New model of business education

HKUST created new master’s program tailored for Shinhan

By Kim Da-ye

When a company’s determination to globalize and an institution’s dedication to educate globally talented individuals meet, a unique business education model that makes a good — or better depending on the needs — alternative to a master’s of business administration (MBA) is born.

Hong Kong University of Science Technology (HKUST) whose business school, was ranked 10th on the Financial Times’ 2012 global MBA rankings, newly created the master’s of science in Global Management last year.

This program isn’t open to everyone but for meticulously selected employees of the Korea-based Shinhan Financial Group.

It is the very first time for the HKUST Business School to tailormake a master’s program solely for a partner corporation.

The program is a good test bed for exploring how a business school can diversify its offers — and possibly a source of revenue — and how a company can provide high-quality education to employees within a relatively short period of time.

The core subjects and electives were handpicked among existing classes from HKUST’s MBA program according to Shinhan’s needs while the duration was shortened to 10 months.

The students spend six months in Hong Kong and another four back at work in Korea. In the final four months, the students complete a group project, applying what they learned in dealing with important issues the company faces.

The story of the exclusive partnership goes back to 2008 when Shinhan decided to open a global training center in Hong Kong. Shinhan is Korea’s third largest financial institution whose services range from banking and credit cards to securities.

According to Park Jin-su, the senior manager of the business management team, the financial group felt the limit of the domestic market and the need to expand abroad. What it needed the most were employees capable of leading that globalization process.

To find the solution, the firm formed a task force, joined by a consulting firm, which concluded that setting up a training center in Hong Kong was the best option.

Hong Kong was the ideal location for Shinhan as it already had an established local branch there and the Asian financial hub is in China, which the firm hopes will become its largest overseas market.

But a financial crisis hit the world in the fall of 2008, forcing businesses, especially financial institutions, to lay off employees and cut down on operating costs.

Shinhan, however, chose to continue the project. The corporation rented an office for classes and apartments for the employees’ accommodation in Hong Kong while partnering with Euromoney Training for teaching. Park said that cheaper rents were one benefit of the financial crisis.

The training center was launched in early 2009. Each class consisting of 50 students lasted six months.

By mid-2011, five classes graduated from the center, and Shinhan decided they needed a more intensive program. The firm approached HKUST Business School for cooperation.

Chris Tsang, the executive director of MBA and M.Sc. Programs of HKUST Business School, said in a phone interview that the school decided to work with Shinhan and create a separate major for their dedication to training.

“The employees stayed in Hong Kong away from the company, and the firm invested a lot into the project. We were eager to work with Shinhan because they had that commitment,” Tsang said.

The master’s program started in June 2011. Throughout the summer, the students studied the core subjects including macroeconomics, marketing and accounting. Lectures by HKUST professors took place in Shinhan’s own training center.

When the actual fall semester began, the employees moved onto electives and joined MBA classes at the HKUST campus. Tsang said that taking the electives with other MBA students would be one of the program’s greatest benefits as 90 percent of the MBA students come from outside Hong Kong and more than 50 percent are non-Asians.

Kang Seok-jin, a senior manager at the strategy and planning department of Shinhan Bank, is among 27 selected employees studying the program. He said that while interacting with foreign students, he learned not only to open up culturally but also to broaden his comfort zone in business.

“The program helped boost both my flexibility and confidence, which I think are related. Rather than doing well in my area only, I now aspire to play on a bigger field,” Kang said.

Tsang also highlights electives on China available for the Shinhan employees. They include Financial Market in China, Managing in Asia and China’s External Relations and Their Economic Impacts.

The students finished electives by December and returned to Korea. They are now carrying out their final projects back at work.

The company provided in advance HKUST with a list of issues to be dealt with, and the school came up with several group projects to address them.

Each group consists of four to five students who would meet after work or over the weekend. The project requires them to conduct academic research as well as consult their advisers in Hong Kong in online conferences.

At the end of the four months, faculty members of HKUST will fly to Korea and evaluate the groups’ final presentations, which accompany final reports on the projects.

In Kang’s case, his project intends to contribute to the successful implementation of Shinhan Financial Group’s “matrix system.”

As consumer demands for financial products diversify, Shinhan, which has a bank as well as a securities unit, tries to provide cross-affiliate services, combining different types of services from various affiliates and providing them as a package for private banking and corporate customers.

Hana Financial Group was the first domestic entity to try such a service beginning in 2010, followed by Shinhan. The matrix system is still in its infancy in Korea and thus made a useful subject for the project.

It may be every Shinhan employee’s dream to get into the program — the tuition and living expenses are fully covered by Shinhan — but the admission process is tough.

The selected employees are usually managers who have been with the company for seven to 10 years and who the company believes could grow into its future leaders.

On the top of that, they need to pass HKUST’s own criteria, the same as those for other graduate students. Tsang said that candidates are required to take an English proficiency test and the GMAT exam in some cases and have at least five years of work experience. Tsang also flew to Korea to interview each candidate.

Some 40 employees passed the internal evaluation, but only 27 made it to Hong Kong. Gathering a sufficient pool of qualifying employees also poses challenges to Shinhan, so running the program every year would be difficult, an official in charge said.

For HKUST Business School, the collaboration with Shinhan could be a starting point for providing a similar kind of corporate education.

Tsang acknowledges that many Asian companies are in a similar situation to Shinhan. They see the boundaries of their turf and seek opportunities beyond their own home ground to grow further. HKUST would be happy to be work with other interested companies but for the school their commitment would be the most important criteria.

“If you look at our portfolio, we do not have many programs. We are very cautious. We want to do it right. We will welcome a company’s approach if they have the commitment,” Tsang said.