Business

One man's sermon to executives

By Chen Weihua
Updated: 2010-08-26 08:05

Noted entrepreneur Chen Guangbiao makes philanthropic donations at a function recently. Chen and 20 other business leaders donated nearly 43.16 million yuan ($6.36 million) for people in underdeveloped regions in China. Tang Zhanjun / For China Daily

NEW YORK - Students in the executive education program at Cheung Kong Graduate School of Business include many of the richest and most influential Chinese entrepreneurs.

For Xiang Bing, dean of the Beijing-based school, helping these people understand why they make money, whom they make money for, why they should do business and how they should do business is no less challenging than helping them make more money.

But something is troubling him: The mindset of some entrepreneurs and business executives around the country.

"Some entrepreneurs, who are already among the richest in China, still believe that their primary or sole purpose of doing business is to make more money and then pass it onto their children. They want to bring honor to their ancestors rather than help society," Xiang told China Daily.

Having recently led a group of 65 Chinese CEOs to a business forum jointly organized with the Columbia University Business School, Xiang admitted that he may not be able to change the minds of everyone attending Cheung Kong's programs.

"But we will continue to preach," he said.

"They have the right to use their wealth in ways they see fit, but the school will make them aware that there is not only option A, but also option B, C and D out there," said Xiang.

He spoke about Microsoft founder Bill Gates and investor Warren Buffet as two of the world's richest people who have given away the majority of their wealth to philanthropy.

In Xiang's eyes, Gates is more than a great entrepreneur and a business leader.

By not turning over the Microsoft helm to his children or family members, Gates has set a good example for Chinese entrepreneurs.

Many Chinese private executives still aim to bequeath their wealth and company leadership to their children and family members.

This mindset makes it difficult for Chinese businesses to become great institutions, especially on the global stage, Xiang said.

Cheung Kong Graduate School of Business was founded in November 2002 with the support of the Li Ka-shing Foundation with the goal of becoming a driving force for the new generation of business leaders of China. Chinese entrepreneurs have been quick to accumulate wealth within the last 30 years of China's period of reform.

On the 2010 Forbes list of 1,011 people with wealth exceeding $1 billion, 64 of them are from the mainland, including 27 first-time listmakers.

But Xiang notes that many Chinese businesses have thrived through cutthroat price measures, which is not only unsustainable but can also be disruptive globally in many sectors.

For years, many Chinese entrepreneurs have been accused of improving their businesses at the cost of environment safety, exploiting cheap labor and taking advantage of loopholes in the country's inadequate legal system and even brazenly violating the law.

Shoddy goods and contaminated foods have caused people to lose confidence in Chinese businesses and products.

"Those who benefit substantively from China's economic rise should start to shoulder more responsibility for the environment and labor welfare, and they should be more grateful to society and become better corporate citizens," said Xiang.

"A gentleman needs to make money and use money in the right way."

These words from Confucius were also used by Hong Kong tycoon Li Ka-shing earlier this month when he pledged to donate more in the next 10 years than he has in the last 30 years.

Xiang said he wants to see Chinese businesses move up the chain from price competition to value competition.

"This can be achieved through innovation such as in products, processes, organization, technology, financing, distribution of resources and a new way of thinking," he said.

Xiang is critical of the fact that some Chinese businesses seem to have only one dream: To expand in size and to get rich quickly.

"We should have a diversity of dreams," said Xiang, who told the story of a 260-year-old Japanese restaurant in Kyoto that still operates only a single location after nine generations of operation.

Xiang, who first visited Japan in 1982 with a Chinese university student delegation, marvels at the Japanese attention to detail and pursuit of precision, something he believes Chinese may not be capable of learning given the fickle psyche of Chinese people these days.

He feels disappointed when business executives discuss speculative stock and property markets as favorite topics at gatherings, even when these sectors are totally irrelevant to their core businesses.

"We might have been a bit too hasty in the past and we may need to make some major adjustments in our psyche to have a more balanced and healthier model of development," said Xiang.

To instill the necessary values in China's new generation of entrepreneurs and executives, Cheung Kong introduced humanities courses into the business school curriculum in 2003, teaching history, philosophy to religion and ancient Chinese culture.

"These classes teach students to think about the meaning of life. We want our students to live enriched lives, not just be happy or to become instruments for creating value for shareholders," said Xiang, who often writes about this holistic viewpoint.

Xiang believes the Chinese entrepreneurs will encounter great difficulties one day if they don't pay attention to values. "For China to become a valued member of the global community, we need to find ways to contribute to the development of values that match the economic contributions China is bringing to the global economy," he said.

"The biggest challenges for Chinese companies may not really be about technology and management. It is about sharing values and value integration," said Xiang.

China Daily

(China Daily 08/26/2010 page14)