more intently shaping workers’ thoughts.

Industrial Enterprise Management’s efforts to reconcile “scientific management” and Chinese socialism are perhaps best embodied by its juxtaposed histories of capitalist and Chinese management. While offering some critiques, its history of capitalist management primarily signaled respect.Footnote 37 The textbook laid out a narrative that began with “traditional” nineteenth-century methods, proceeded to early twentieth-century “scientific” management, and concluded with post-1940s “contemporary” management. It praised numerous foreign thinkers, particularly Americans. It singled out Frederick Winslow Taylor (泰罗) as the “founding father” of “scientific management” due to his advocacy that “all management problems should and may be researched and solved with scientific methods.”Footnote 38 The only non-American to receive such attention was Fayol, credited as the second great leader of the “scientific” era. Yet, even in the contemporary age, the authors highlighted Harvard’s controversial Elton Mayo (梅约) for pioneering “behavioral science.” This history concluded with an assessment of current trends in capitalist management, such as leadership and decision-making, corporate diversification, systems management, new technologies, and continuous employee retraining. Only one current trend received clear skepticism: the use of “clever” (巧妙) but “deceptive” (欺骗) methods to motivate employees, such as “merit-based” bonuses. The authors then concluded by declaring that capitalist management could be cruel, but had been extremely successful in driving productivity and innovation. Relying on the “dual nature” theory, China could now study capitalist management “in accordance with science and what is suitable for our country’s needs, and transform the tools of capitalism into the tools of socialism in order to improve the management level of our country’s enterprises and accelerate the modernization of socialism.”Footnote 39 By focusing on what was supposedly “scientific” about management, the PRC would enjoy the best of both worlds.

The CAIEME writing group carefully reinterpreted the Mao era through the prism of “scientific management.” Effectively ignoring capitalist industry in China before 1949, the authors presented the CCP’s efforts to launch small-scale industry in Yan’an as the beginning of Chinese management, establishing first principles such as adherence to party leadership, compliance with state planning, and a focus on small-scale producers. Things became interesting, however, with the textbook’s account of the 1950s and 1960s. Regarding the first Five-Year Plan (1953–1957), the text credited Soviet management methods with reshaping Chinese practices, particularly through expert planning, technical training, and the expansion of large-scale heavy industry. Yet the text was cagey on whether Soviet methods were scientific, presenting them as “mainly conforming with the demands of objective laws” and as “placing our country’s enterprise management onto the road toward scientific management.”Footnote 40 Following this oblique comment came direct criticism of the “shortcomings” of Soviet management, particularly over-centralization and disregard for “democratic management.” Such framing allowed the authors to present the Great Leap Forward as a logical “upsurge” of grassroots enthusiasm for workers’ participation in “daily management” that went too far due to “insufficient respect for objective laws” and the abandonment of “the scientific management systems and methods established during the first Five-Year Plan.”Footnote 41 The authors could also then present the reforms of Deng Xiaoping and Liu Shaoqi during the early 1960s as “re-entering the track of scientific management,” before the Cultural Revolution (blamed on Lin Biao and the “Gang of Four”) again caused “all the scientific management systems and methods that were effective in the past to be destroyed.”Footnote 42 Throughout, Mao was carefully exculpated.

The inevitable conclusion of this constructed narrative was not just that “scientific management” and Chinese socialism were compatible, but rather that they were an essential pairing to achieve the Four Modernizations. This history lesson concluded by underlining once again “the most important and fundamental lesson,” namely, the harm of ultra-leftist thinking and the need for modern management: “Enterprise management is an objective requirement for modernizing large-scale production… Negating enterprise management means negating modern production itself, which will damage socialist production relations and hinder the development of socialist productive forces.”Footnote 43 Put directly and succinctly: “The Four Modernizations require the scientification and the modernization of enterprise management.”Footnote 44 Through Industrial Enterprise Management, we can therefore observe a careful, precise, and state-approved intellectual formulation at the outset of the Reform Era to square socialist systems with certain capitalist practices. Even more specifically, it articulated “scientific management” as a politically approved framing through which further such hybrids and experiments could be justified.

Transpacific Circulations and MBA Re-education, 1984–1996

By the mid-1980s, numerous government- and foreign-sponsored management education programs had taken root across China, primarily to retrain party cadres and SOE managers. In another example, in 1983 CEMA started its own program in cooperation with the European Economic Commission to develop a two-year MBA program aimed at future economic cadres. Like SIME’s program, it relied on foreign professors coming to China and lecturing in English on subjects such as managerial economics, production management, marketing, accounting, decision-making, and computer science, while Chinese scholars lectured on socialist management.Footnote 45 All these programs seem to have stimulated substantial popular interest. By January 1985, Ta Kung Pao reported that studying scientific management had become the “hottest trend” among Shanghai’s young people. Framed as a response to the start of urban reforms, this trend had swollen the circulation of corporate management books from Shanghai’s libraries by 400%. Bookstores were also purportedly having trouble keeping management books on the shelves, including both Industrial Enterprise Management and American books, while even the Shanghai Communist Youth League had started business management seminars.Footnote 46

One such government-sponsored management program soon became the mainland’s first formal MBA program. With an agreement signed during U.S. President Ronald Reagan’s April 1984 state visit, Dalian University of Technology (大连理工大学) and SUNY agreed to redevelop an existing nine-month program into a three-year MBA program for SOE managers. This program would not survive long and merits much greater research, but its approval at the highest levels of both governments signaled the perceived significance of management education to both PRC economic reforms and Sino-U.S. relations.Footnote 47 During his visit, Reagan would even declare in the Great Hall of the People that management was “the knowledge that is America’s key technology.”Footnote 48

Indeed, both the Dalian program and public interest in American management signaled the onset from at least 1984 of another intellectual thread that would gradually redirect the revival of Chinese management. With the launch of urban reforms, increasing integration into the world market, and the approval of schemes like Dalian’s, new momentum built within senior Chinese academia to expand international partnerships, particularly with American MBA programs. At the center of these shifts stood the scholar-official Zhu Rongji. Since joining the IIE, Zhu had been an active proponent of initiatives to expand management education. He is widely credited with spearheading the establishment of Tsinghua’s School of Economics and Management (SEM) in 1984, where he served as founding dean and supervised a number of graduate students, such as future Tsinghua SEM professors David Pan (潘庆中) and David Li (李稻葵), as well as future chairman of the China Securities Regulatory Commission Liu Shiyu (刘士余).Footnote 49 Simultaneously, after becoming deputy party secretary in Shanghai in 1987, Zhu continued to speak out regularly on the urgent need to improve China’s management standards. On 25 April 1988, for example, addressing the First Plenary Session of the Ninth Shanghai People’s Congress—where he was elected mayor of Shanghai—Zhu described in detail his vision for the city’s development as an international trade and manufacturing hub. Addressing the role of education in this plan, Zhu related foreign visitors’ poor impressions of China’s industrial managers. In blunt comments that attracted criticism, Zhu agreed: “It’s true that our factory directors and managers need good training. Many factory directors in Shanghai aren’t even up to the level of a shop foreman in other countries.” In particular, Zhu criticized factory directors who never took the initiative and relied on state supervision and subsidies: “This sort of factory director and manager is basically unqualified, and we must educate them in modern management.” Yet in Zhu’s opinion, the proliferation of “so many management schools in Shanghai” meant that the nation could now “systematically send our factory directors and managers here, particularly those engaged in large-scale importing and exporting.”Footnote 50 Management re-education thus occupied a fundamental place in Zhu’s vision of China’s path toward increasingly market- and export-driven development. One week later, Zhu elaborated on this key role for management re-education: “If you’re not managing raw materials, if you’re not managing production, supply, and marketing, what kind of factory director are you? What kind of entrepreneur are you? What kind of operational management is this? Factory directors need training, and so do shop foremen.”Footnote 51 In short, if China were to expand its industrially-based international trade, Zhu emphasized that a key condition was creating a new and more entrepreneurial breed of managers. In turn, Zhu stressed that cadres must also learn to delegate, which he termed as studying “macro-management” (宏观管理).Footnote 52

Zhu may have been speaking from personal experience. At Tsinghua, his vision for management re-education had to be delegated. As Zhu’s political career accelerated, in 1986 Tsinghua appointed the engineering professor Zhao Chunjun (赵纯均) as deputy dean to run SEM. Like Zhu, Zhao was an electrical engineer by training, graduating from Tsinghua in 1965. After the Cultural Revolution, he returned to Tsinghua and pivoted toward systems engineering. In this pivot, his most serious academic work was conducted in the mid-1980s at the International Institute for Applied Systems Analysis (IIASA), a non-governmental academic organization outside Vienna. With financial support from the Chinese Academy of Sciences, he spent two years collaborating on two major research papers: “Advanced Decision-Oriented Software for the Management of Hazardous Substances” (December 1985); and “Expert Systems for Integrated Development: A Case Study of Shanxi Province, The People’s Republic of China” (September 1987).Footnote 53 In both cases, Zhao’s team focused on the expanding application of computers to operations research through the integration of huge amounts of data into simulations that could provide managers with decision-support tools. In a fascinating harbinger, their papers emphasized the long-term implications for developing artificial intelligence. Upon returning to Tsinghua, Zhao also joined with Yang Xin (杨炘) and Wang Yongxian (王永县) in editing the book Optimization and Decision-making (优化与决策), published in 1988, a volume intended to introduce these new technologies to ordinary professional engineers as part of their continuing education.Footnote 54 Zhao’s transfer to SEM in 1986 represented a substantial career shift, but his background in computers and systems engineering reflected the quantitative and “scientific” aspirations that had driven the revival of Chinese management education.

The reality, however, was that management education at major PRC universities remained small, under-resourced, and intellectually constrained by impulses toward the exclusively quantitative. By 1986, Tsinghua SEM had no dedicated space and admitted only 30 undergraduates annually. When postgraduate students were included, altogether it had 200 students. Few of the faculty were scholars of management or even economics. Rather, like Zhao, they were primarily engineers and mathematicians.Footnote 55 By 1984, People’s University’s Department of Industrial Management had 80 faculty and 400 students, predominantly undergraduates, but most of its faculty did not have a doctorate.Footnote 56 Like Tsinghua, Fudan had also rushed to establish a Department of Management Science in 1979 and a School of Management (SOM) in 1985 under founding dean Zheng Shaolian. Zheng was another mathematician who had spent his career at Fudan, publishing eight books on probability theory before 1966. After 1977, he too pivoted abruptly toward “management science,” applying his quantitative expertise to the study of topics such as productivity. Yet across these programs, the primary teaching method remained hours-long lectures in which “no one asked questions or offered opinions.”Footnote 57 The result was that by the late 1980s, leaders such as Zhu Rongji and Zheng Shaolian were becoming convinced that an international partnership was necessary to improve their programs, particularly as state ambitions moved toward a “socialist market economy” and market-driven enterprises. Speaking from firsthand observation, after touring several U.S. and Canadian business schools in the late 1980s, Zhu Rongji “reached the conclusion that a partnership with a top-tier U.S. business school was essential.”Footnote 58

At least one U.S. institution was already deeply engaged in the region and itself searching for opportunities in mainland China. Battat’s program at SIME had incepted an early interest at MIT Sloan in promoting management education in mainland China. While there had been no formal relationship between MIT and SIME, throughout the early 1980s Battat had relied on MIT-centered networks to organize exchanges between them. The economist Lester Thurow participated in these exchanges and, after his appointment in 1987 as dean of MIT Sloan, his interest in Asia’s economic growth pushed him to explore further partnerships. Thurow led the school to launch a series of collaborative programs with Nanyang Technological Institute in Singapore, the Epoch Foundation in Taiwan, and the Indian Institute of Advanced Management in Calcutta, and to formalize ties with SIME. These collaborations involved missteps and painful lessons that would help to frame MIT’s later endeavors, most especially the realization that logistically, Sloan faculty could not staff all these programs. Instead, its faculty began to experiment with regularized exchanges and fellowships to bring foreign scholars to MIT.Footnote 59 In turn, in partnership with prominent alumni in Hong Kong such as Victor Fung (馮國經) of Li & Fung and Philip Kwok (郭志權) of Wing On, in the late 1980s MIT also began sponsoring executive education programs and conferences in Hong Kong.Footnote 60

The Tiananmen Square Massacre of June 1989 compelled a substantial disruption in both sides’ plans, yet management education actually proved a key conduit of dialogue and engagement. Even in late July 1989, Jiang Zemin met with the U.S.-China Peoples Friendship Association’s chairman Frank Pestana at Zhongnanhai to discuss economic cooperation and the desire to learn foreign “scientific management.”Footnote 61 Thereafter, the Ministry of Education’s approval of nine provisional MBA programs in 1991 served as its own statement on restarting reforms, one that actually anticipated Deng’s famous “Southern Tour” of early 1992. Yet launching a quality MBA program was easier said than done. Tsinghua and Fudan alike lacked real expertise. As Zheng Shaolian stated plainly: “We got the MBA from the U.S.A. We didn’t have any experience.” Like Zhu Rongji, he too resumed searching for U.S. partners throughout the early 1990s, but the quest proved fruitless. As Zhao Chunjun related, even Tsinghua’s own first MBA students were dissatisfied with the program: “We already had an MBA program when we started the IMBA program, but the students were complaining about the teaching quality and the contents.”Footnote 62

After exploring options, by 1994 MIT Sloan’s senior leaders had decided that Tsinghua and Fudan were the two most compatible and promising institutions in China for a potential partnership. In an effort to choose between them, Associate Dean Alan White and Professor Michael Cusumano therefore decided to visit. Beginning at Tsinghua and proceeding to Fudan, they spoke with dozens of faculty members. At Tsinghua, Zhao Chunjun responded skeptically, stating: “‘The West and China were different,’ Dean Zhao recalls. ‘We had different markets. An IMBA program would have been hard for Chinese MBA education.’”Footnote 63 Cusumano too noted their different intellectual approaches to management: “I remember being struck that almost no one had relevant backgrounds, but instead had studied mathematics, Marxian economics, and so on. These were studies that were related to management—or administration, rather—but not to markets or entrepreneurship.”Footnote 64 Yet there were enthusiasts. At Fudan, White and Cusumano also met with Xie Xide (谢希德), a giant in Chinese physics who had received her own PhD from MIT in 1951 before returning to teach at Fudan. As president of the university from 1983 to 1989, she not only became the first woman to head a major Chinese university, but also spearheaded the establishment of its Center for American Studies. The enthusiasm Xie and other senior scholars showed for this initiative ultimately convinced White and Cusumano to recommend that Sloan not choose, but instead partner with both institutions. As White stated: “We went to China looking for a partner who would be a colleague. And we made it clear from the outset that we believed that our Chinese counterparts had much to offer us.”Footnote 65

By June 1995, the deans of Tsinghua SEM, Fudan SOM, and MIT Sloan were ready to sign a MOU for the “MIT-China Management Education Project” to support new IMBA programs at Fudan and Tsinghua. The MOU laid out each institution’s objectives for this collaboration, which illuminates how all three bypassed their substantial intellectual and ideological differences. In MIT Sloan’s summary memorandum of this MOU, dated 1 June 1996, the common thread on all sides was a joint reading of China’s future. Fudan and Tsinghua emphasized that their “primary objectives are faculty development and the development of cutting-edge curricula for MBA students who will operate internationally.” Such “cutting edge” curricula represented a key transition from the overly quantitative and “scientific” approach, positioning these programs to offer previously unthinkable courses in finance, marketing, entrepreneurship, and even an online “global classroom.” For MIT, the goals centered on corporate branding, alumni outreach, and future donations and anticipated opportunities for its faculty to conduct research and its students to work in China.Footnote 66 Thus, each party saw clear institutional benefits if they worked together at this key moment in China’s accelerating export-driven development. Political differences were largely ignored, and only a few areas, such as industrial relations, were made explicitly off limits.Footnote 67

A key supporting role behind this partnership was played by the same MIT alumni in Hong Kong, particularly through funding. Early on, Chinese-American executive Shirley Young had warned Alan White against accepting any funds from the Chinese government, to avoid the ensuing strings. Instead, “Young convinced us that if we secured funding from private sources, we would be free to work however we wished.”Footnote 68 White pivoted to the Hong Kong alumni with whom MIT had worked for years: “I presented the concept to Philip [Kwok]… and explained that we needed to raise the resources to make it happen. He was on board immediately and said, ‘Let me introduce you to Marjorie Yang.’” Upon meeting Marjorie Yang (楊敏德) of the Esquel Group, White stressed that they wanted only “large contributions” from sponsors who could then join an advisory board.Footnote 69 This advisory board was duly set up in Hong Kong and again included Yang, Kwok, Victor Fung, Jack C. Tang (唐骥千) of South Sea Textiles, and others. Fung, himself a former Harvard Business School faculty member, endorsed the decision to abandon, in White’s words, “the missionary model of knowledge transfer.”Footnote 70 Instead, the core of the MIT-China MEP would focus on providing expert counsel and sponsoring transpacific circulations. In turn, as I have argued previously, these Hong Kong elites were not just cementing reputation or manifesting a sentimental attachment to MIT by sponsoring such educational programs. They were also using educational change to integrate mainland Chinese industry and labor-power into global capitalist trade networks in which Hong Kong was the financial and services hub.Footnote 71

The MIT-China MEP opened a fascinating knowledge transfer through transpacific circulations of students and faculty. In some sense, it began with Zhao Chunjun himself. Echoing parallel U.S. educational outreach efforts in Cold War Hong Kong and Taiwan, Zhao spent the fall 1995 semester at MIT as a Fulbright Scholar. This experience was transformative. Alongside conducting research on system dynamics with the founder of the subject, Jay Forrester, Zhao “took advantage of the time and opportunity to speak with MIT Sloan faculty ‘about the scope of the project and how to implement it’,” consulting both White and Thurow.Footnote 72 Others then followed in Zhao’s footsteps. Beginning with four assistant professors in fall 1996, Fudan and Tsinghua’s deans selected promising young scholars and dispatched them to Massachusetts for a semester or year as “International Faculty Fellows” (IFFs). These sponsored exchanges allowed Chinese professors to improve their English, study MBA methodologies, and adapt teaching materials for their own classrooms. These teaching methods often involved substantial culture shock for the IFFs, both during their studies and when they subsequently implemented discussion-based methodologies in their teaching. In turn, however, IFFs brought Chinese expertise and perspectives into Sloan’s classrooms, broadening its students’ perspectives at a critical moment in China’s development.

It should be stressed, however, that this opportunity was essentially mandatory for Chinese faculty and often included wholesale career change. June Qian Xiaojun (钱小军), for example, made a huge disciplinary shift from applied mathematics to managerial communications. After receiving her undergraduate degree in applied mathematics from Tsinghua in 1982, Qian had earned her Master’s and doctorate in mathematics from Purdue in 1988 and 1992, respectively. She commented:

I was in my second year of teaching statistics when Dean Zhao Chunjun asked me to learn to teach managerial communications…I wondered about taking on a subject so far from my original field. He said that no one at Tsinghua knew what a course in communications should be, but that MIT Sloan placed great importance on it. The course needed to be taught in English, and he thought I could do this if I observed how it was taught at MIT Sloan.Footnote 73

In essence, Qian’s fluent English determined Zhao’s decision to reroute her career. After her time at MIT in fall 1997, Qian not only returned to teach managerial communications, but even taught from the very same textbook, Mary Munter’s Guide to Managerial Communication. She and Fudan IFF colleague Zhang Jie eventually translated this text into Chinese, which is now the standard textbook, and Qian became a national leader in developing this field in China.

Indeed, the MIT-China MEP’s circuits of translation and knowledge transfer rapidly expanded throughout all Chinese MBA programs. In October 1994, the State Council and the Ministry of Education approved the formation of the National MBA Education Supervisory Committee (全国工商管理硕士教育指导委员会) with Zhao Chunjun as its first chair, earning him the nickname of “the ‘Dean’ of all the deans of business schools in China.”Footnote 74 Yet, as more universities launched their own MBAs in the late 1990s and early 2000s, leaders such as Zhao and Zheng Shaolian feared that their inconsistent content and quality would “undermine the rising reputation of Chinese business schools.” From the initial MOU of the MIT-China MEP, all three institutions therefore conceived of their IMBA programs as “a model” and planned to share their materials with other Chinese institutions.Footnote 75 By the early 2000s, however, the National Supervisory Committee took this idea one step further by setting mandatory guidelines and establishing a national MBA core curriculum. In this national curriculum, “roughly half the nationally mandated or recommended core courses align[ed] closely with or are virtually identical to the MIT Sloan courses” that Tsinghua and Fudan had adopted.Footnote 76 In 2005, for example, the National Supervisory Committee began to require all MBA programs to teach managerial communications. Qian Xiaojun then compiled the recommended course outline book and to this day teaches an annual seminar to train other universities’ scholars in the relevant case studies.Footnote 77

Managerial communications was just one example of many MIT courses that “migrated” through Tsinghua and Fudan into the entire Chinese MBA curriculum under the guidance of the National Supervisory Committee. Another example is “Data, Models, and Decisions” (DMD), originally taught at MIT by Professors Robert Freund and Dimitris Bertsimas with a co-authored textbook of the same name. The course focuses on computer spreadsheet exercises to aid in decision-making across a number of business scenarios. Tsinghua SEM professor and current executive associate dean Chen Guoqing (陈国青) first took this course as an IFF in 1996 and then returned in 2001 to plan its migration: “At the time I came to MIT Sloan, we were very mathematical in China. We knew how to work with statistics and operations research. At MIT Sloan, I worked with [Professors] Freund and Bertsimas. We developed the syllabus to be taught here. Over time, we changed some things because DMD is very applied, so there are lots of interesting cases and examples.” Not only does DMD remain a required IMBA component at both Tsinghua and Fudan, but the course and textbook are also recommended by the National Supervisory Committee. Today multiple Chinese translations of Data, Models, and Decisions exist, but Chen still teaches from the English original.Footnote 78

Finally, the MIT-China MEP not only led to curricular and pedagogical shifts, but also began to scaffold students into professional trajectories with multinational corporations. Both programs enrolled their first cohorts of 39 IMBA students in the fall of 1997. During their first summer breaks, Marjorie Yang arranged for nearly all these students to have summer internships in Hong Kong, an experience which itself later influenced the National Supervisory Committee to recommend summer internships.Footnote 79 With MIT’s assistance, both Fudan and Tsinghua also gradually developed student career services, including an orientation week and a Career Development Center (CDC). As Zheng Shaolian stated: ‘Before, we didn’t pay attention to what students do after graduation. Now, a CDC office is important in all national universities.”Footnote 80 After her IFF fellowship in fall 1999, Fudan professor Sun Yimin (孙一民) in particular became a leader in both the field of marketing and in establishing Fudan’s CDC.Footnote 81 Such offices also allow both institutions to track their graduates’ careers. By 2004, 50–60% of both universities’ IMBA graduating classes were joining Fortune 500 multinationals or joint ventures with foreign firms in China, with salaries on average 86% higher than they had earned before.Footnote 82 Both programs also rapidly became more international, with 10% of students hailing from abroad by 2005 and a host of new international partnerships in the works.Footnote 83

The rapid corporatization and internationalization of China’s first MBA programs can be interpreted as simply reflecting China’s accelerating integration with global supply chains after its 2001 entry into the WTO. Yet we can also observe how these programs were themselves accelerating the development of an elite stratum of human and social capital concentrated in China’s coastal cities that were able to find disproportionate financial advantage in this rapid commercial integration after 2001. In this way, while China’s first ventures to revitalize management had focused on restoring facts, “science,” and reason to socialist production, China’s leading universities increasingly pivoted toward American-style management education to accelerate the nation’s upmarket transition toward technology, finance, and services. This educational transition enabled a crucial economic transition, but also served to accelerate yawning domestic inequality by positioning a small elite of Chinese and foreign students at the forefront of China’s global emergence. As in many other countries, the prestige surrounding these MBA programs incentivized a tidal wave of universities to follow. While the National Supervisory Committee set standards and helped regulate the ensuing “Big Bang” in Chinese management education, MIT Sloan remained directly involved by adding both Lingnan University in Guangzhou and Yunnan University in Kunming to the MIT-China MEP in 1999 and 2002, respectively.Footnote 84 As Tsinghua and Fudan increasingly needed less assistance, by 2016 their two IMBA programs alone had graduated more than 5,100 students.Footnote 85

Conclusion

This chapter has laid out an initial analysis of the revival of management education as an instrumental aspect of China’s Reform Era. Across the reformist spectrum, from 1978 senior Chinese officials and economists recognized a pressing need to shift Chinese management ideologies and practices away from Cultural Revolution rhetoric toward the supposedly “scientific” ideals that had first inspired Mu Xiangyue and Yang Xingfo in the 1910s and then guided both Nationalist and early PRC state planning. From the Yijibu and CEMA to the CASS, numerous government bodies and agencies began to research “management science” in the early 1980s and invest resources into retraining tens of thousands of CCP and SOE managers across the country. As the 1981 textbook Industrial Enterprise Management testified, these efforts were perceived as buttressing a host of entwined economic and political goals: increasing the efficiency of PRC industry, advancing socialist modernization, strengthening state planning, and ultimately providing an intellectual bulwark against any resurgence of Mao-era ideological excesses. Indeed, these 1980s ideals of reviving management as a “science” ultimately illuminate a key intellectual conundrum that has plagued misperceptions of the Reform Era: the supposedly contradictory fusion between socialism and capitalism.

The shift toward American-style MBA education over the late 1980s and 1990s not only maps onto China’s evolution toward a “socialist market economy,” but also highlights the significant influence of transpacific networks and actors in shaping China’s export-driven development. Leaders such as Zhu Rongji and Zheng Shaolian did not simply look to foreign models for inspiration, but ceded real and substantial influence to foreign experts and overseas Chinese capitalists to redefine the meaning of modern Chinese management education. Put simply, very few other areas of higher education in the PRC have adopted U.S. textbooks and syllabi wholesale. Both MIT Sloan and its elite Hong Kong alumni attempted to use these educational initiatives to steer future mainland executives toward integration with the existing international business cultures and corporate systems. In this vein, management education became less about socialist modernization and far more about the expansion of a global class of upwardly mobile executives. From another perspective, it should be noted that MIT Sloan freely transferred enormously valuable technical expertise to a future American competitor on the vague hope of future research and professional collaborations for its own staff and students. In conjunction with the coordination provided by the National Supervisory Committee, the end result was an explosive transformation in the scale and quality of Chinese MBA programs.