T
he HKUST Business School is now one of the world’s top 75 business schools offering Master of Business Administration (MBA) programs, according to this y e a r ’ s b u s i n e s s e d u c a t i o n rankings, released in January by the Financial Times.The School was ranked on the Financial Times list for the first time this year. It is the only business school from Hong Kong and even Asia to make the prestigious list. It is ranked alongside 46 schools from the USA, 21 from Europe, four from Canada, two from Australia, and one from Mexico.
The survey considers the position of a school based on three broad dimensions: value and quality of the MBA; diversity; and research. The heaviest weighting (55% of the total) assesses the purchasing power of the MBA in the marketplace as reflected by j o b - r e l a t e d f a c t o r s s u c h a s salaries. In view of the recent economic crisis, this generally p l a c e s A s i a n s c h o o l s a t a disadvantage. However, the HKUST Business School scored
Inside
this
issue:
High flyer…page 7
Top-Ten Tables (source: The Financial Times 24 January 2000)
Finance Department (Alumni recommendation)
1. University of Toronto 2. University of Chicago 3. New York University 4. University of Rochester
5. Hong Kong University of Science and Technology
6. University of Pennsylvania 7. Columbia University 8. Rice University
9. Brigham Young University 10. Vanderbilt University
International Faculty
1. Nimbas 2. IMD 3. INSEAD
4. Hong Kong University of Science and Technology
5. London Business School 6. University of Melbourne 7. City University Business
School (UK) 8. EAP 9. Thunderbird 10. Columbia University
International Course Content
1. Nimbas
2. Manchester Business School
3. Hong Kong University of Science and Technology
4. Northwestern University 5. Thunderbird 6. Rotterdam School of Management 7. HEC 8. ITESM 9. University of Melbourne 10. IMD
well in the area for aims achieved by its MBA degree holders (defined as the extent to which alumni fulfilled their goals or reasons for doing an MBA).
The HKUST Business School is strong in the areas of diversity and research, the other two main focuses of the survey. Within the categories of diversity, it ranks fourth in the world (after Nimbas i n t h e N e t h e r l a n d s , I M D i n Switzerland and INSEAD in France) for its international faculty; and third for its international course content (after Nimbas and the UK’s Manchester Business School).
In terms of research, the School ranks 40th based on faculty publications in top journals and is one of the only 15 schools in the survey that possess a 100% PhD-qualified faculty.
The School’s Finance Depart-ment ranks fifth according to rec-ommendations from alumni.
Dean Yuk-Shee Chan of the HKUST Business School hailed the inclusion of an Asian business school in a major international ranking exercise. “This is the first
time a head-to-head comparison has been done between business schools on a world scale. We are most delighted that the Financial Times survey has put the HKUST Business School on the world map of top MBA programs and that we have performed well in the areas of faculty and program quality by international standards,” said Dean Chan.
“But the survey results also indicate a big gap between the best Asian schools and their elite
counterparts in North America and Europe, which have time-honored standings and reputations and substantially more resources dedicated to faculty, facilities and program support,” Dean Chan continued.
The Financial Times ranking marks yet another significant development of the School in recent years. In 1998, the School was ranked one of seven top Asian b u s i n e s s s c h o o l s b y t h e International Herald Tribune; and
i t s I n f o r m a t i o n S y s t e m s department was ranked second in Asia and one of the best 25 in research productivity worldwide by Decision Line . In 1999, the Business School became one of the first two Asian business schools to be accredited by the A A C S B — T h e I n t e r n a t i o n a l Association for Management Education. In the same year, Economic Inquiry ranked HKUST a s t h e m o s t p r o d u c t i v e i n economics research in East Asia.
NEW INITIATIVE ENHANCES COMMUNICATION SKILLS
T
he Business School, with the help from the University, is investing extra resources to embrace English communications training into undergraduate courses with effect from this Spring term.The new initiative will see professional English language instructors from the University Language Center helping to improve students’ communication skills during the normal course of academic studies.
Students will be completing written assignments from course instructors in the same way as before, but one of the assignments (usually 1-2 pages and content-related)
per course will first be reviewed by the Language Center instructors for assessment and feedback. It will then be passed back to students for revision, and then the students will be required to submit the paper to the subject course instructor for content grading. The Language Center’s assessment will constitute 5-10 percent of the grade for the assignment.
“This attests to the School’s on-going initiative to pro-mote internationalization in teaching and learning,” said Professor Kar Yan Tam, Associate Dean and Undergradu-ate Program Director. “It also responds to comments from
employers and the corporate sector for the need of good communication skills among new company recruits,” he said.
He said with improved communication skills, students are likely to be in a better position in terms of job placement and career advancement upon graduation.
The current pilot phase focuses on year-one business students only. In the future, the University and the School intend to provide resources to expand this initiative to in-clude all undergraduate students and enhance it to inin-clude oral communication skills.
T
here is no doubt that the competitive landscape of China will never be the same again since the country’s accession to the World Trade Organization. Executives doing business in China must now more than ever focus on how to stay ahead in China’s market and to make the most of the opportunities WTO membership offers.Meeting the China Challenge, a five-day intensive management program, is tailored to serve senior executives who have a keen interest in developing their expertise and competency in doing business in China. The program boasts a select group of top-notch faculty with extensive experience in corporate consultancy and executive teaching about China business. It provides participants with valuable insights into the China market and up-to-date management techniques that are critical for success in this formidable marketplace.
“This is a very fast paced, intensive program. It is therefore very important that the instructors speak the same language and have the same business orientation as the participants in order to facilitate constructive dialogue and interaction within the
N
ew facilities are now available on the HKUST campus for the Business School’s executive development programs. Located on the top floor of the newly-completed University Annex, the facilities cover an area of 1,074 square meters and feature a 50-seat, purpose-built lecture room with break-out rooms, a walk-in lounge, a roof-top garden and an office area.On the heels of the opening of the facilities, the School has commissioned work to convert an additional adjacent roof-top area into a 80-seat case room. The new room is expected to be completed by the end of 2000.
The executive education floor is named Shui On Center for China Business and Management, in recognition of the contribution made by Shui On Group towards the building of the Annex.
The Annex is a six-storey extension to the University academic complex. It was officially opened in December 1999 and was blessed by major donors and supporters of HKUST including representatives from the Hong Kong Jockey Club Charities Trust, Chan Tseng-Hsi Foundation and Dr and Mrs Thomas Chen, Shui On Group and Sir Tang Shiu Kin Fund. The fifth floor of the Annex is named Hang Lung Professional Education Center.
EXECUTIVE EDUCATION
INTENSIVE PROGRAMS FOR BUSINESS ELITE
NEW EXECUTIVE
EDUCATION FACILITIES
classroom,” said Kitty Chan, Director of Executive Programs and External Development.
Participants from last year laud the program. “It was spectacular. I really appreciate the breadth and depth of the knowledge of HKUST faculty and the value their teaching can create to executives who need to handle the complex business issues in China,” said Lee Wee Koon, Chief Accountant, Sime Darby Hong Kong Limited.
The program covers core business issues on China business including the economic and political e n v i r o n m e n t , c r o s s - c u l t u r a l m a n a g e m e n t , distribution and entry strategies, human resources challenges, marketing, legal issues, joint-venture management, negotiation, and case studies. It will be presented in the newly-built, state-of-the-art executive teaching facilities of the School from 10-14 April 2000.
The School has offered a wide range of executive programs to cater to the diverse needs of corporations and executives in the Asian region. For example, the Graduate Diploma in Management is a one-year, part-time program designed for executives, entrepreneurs and professionals to enhance their general management skills. The School also designs customized executive development programs for corporations seeking active ways to groom their executives for the future. Examples are the Management Program for S e n i o r C h i n e s e G o v e r n m e n t Officers, Accelerated Development Programs for MTR Corporation, M a n a g e m e n t D e v e l o p m e n t Program for Yaxing-Benz (a joint venture of DaimlerChrysler), to name just a few.
Web site: http://www.bm.ust.hk
Alumni representatives of the inaugural class of Kellogg-HKUST (KH01) EMBA program, and Steve DeKrey (6th from the left), Associate Dean and EMBA Director, pose in front of a painting donated by the class. The painting, “Early Snow on the Great Wall” by Professor Au Ho-nien, will be displayed on the School’s new executive education floor.
T
he fourth week of January marked the beginning of the third EMBA class of which 41 senior executives from as far away as Singapore, Taiwan, the Philippines, Shanghai, Beijing and even Seoul gathered around the HKUST campus for their first live-in session.The profile of the new class bears much resemblance to its predecessors. The average age of this year’s intake is 37; each member has about 14 years of work experience, and the median annual remuneration is over US$180,000. Most of the class members hold a first degree from North America, Europe and other Asian countries. Around 40 percent of the participants are non-Asians and 30 percent work outside Hong Kong. They will fly to Hong Kong twice each month for the weekend sessions. This is also the first time the program has enrolled executives from non-profit organizations - World Vision and World Wide Fund For Nature, and an entrepreneur from the Chinese Mainland. In addition, the Hong Kong Jockey Club has sponsored four of its executives to the program while FedEx, also a
repeat sponsor for three consecutive classes, has three. Why did they choose this program? Word of mouth, the Kellogg partnership, and the international mix of the many aspects of the program are the most commonly cited reasons.
Ray Sluk, Managing Director of China Operations for FedEx, said, “it was highly recommended by former colleagues at FedEx who went through the first two programs.” Margaret Cheng, Human Resources Generalist and Vice-President at JP Morgan, said, “The partnership is a big attraction and Northwestern University is well known throughout the US.” Sung Sik-Yang, Business Development Manager at Southco in Korea credits the heterogeneity and international nature of the class. “The people in the course come not only from all over Asia but also from all over the world. The professors also reflect a more global range of experience and background than any other courses in the region.”
Program Director Steve DeKrey is pleased with the
growing interest from across the region and the business spectrum. “The classroom interaction is one of the major benefits of the program. It is just like having 41 consultants sitting in a boardroom with each of them bringing in their unique expertise and years of business experience”.
EMBA THIRD INTAKE
A group of Yaxing-Benz executives participate in the “Send People Through the Mesh” which is designed to enhance team-building.
Dean Yuk-Shee Chan
FROM THE DEAN
I
would like to first wish all the readers of our Newsletter a very happy and fulfilling Year of the Dragon! We are very delighted that this New Year has brought yet another significant recognition bestowed on the School. From the early days since the School was established, its vision has been to become a premier international business school in Asia. Hence, the School’s inclusion in the Financial Times’ list of the world’s top-75 businessschools is most gratifying as we enter the new millennium (please see more details in our front-page story).
The rankings, however, point to an important issue that is facing most Asian MBA programs. Their graduates generally are “undervalued” by the market. While the HKUST Business School is ranked among the top 10 in categories such as international faculty background, international course content and the finance specialization, the salaries of our graduates are among the lowest in the top 75. This suggests that more needs to be done to help companies recognize the special qualities of our students, and by doing so, also help our MBA graduates expand their career opportunities – a “win-win” outcome for all.
At the beginning of the Y2K, I am also delighted to report two new initiatives for our undergraduate students, which we have planned in response to feedback from the business community. It is public consensus that in order for Hong Kong to achieve and maintain its status as a world city, better communications skills, particularly in English, are crucial. Our first initiative, which combines English writing and speaking training with our business curriculum, is designed with the objective to enable students to integrate the use of English effectively in their overall learning (related story on page one). While the above program aims to improve the English communications skills of our undergraduate business students at large, a second program has been designed to further the Business School’s goal to help develop students with strong international exposure and leadership skills, another priority area suggested by our corporate leaders.
The proposed program, which is currently categorized under the new title BBA (Global Business) for JUPAS admission beginning in 2001, will offer a select group of 25 to 30 students admitted each year a multitude of enrichment programs that will enhance their international exposure, critical thinking, team-work and leadership skills. The enrichment programs will include a one-semester mandatory exchange program abroad, participation in international case competitions against top business students in the world, and opportunities for internship or work-study with major corporations. Students in this special program can also choose to have a double major as allowed by the program schedule. With limited places, students in this new program will be admitted on a very competitive basis.
As we launch these new programs, we look forward to collaborations with and support from the corporate community to make them a success as we together develop the future business leaders of Hong Kong. As usual, we will be delighted to hear your comments and suggestions.
HKUST Business School
Dean: Yuk-Shee Chan
Associate Deans: K.C. Chan, Steve DeKrey, Kar Yan Tam Newsletter Editors: Elaine Chu, May Hung
Sub-editor: Virginia Unkefer
Contact us: [email protected] or [email protected], fax: (852) 2358 1467 Website: http://www.bm.ust.hk
© 2000 by the School of Business and Management, the Hong Kong University of Science and Technology. All rights reserved.
F
rancis Lui and Chu Zhang should have every reason to celebrate the dawning of the new millennium. With effect from 1 January 2000, Lui was promoted to Professor of Economics and Zhang to Associate Professor of Finance.Professor Lui joined HKUST as Senior Lecturer in 1991. He came from the State University of New York at Buffalo, where he was Associate Professor of Economics from 1991-93. He is also the Founding Director of the Center for Economic Development, HKUST. His research interests are economic growth; social
security; corruption; Chinese economy; and macroeconomics.
Dr Zhang came to HKUST in 1997 as Assistant Professor. He had been on the faculty of University of Alberta since 1991. He also taught at the School of Management of Fudan University from 1984-85. His research interests focus on theory and empirical study of asset pricing.
FACULTY PROMOTION
PROMOTIONS
Francis Lui Chu Zhang
F
i v e y e a r - t h r e e H K U S T b u s i n e s s undergraduate students completed an international business course that featured close interaction with their counterparts from the School of Business of the University of Wisconsin-Madison (UW-Madison) during this past Fall semester.The course was initiated and spearheaded by the School of Business of UW-Madison. Other participating universities included Università Bocconi in Milan, Italy and Pontifcia Universidad Catôlica in Santiago, Chile.
The course had some 15 business students from UW-Madison split into three teams. Each team worked with a team of five students from each of the three participating universities. The students were asked to work on a project involving the international positioning of the large manufacturing firm Johnson Controls. Based in Milwaukee, Wisconsin, the company is a leading maker of automobile searing and interiors, along with automobile batteries. Some of the executives of the company were available to the students for advice throughout the course, via electronic means.
The communication between the UW-Madison teams and the other participating teams thousands of miles away was mainly by email and a dedicated chat-room on the Internet. The course concluded with a face-to-face discussion of all parties involved (students, faculty at each institution and executives of the company, from their operations in Milwaukee, Brussels, Singapore, and Sao Paulo) via a video-conferencing link in December.
Dr Wilson Tong, Associate Director of Undergraduate Programs and coordinator of the course, said the course successfully exploited the latest of available technologies
UNDERGRADUATE STUDENTS GAIN
GLOBAL EXPOSURE THROUGH
INTERNATIONAL LINKS
to allow participating students to reach out internationally and think through ideas with their partners who were living in other parts of the world. “As a result of this whole process, a genuinely international experience was created for all the students who were involved,” said Dr Tong.
We b - b a s e d t e a c h i n g i s c o m m o n l y implemented at the HKUST Business School. The Accounting Department participates, on a regular basis, in an international accounting course developed and led by the San Diego State University. The course is research based and involves students from Universite de Fribourg in Switzerland, the Universidad Autunoma De Madrid in Spain, and the HKUST Business School. In addition to faculty advisors, accounting standard setters and consultants are invited to answer student questions. Communications between the participants are via email, ICQ and a weekly Internet video-conference.
The photo shows Dr Tong (far left, second row) with the HKUST team. Front row from left: A n g e l a S i n ( A c c o u n t i n g ) , E s t h e r Wu (Marketing), Dennis Lai (Economics); second: I r e n e L e e ( F i n a n c e ) a n d B r i a n Wo n g (Management of Organizations) during the video-conference in December.
WATERMARKING TECHNOLOGY
TO PROTECT DIGITAL PROPERTY RIGHT
A
multi-million dollar project that aims to develop a secure and convenient protective infrastructure for the trading of digital content is being carried out by a group of Hong Kong professors.Led by Kar Yan Tam, Associate Dean of the HKUST Business School and Professor of Information and Systems Management, the project has received more than HK$4 million from the Industry Support Fund from the Hong Kong Government as well as other support from local industry.
According to Professor Tam, the project has two main objectives. First, it aims at developing the technology required to protect the intellectual property of content creators. Second, it explores the business potential of such a trading infrastructure and its deployment in Hong Kong. “The emergence of e-commerce in Hong Kong is hap-pening at an unprecedented pace as people start to real-ize that this is going to be the mode of the future and that there are opportunities,” said Professor Tam. “But certain kinds of businesses require more protection of the intel-lectual content of their products than the others,” he said. Consider the following two scenarios. Imagine a self-employed security analyst who spends months to develop financial forecasts for a listed company and who would like to sell this information to the public over the Internet. Selling by volume, he/she would like to charge HK$5 per view of the report. Similarly, an independent artist who composes a song would like to sell the song directly to the public at HK$2 per play over the Internet.
The two scenarios share common features. First, they involve a direct sale from the digital content provider to the end customers. Second, unlike existing online stores such as amazon.com whose main business is to receive
orders over the Internet and then to deliver physical products to the customers, the pure digital market that our analyst and song composer are pondering to enter will see products purchased and consumed instantly on the same platform. Third, both involve a high production cost (preparing the forecast and composing the song) and relatively low reproduction and distribution costs.
Obviously, the key concern here would be to protect the content from being freely copied by others if a product is to be offered online.
There can be two approaches to address the issue of content protection. First, content can be restricted to users who provide the right authentication (e.g., user name and password). Second, ownership of digital content can be asserted using a digital watermark embedded in the content. The project of Professor Tam’s team focuses on watermarking technologies.
DIGITAL WATERMARK
A digital watermark allows a small piece of information to be digitally embedded in the content itself. In the case of a song, it could include the merchant identity, purchaser identity, transaction details such as date, price, license scheme, etc. The way to insert a watermark into a document is called a watermarking scheme. According to James Kwok, Assistant Professor in the Department of Information and Systems Management, designer of the watermarking technologies, a good watermarking scheme will meet the following criteria:
• The quality of the content is unaffected. The user should not, for instance, detect any difference between a song with a digital watermark and one without a watermark.
• The watermark should be robust enough to withstand additional processing such as c o m p r e s s i o n , w h i c h i s commonly applied to audio content when sent over the Internet.
• Unauthorized people should find it nearly impossible to retrieve and change the digital watermark, otherwise the effect of the watermark will be compromised.
The digital watermark can also store license information to maximize the benefits of product repackaging, which is essential in the information economy. For example, it is possible to include different pricing schemes including royalty payments in the digital watermark. When the player receives the song, it will charge the customers according to the license information embedded in the song.
The following graph shows the trading cycle of digital songs over the I n t e r n e t u s i n g t h e t e c h n o l o g y provided by this research project.
Professor Tam noted that, “the nature of the pure digital market poses new challenges to the traditional approach to pricing, delivery and customer relations. This project will provide the vital platform for this new form of business to realize its potential.”
Other professors involved with the project are K.H, Pun, Associate Professor of Computer Science at the University of Hong Kong, and Shing-Chi Cheung, Assistant Professor in the Computer Science Department, HKUST. In addition to the Industry Support Fund, the project has received support from ACI, the song composer/writer/ singer organization CASH, Hong Kong ISP Association, Hong Kong Police, and the local publisher Commercial Press.
Web site: http://www.dpri.org
LOCAL TECHNOLOGY EXHIBITION
T
he School participated in an exhibition on innovation and technology held in the Hong Kong Convention and Exhibition Center during the last five days in November 1999.The exhibition, “Innovation 2000”, was organized by the Industry Department of the Government and the Hong Kong Productivity Council. It showcased the achievements in technology applications of local industries and university-industry partnerships. The School’s exhibits, part of the 42 booths staged by the University, featuring its program offerings and technology projects such as digital watermarking technologies, and the Mondex Internet Payment, attracted a lot of interests from the visitors.
James Kwok is Assistant Professor of Information and Systems Management at HKUST, email: jkwok@ust,hk Kar Yan Tam is Associate Dean and Professor of Information and Systems Management at HKUST Business School; email: [email protected]
BUSINESS FORUM
Demonstrating the watermarking technology project at “Innovation 2000” are Kar Yan Tam (far right) and assistants Kai Fung Tsang (far left) and Andre Chan.
F
air is a word with changing definitions. But the level of fairness that one will accept is now known to be a negative function of cost, according to findings of new research conducted at HKUST. The higher the cost, the lower the level of fairness, and vice versa.For example, in a speech to a super-market trade group Mr. Fairrington, presi-dent and chief operating officer of Hannaford Bros. Co.,
posed the following questions to super-market CEO’s: “... are we fairly compensated f o r c a r r y i n g t h e manufacturer’s broad line of products and for serving as a way to in-troduce new products?” The Grocery Manufac-turers of America re-sponded immediately to F a i r r i n g t o n ’ s p r e -sentation. “Fairness,” said C. Manly Molpus, president-CEO of the trade group, “is also an issue with manufac-t u r e r s . F a i r n e s s manufac-t o
manufacturers means eliminating, not transferring, costs and implementing indus-try guidelines on issues such as invoice d e d u c t i o n s a n d r e c l a i m c e n t e r s ” (Advertising Age May 11, 1992, p. 6).
Clearly, the issue of fairness is explicitly discussed by marketing practitioners but it is not always clear, as the above example demonstrates, whether the fairness argument is used to enhance one’s own strategic position or to represent a genuine belief in “abstract” standards of fairness.
At the same time, growing evidence from the fields of marketing, economics, and psychology indicates that individual behavior in an economic exchange context cannot be accurately described by the rational, self-interested assumptions of t r a d i t i o n a l e c o n o m i c s . I n m a n y circumstances, people behave as if they care not only about their own well-being, but also about the well-being of others. In a bargaining context, for example, researchers argued that negotiators’ offers are often more generous than the amount actually necessary to induce the other party to accept and that there is an equity norm
WHAT PRICE FAIRNESS?
Original research “What Price Fairness? A Bargaining Study” by Rami Zwick and Xiao-Ping Chen, Management Science vol. 45, no. 6, June 1999
against the full exploitation of a fortuitous situation that provides a clear power advantage.
T h e r e c o u l d b e m a n y d i ff e r e n t rationalizations for such behavior, but the laboratory tests conducted by Professors Rami Zwick and Xiao-Ping Chen indicate “costs” as having a very compelling impact. “In most situations, humans are aware of the costs involved when deciding what level of fairness they would accept and will make a decision accordingly,” said Professor Zwick. “But emotions may also interfere if a d e m a n d i s p e r -ceived to be too extreme,” he said. People are inher-ently averse to be t r e a t e d u n f a i r l y ( b a s e d o n t h e i r o w n s u b j e c t i v e judgment) and are willing to suffer eco-nomic loss in order t o p u n i s h t h e predator.
BARGAINING EXPERIMENT
In the Zwick and Chen study, 302 university students were asked to negotiate in pairs to split HK$50. Half of them were assigned to be low-cost negotiators, meaning that if an offer (either made by them or the person with whom they are negotiating) were rejected, they would be charged a relatively low fee from HK$0.5 to HK$5. The other half were high-cost negotiators subjected to fees from HK$10 to HK$14.5 for each rejection.
Negotiations were done on a one-on-one basis. Through a computerized matching mechanism, a low-cost negotiator (one in a stronger position) always dealt with a high-cost negotiator (one in a disadvantageous position). The computer determined who made the first offer. If the first offer was rejected, the other side had the right to make the second offer. If the second offer was rejected then the right to make the third offer went back to the negotiator who made the first offer, and so on. For each rejected offer fees were deducted from both sides, therefore a cost
for delaying or disagreeing was imposed. The maximum period of offers per game was 12. If the two sides were unable to agree on an offer by the 12th period, then
the negotiation ended in disagreement, meaning that neither took any from the HK$50 but rejection fees were still deducted from both.
The bargaining game was repeated several times but the players did not bargain with the same player in two consecutive games. All bargaining was done through the computers and no other form of communication was allowed between the participants throughout the experiment, which lasted for 90 minutes. Participants were not told, even after the experiment, the identity of the people they dealt with in the experiment.
The focus of the experiment was on the impact of “price” in a person’s pursuit of fairness. This impact is checked in different ways by directly manipulating the price and the combinations of players involved.
FINDINGS
The experiment yielded the following results:
The players were almost always conscious of their own strategic positioning. The low-cost players tended to exploit their advantageous positions while the high-cost players tended to make an offer that would maximize their share. This is confirmed by the fact that when the low-cost players moved first, they often requested more than 50% of the pie (HK$50), whereas when the high-cost players moved first, they frequently demanded less than 50% of the pie. The distribution of the
net payoffs at the end shows that usually the stronger party gets a bigger slice of the pie.
However, the find-i n g s a l s o s h o w t h a t negotiators can have c o n c e r n s o t h e r t h a n monetary gains. Two
types of behavior were observed. First, there were subjects who rejected the last period offer when they should have preferred accepting anything over rejection and terminating the negotiation because of the rejection costs involved.
The second type of behavior was
that some subjects rejected an offer and subsequently made a counter offer that was disadvantageous to b o t h s i d e s . T h e d i s a d v a n t a g e o u s counter-offers were mostly made by high-cost players (102 out of a total of 121 such offers), although this behavior was not very common even among high-cost players (out o f 1 5 1 h i g h - c o s t p l a y e r s , 9 8 n e v e r made such an offer). The number of players who made such offers and the proportions of the offers follow a clear pattern: they consistently increase with the cost to the low-cost player and decrease with the cost t o t h e h i g h - c o s t player. This suggests that even though the high-cost players use rejection as a means t o p u n i s h u n f a i r b e h a v i o r b y t h e i r negotiating partner, they are still mindful of h o w e ff e c t i v e t h e punishment is and
h o w m u c h c o s t t h e y h a v e t o b e a r themselves.
“The results suggest that most people behave in a profit-maximizing way and are able to accept t h e l e v e l o f f a i r n e s s corresponding to their own strategic positioning. They are willing to punish perceived unfair behavior although by doing so they also suffer,” said Professor Zwick. “Fairness has a price such that the higher its price, the lower the ‘demand’ for it. This suggests that demands for fairness are subject to cost-benefit evaluation, are in this sense deliberate, and are well thought out,” he concluded. Xiao-Ping Chen is Assistant Professor of Management and Organization at University of Washington at Seattle. She was Assistant Professor of Management at HKUST when the research was conducted. email: xpchen@u. washington.edu Rami Zwick is Associate Professor of Marketing and Director of the Center for Experimental Business Research at HKUST, email: [email protected]
“Fairness has a price
such that the higher
its price, the lower
the ‘demand’ for it”
“In most situations,
humans are aware of the
costs involved when
deciding what level of
fairness they would accept
and will make a decision
accordingly. But emotions
may also interfere if a
demand is perceived to be
D
ynamic and challenging are the two words Kannie Kong (Marketing 95) used to describe her present job – senior c o n s u l t a n t a t A n d e r s e n Consulting. Ms Kong embarked on her consulting career as an analyst at Andersen Consulting five years ago. “I didn’t know much about consulting when I was about to graduate. It was at a campus recruitment talk when I got a grip on what consultancy was about, and I thought that was the kind of job that I would like to pursue,” Ms Kong says.Today, Ms Kong is a senior consultant specializing in change management in organizations. Her scope of work spans the whole spectrum of human capital design a n d d e v e l o p m e n t . “ B r o a d l y speaking, change management involves aligning an organization’s p e o p l e , p r o c e s s e s a n d technologies with its strategic goals. My role is to advise clients on how to manage the whole process, help them build human capital and enhance human performance,” explains Ms Kong. O n e m a y w o n d e r h o w a
BROAD-BASED TRAINING KEY TO SUCCESS
ALUMNI NEWS
“
I am rather like a matchmaker in a sense that I help clients cast about for potential merger partners who have mutual interests and also the right chemistry.” That’s how Paul Lin sums up his role as corporate finance consultant at Arthur Andersen. The company is a global professional services organization providing multidisciplinary business solutions to help its clients improve their business performance.Paul Lin has worked on a number of mergers and acquisitions since he joined the Global Corporate Finance Group of Arthur Andersen in 1997. “Mergers and acquisitions can play a pivotal role in a company’s growth strategy by expanding its business lines, allowing it access to new markets, or facilitating its research and development process,” explains Mr Lin.
“We are sort of a strategic partner to our clients who would like us to see them through the whole merging and acquisition process. In short, we provide financial advice for locally listed companies on their mergers and acquisitions activities and expedite cross-border acquisitions for multinationals who want to zero in on the Greater China market. More recently, we have also led a string of private placements such as fund raising for hi-tech start-ups,” he continues.
Mr Lin reckons that his job calls for astute thinking and an almost protean ability to change business tactics whenever the situation requires it. He also merits the impressive connections of Arthur Andersen that certainly help with business negotiations, as well as with cementing the interests of the companies involved.
Mr Lin has high praise for HKUST where he earned his full-time MBA degree in 1996. “HKUST is so young, dynamic and energetic, qualities no other local institution comes close to. The faculty are very international and they bring with them the latest management knowledge and stimulate us to think from a global perspective,” Mr Lin says. “In a nutshell, the MBA has provided me a much better understanding of the overall business picture. And it always helps me to get to know my clients and their business much faster and easier.”
K
it Tse (Marketing 95) and Suzette Foo (Management of Organizations 97) are among a few who have taken a road less traveled since their graduations. Both are now serving the Police Force, a domain where females are still in a small minority.Within the five years of her tenure as a policewoman, Kit Tse has been involved in a number of operation units including the patrol sub-unit, field patrol detachment (in Sha Tau Kok), task force, detective, and police tactical units. She is now a Senior Inspector with the Criminal Intelligence Bureau. “It is like scaling a vertical learning curve. You have to make yourself accustomed to the new environment and get on with your work really fast. It is part of the training process because we have to deal with uncertainty everyday and staying agile is very important,” says Ms Tse.
Ms Foo has been with the Force for two years and, like all new recruits, she must serve three years as a Probationary Inspector. Now a commander of the police tactical unit, Ms Foo is charged with devel-oping and organizing anti-crime operations and pertinent preventive measures. She
A CORPORATE MATCHMAKER
twenty something like Kong can manage to give advice to a client who may be 10 or 20 years older. “This is the tricky part. Gaining their trust is important. I will let them know we are there to help and share with them our past experience and credibility. Indeed, many of our clients are impressed by what we can offer - a well s t r u c t u r e d f r a m e w o r k a n d methodology, let alone a cohort of experts drawn from different parts of the world.”
As one would expect with such a dynamic job, Ms Kong has not lacked for excitement. She has been working with a score of clients from different industries. And every time, she works with a different team from her own company. “I spend over 95 percent of the time working on the client sites. Project duration ranges from a few months to over a year. Whenever I take on a new project, I feel like I am changing to a new job. The culture, environment, and the people are so different. It is very challenging and I gain a lot from it.” She attests that the experience has greatly enhanced
LADIES IN FORCE
reckons that a clear and attentive mind is a prerequisite for her job. “During an operation, we have to follow stringent procedures and take care of every detail. We have to deal with the accused, the victim and the witness. Every move we make and every word we say may bear a legal impact, “ says Ms Foo. When asked if it is difficult to work in a male-dominated environment, both Tse and Foo emphasize that it is not a problem at all. “On the contrary, it has its merits.” Ms Tse goes further, “females are more meticulous and heedful, which not only helps in interpersonal communication but also detective work. Besides, being a minority is not a bad thing at all. It helps you stand out from the crowd.”
Both Tse and Foo concur that HKUST empowered them with the essential training and knowledge to thrive in a competitive world. “HKUST creates an inspiring learning environment and a unique mindset that nurtures creative thoughts and critical minds. And I think these are the qualities that many youngsters are lacking nowadays,” Ms Foo says.
her interpersonal skills and problem solving techniques. She is also able to see things from a wider perspective.
Ms Kong credits HKUST with providing her with a broad-based business training critical to success in the business world. “The business program at HKUST offered a good combination of business acumen and out-of-the-box thinking, which I think is what employers are looking for. Of c o u r s e , a s o u n d a c a d e m i c background has definitely given me a leg up.”
Kannie Kong
ALL FOR THE LITTLE ONES
CHRISTMAS JOY
MENTORING PROGRAM WELCOMES NEW
FACES
T
he Business Mentoring Program celebrated the successful completion of its pilot phase and welcomed in new mentors and mentees in January. Sixteen undergraduate students joined as new mentees and 17 business executives from Friends Unlimited, a non-profit organization of young professionals, signed up as mentors. This is the second year Friends Unlimited has been invited to take up mentorship roles in the program.S p e a k i n g a t t h e w e l c o m e c e r e m o n y , Chairperson of Friends Unlimited Sandy Hung was upbeat that the program had been well received by its participants. “Although it was only a pilot program, everything worked out well. Both mentors and mentees gained a lot through sharing work experiences, business knowledge and life philosophies.”
Teresa Yang (mentor ’99) and Maxie Lai (mentee ’99) represented participants from last year at the occasion.
Maxie Lai, now a year-three student, was
ALUMNI NEWS
delighted that she had joined the program. “It has been a great learning experience and an integral part of my self-development process. I am very grateful to my mentor who has enlightened me in many ways and eventually become a good friend.” Teresa Yang said mentoring was a reciprocal process and both mentors and mentees could gain from this precious experience. She noted, “in order to make the experience more enjoyable and valuable, the key is for both the mentor and mentee to put in efforts.”
The Business Mentoring Program is organized by the HKUST Business School and Student Affairs Office. Its objective is to establish a mentor-mentee relationship between business executives and HKUST undergraduate business students to nurture the academic, career and personal development of the students. It is a six-month program from February to July during which mentors and mentees meet to discuss issues or work on projects together.
S
ophie Chan could not be happier when she won a ticket to London from British Airways (BA). But it was not a prize for some lucky draw or crossword quiz, it was an offer to join BA’s Graduate Programs opened for students from around the world. Chan alongside two other local graduates are the first batch of Hong Kong students recruited for the Programs since their maiden launch 11 years ago.A graduate in Information and Systems Management, Chan applied for the job over the Internet in October 1998 and, after rounds of interviews and assessments in Hong Kong and London, finally joined the airline last October. “I’m thrilled to have the chance to work overseas. It is a precious
GRADUATE LANDS BA JOB
opportunity to gain international exposure. Besides, the job is dynamic and allows me to experience different facets of work in the airline business,” she said.
The Graduate Programs last for 3-4 years, starting with six months of induction training at the London Headquarters. After that, participants take part in three place-ments in different business areas accord-ing to their own interests. “Duraccord-ing the in-duction training, I met with other graduates on the program this year and worked on a couple of projects. Besides learning about the company and its operation, we also supported community services such as doing voluntary work for the local commu-nity near the Heathrow area,” she said.
Chan will start her first placement in mid March as a commercial development execu-tive in the Brands Department. In this role, she is responsible for BA’s brand planning and other brand-related projects. “It’s a real challenge for a fresh
graduate like me. I am so glad that I can draw on the knowledge and expe-rience that I have gained during my tenure as the President of AIESEC and my internship with Merrill Lynch in 1997.”
“At BA, I use my business degree and all of the knowledge sets
Representatives of Kellogg-HKUST EMBA Class 1999 with Katy Lo (second from right).
O
ne third of the Kellogg-HKUST EMBA students (Class of 1999) were out on a fine Saturday night in mid-December for a special Christmas mission.Unlike what was more usual of them, they were not carrying lap-tops or files stuffed with documents, instead they were burdened with more than armfuls of Barbie dolls, Nintendo games, stuffed Japanese cartoon characters, and various other toys that are popular among kids. The destination was up on a hill at a far corner in Shatin near the Prince of Wales Hospital–the Ronald McDonald House–a place where families facing the distress of seriously ill and hospitalized children are given support.
The house accommodates up to 20 families of children who are receiving life-saving care at the Prince of Wales Hospital or other nearby hospitals. Families who are admitted can stay in one of the 20 bedrooms in the house where they may carry on with their normal day-to-day activities while being just minutes away from the sick child’s bedside. The sick child, if granted a few days home leave, may also stay at the house with the rest of his/her family members.
“Our idea is to provide a supportive and loving environment for children suffering from serious illness along with their families. Toys invariably cheer up our sick kids and their siblings. The gifts that we received from the Kellogg-HKUST EMBA class will brighten the lives of the kids, especially in the upcoming festive season,” said Katy Lo, House Manager.
Want to lend a hand or give toys too?
Call 2947 8778 or fax 2947 8780.
Business Mentoring Program 2000 that HKUST gave me every day. I’m especially grateful to the faculty and career counselors there. They were very helpful and gave me useful advice throughout my job search,” Chan said.
The appointment of Sophie Chan (left) was reported in a number of local newspapers. Above is a clipping from Ming Pao Daily News.
CIO FORUM
The School has been invited by Business Week and the consulting company dnmStrategies to participate as a supporting partner in the Business Week CIO Forum, to be held from 21-23 March 2000 in Hong Kong.
In its third consecutive year, the Forum will address current issues concerning Chief Information Officers (CIO) in Asia and their emerging role in helping corporations to weather the harsh business climate. This year, some 18 heavyweight industrialists and academics will speak on some of the hottest topics and issues pertinent to the theme “Mastering the Challenges of Change: Creating a Wired Corporation”. Chris Westland, Head of and Associate Professor in the Department of Information and Systems Management, will deliver a special keynote address to kick off the 3-day conference. He is also among the Board of Advisors of the Forum while Ted Clark, Assistant Professor of the same department, will be a discussion panel speaker.
Westland and Clark have recently co-authored a new book entitled Global Electronic Commerce: Theory and Case Studies. (See story on left.)
C
hris Westland, Head of and Associate Professor in the Department of Information and Systems Management and Ted Clark, Assistant Professor in Information and Systems Management, announced the publication of a new textbook: Global Electronic Commerce: Theory and Case Studies.Published by the MIT Press, the book provides a deep and practical understanding of computer and communications technologies and their use in e-commerce. Each of the 12 chapters of the book contains an overview of a current theory or practice followed by one or more business case studies. The book has been very popular since its publication at the end of 1999.
NEW BOOKS ON E-COMMERCE AND
CHINESE MANAGEMENT
UPCOMING EVENTS
PUBLICATIONS
T
hree MBA students, Shirley Hu, Vivian Wong and Dwight Yang, were each awarded a US$5,000 scholarship by Federal Express (FedEx) in support of their participation in the international exchange program. The scholarship presentation ceremony in January coincided with theFEDEX SCHOLARSHIPS
P
ostgraduate students of the School have been offered more opportunities to broaden their international exposure starting at the turn of the new millennium, thanks to an arrangement between the School and the University of California, Los Angeles (UCLA).A total of 19 participants (16 part-time MBAs, one MBA alumnus, one MSc student and one Graduate Diploma in Management student), attended the UCLA International Management Seminars on the UCLA campus from 24 to 28 January 2000. The group was the first in Asia to have attended the highly popular five-day seminars.
Dorothy Yau, ’98 part-time MBA, one of the participants, spoke highly of her experience at UCLA. “The impact of this p r o g r a m w a s b e y o n d m y o r i g i n a l expectation. We got to meet faculty of the UCLA and visit major companies. As advised by our instructor John Hulpke, we used ‘new eyes’ to see things in LA and learn things from a different perspective. It was a great experience,” she said.
INTERNATIONAL EXPERIENCE FOR
PART-TIME STUDENTS
Professor John Hulpke said, “students were asked to keep a daily log over the five days to put down one key thing per day that was the most inspiring. They also wrote down their ideas on how what they saw in LA could be applied to their own business situations and Hong Kong in general. It was a full, both in terms of activities and exposure, learning experience for all of us.”
MBA Program Director Steve DeKrey said, “we now have some 30 international business schools as our exchange partners and all full-time MBA students are required to study with one of them for one semester during their degree program. Part-time MBA students, because of work obligations, however, often are unable to take advantage of the School’s well-established international network. This new arrangement is created so that they can have an international experience even while in the part-time program.”
For more information and photos: http://teaching.ust.hk/~mgto650a/
FedEx Director ’s Meeting, which was attended by some 60 directors and vice-presidents from the company’s operations in Asia Pacific.
At the ceremony, the MBA students, who had just come back from their exchange semester in the Fall, were invited to share their experiences with the audience.
Pictured at the ceremony are from left Dwight Yang, Shirley Hu, Steve DeKrey (Associate Dean and MBA Program Director), Vivian Wong, David Cunningham (Senior Vice President, Asia Pacific Director, FedEx) and Doris Chan (MBA Placement Officer).
ACHIEVEMENTS
P
rofessor Wilfried Vanhonacker, Head of the Department of Marketing, has been appointed by the International Academy of Management as a member. The academy is the oldest association in the field of management that honors individuals who have made outstanding contributions to the science and art of management. Appointment is by election of the membership.Professor Justin Lin, Economics Department, has won the “1999 Best Article Award” by the Australian Journal of Agricultural and Resource Economics for his paper on “Technological Change and Agricultural Household Income Distribution: Theory and Evidence from China.”
T
hree professors in the Department of Management of Organizations, Jiatao Li, Anne Tsui, and Elizabeth Weldon announced the publication of a new book, Management and Organizations in the Chinese Context.The book, released in December 1999 by Macmillan Press, encompasses the latest thinking on management and organizational issues concerning China’s transitional economy. It examines key topics such as reform of state enterprises, management of international joint ventures, business networks and guanxi (relationships), executive leadership, and Chinese organizational behavior. With contributions from world-renowned scholars on China and leading business executives in Hong Kong, this volume serves as a forum for discussing some of the most important observations and current research on management in the Chinese context.
