HKUST Business School [SBM] Newsletter (Issue 20)

Abstract

[evdate 2003-12-15] HKUST Business School Newsletter Issue 20 Kellogg-HKUST EMBA No.9 in the World page 8 Party Time for EMBA page 7 All-round Training for Students page 15 1 HKUST Business School Dean: K.C. Chan Associate Deans: Gary Biddle, Steve DeKrey, Kar Yan Tam Newsletter Editors: Elaine Chu, May Hung Sub-editor: Virginia Unkefer Writers: Charles Anderson, Kathy Griffin Contact us: bmpr@ust.hk Fax: (852) 2358 1467 Website: www.bm.ust.hk (c) 2003 by the School of Business and Management, the Hong Kong University of Science and Technology. All rights reserved.

From the Dean The latter part of 2003 was a period of action for the Business School as reflected in the expanded content of this issue's newsletter. Many activities and new initiatives took place. The most encouraging news we received came from the Financial Times, which ranked the Kellogg-HKUST EMBA program 9th best in the world. The significance of this achievement for both Hong Kong and the School was recognized by the Chief Executive, Tung Chee Hwa, who joined a celebratory reception at Government House in October. With this support and recognition, the School will strive to continue enhancing its various programs. At the graduate level, our full-time MBA program is attracting a diverse group of

students, while the part-time program continues to be the program of choice for locally based executives. Our International EMBA program recently saw the successful completion of its inaugural class, winning praise from its participants,

all of whom are senior executives involved in business in Chinese Mainland. At the undergraduate level, the Global Business program, launched in 2001, has developed from strength to strength with the addition of more quality enrichment programs. This issue summarizes our experience in running this program over the past 30 months. Two other major new initiatives took place on campus in the fourth quarter. These were the Citigroup International Case Competition and the Junior Achievement Business Plan Competition. Both were inaugural events and were carried out with great success. Looking ahead, as Hong Kong recovers from the aftermath of SARS and its people emerge with an invigorated interest in politics, 2004 should be full of opportunities and challenges for everyone, including the School. We look forward

to your support for our continued efforts to achieve excellence in research and teaching and to serve the community. Wishing you all a successful and prosperous New Year! K.C. Chan Dean December 2003 HKUST Business School Contents From the Dean 1 News 2-3 {????}Mainland Students Add to the Mix {????}Keep Eyes Open in CEPA Deals, Says Ho {????}Focus on Fund Management {????}New Program Adds Depth {????}Good News on The Economy {????}Big Winner from a Small Setting {????}Learning from Experience Citigroup International Case Competition 4-5 {????}Close Competition International EMBA 6 {????}Mainland Executives Gain the Edge EMBA 7-10 {????}Party Time for EMBA {????}Praise from the Top for EMBA Success {????}Promote Tolerance, Says Anson Chan Research 11 {????}Doing Their Level Best Students & Alumni 12-13 {????}Support and Guidance Lead to a Top Job {????}Trailwalker Teams Walk Tall {????}Young Achievers Turn a Page {????}Luncheon Meet {????}Cultural Diversity Benefits All Global Business Program 14-15 {????}Lessons In Soft Skills For Top Students People 16 {????}Promotions and Appointments Photo on this page - courtesy of Robert Lendrum / HBL Network 2 News Mainland Students Add to the Mix The number of international students in the full-time MBA program has increased sharply over the past two years, as more mainland students enrol. Eighty-two per cent of this year's intake of 50 students came from outside Hong Kong, versus 61 per cent in 2002 and 42 per cent in 2001. When the program started in 1991, only 17 per cent of students were non-local. Prof. Steve DeKrey of the Business School said the increase was part of a conscious effort to market the program outside Hong Kong, especially in Asia. He said it brought benefits to everyone. "The mainland students get the major benefit of receiving what is in effect a Western education, without having to leave the region. And having the PRC widely represented helps non-Chinese students learn about China even more," he said. Half the students this year are from the mainland, about 30 per cent are from other countries and the rest from Hong Kong. The share of Japanese and Korean students is also increasing as more people want to learn about China, he added. (see page 13 for related stories) Keep Eyes Open in CEPA Deals, Says Ho The Closer Economic Partnership Agreement (CEPA) between Hong Kong and Mainland China offers many opportunities, but anyone hoping to take advantage of them should first do their homework, Legislative Councillor, Dr Raymond Ho Chung-tai, has advised. The mainland has more stringent requirements for professionals and a different regulatory environment, he told the annual City Seminar for MBA students, alumni and staff. "We must not presume that what lies ahead of us is just plain sailing and we must take note of the possible problems," Dr Ho said, adding it was important for operators to build up a good information-gathering network on the mainland. Dr Ho said CEPA was a tool that provided opportunities for the Hong Kong services sector to expand into the mainland market, and for traditional and emerging industries here to develop. But operators had to learn how to take advantage of what was on offer. He illustrated the possible benefits through the example of his trade - the construction industry - which will see restrictions lifted, market access increased

and the right granted to acquire mainland enterprises outright. Focus on Fund Management The fund management industry is expected to prosper in Hong Kong and China over the next decade thanks to the setting up of Hong Kong's Mandatory Provident Fund (MPF) and the mainland's accession to the World Trade Organization (WTO). Until now, however, there has been little collaboration between academics and industry professionals to foster the sector's development. In October, the School

moved to fill the gap by setting up the Center for Fund Management which will promote original and applied research and offer a range of services to the industry in Hong Kong and China. These will include training and education programs, commissioned research and consultancy support.

With Professor Kalok Chan and Professor John Wei, both of the Department of Finance, as its Director and Associate Director, the Center will draw on faculty expertise from there and from the Departments of Accounting and Economics. New Program Adds Depth A new program for students wanting to enter the finance industry will offer opportunities to work on projects sponsored by companies. The BSc in Quantitative Finance will have its first intake in September 2004 and feature the "Finance Practicum" in the third year in which students solve real business problems under the guidance of their professors. "Students could be working with a fund management company to investigate strategies to see whether they are feasible. Or they could be looking at how to price a new financial product," the Head of Finance, Professor Kalok Chan, said, offering examples of the types of projects students may work on. "Companies could use them as a resource to analyze new ideas." Professor Chan said students would have a unique opportunity to gain the technical and quantitative knowledge they needed to work in the finance industry, thanks to collaboration among several schools in the university. The Business School is offering the program, while the School of Science, School of Engineering and School of Humanities and Social Science will provide specialist instruction in such areas as mathematics and computer science. Dr Raymond Ho Chung-tai Professor Kalok Chan 3 Newsletter Issue 20 HKUST Business School Good News on The Economy Hong Kong's economy is showing signs of recovery, according to a forecast produced by the HKUST's Center for Economic Development in collaboration with The Better Hong Kong Foundation. GDP growth is expected to be 2.5 per cent this year and more than 5 per cent next year - and may even see further increases, according to the forecast. "There is a possibility that real GDP growth will reach 3.3 per cent this year and 5.8 per cent next year if we rely on more optimistic assumptions," the forecast report said. Unemployment will improve more slowly, dipping to 7.5 per cent by the end of the year and averaging 7.2 per cent next year. "For the time being, firms that need to increase output will rely more on raising workers' productivity rather than on hiring more workers," the forecast predicted. Deflation will also decline although the forecasters said it would take much longer than a year for inflation to return to Hong Kong. The report concluded by saying Hong Kong had received two "shocks" to the economy in the form of the Severe Acute Respiratory Syndrome outbreak and, in the opposite direction, new policies of the central government to increase economic co-operation and allow more mainland tourists to visit Hong Kong. It will take a bit more time to realize the impacts of these events, it said. The forecast was based on a model developed by Professor William Chow of the Department of Economics.

Big Winner from a Small Setting Many past winners of the Michael G Gale Medal for Distinguished Teaching have been singled out because of their ability to motivate students in large classrooms. This year, however, the award has gone to someone working in a different setting. Professor Vidhan Krishan Goyal, Associate Professor in the Department of Finance, mostly teaches advanced undergraduate and postgraduate courses in finance where enrolment is on a smaller scale. "The natural motivation of students on these advanced courses can reduce the pressure on their teachers to make the extra effort needed to inspire them to deeper learning and full intellectual development," says the citation by President Paul Ching-Wu Chu. "It is in making this extra effort, and achieving

outstanding results as a consequence, that Professor Goyal excels." His approach is to start with an applied problem, a case study in a real world situation taken from recent news, and relate it to the theory. This means he must come up with new examples every time the course is taught. The idea is to persuade his students to discover the motivation behind the transactions, watch how relationships between stakeholders change and see how the markets respond and work out why. Professor Goyal says: "Although I still plan my class sessions in great detail I am more willing to take risks. I try unconventional learning approaches if

I feel they enhance learning in class. I organize lots of group activities and use a variety of media such as slides that CEOs have used in their presentations to the analyst and investor community." The award was established by the University Council in 1994 to commemorate the distinguished service of founding Council member Michael G Gale. Learning from Experience There's no substitute for experience as Professor Harvey Brightman, the renowned scholar in decision science and acknowledged expert in adult education, proved during his third teaching workshop at the School. Brightman, who has been an executive education teacher for over 20 years, drew 27 faculty members for a full-day session in October followed by two group sessions dealing with specialist areas. Later the Regent's professor emeritus of decision sciences at Georgia State University held a doctoral seminar for 22 PhD students. Course modules in the teaching workshop included attributes of effective teachers, writing learning objectives, designing and presenting clear lectures and presentations, generating interest and showing subject relevance and the basics of cooperative groups and active learning. In his doctoral seminar, the professor aimed to provide participants with practical teaching tips to help them become more effective teachers. He also provided frameworks, theories and teaching models that will help them continually improve their teaching throughout their careers. Prof. Vidhan Goyal (left) receives the top teaching award from President Chu. Prof. Harvey Brightman (5th from left) poses for a photo with some of the workshop participants. 4 Citigroup International Case Competition Close Competition Business schools battle it out with a real-life challenge

It's tough coming up with a major business strategy in 36 hours, especially if you don't work for the company concerned. But that is what was asked of 60 outstanding students from major business schools around the world in the first international case competition to be held in Asia. The contest, sponsored by Citigroup, the global financial services company, and hosted by the School in late October, pitted 15 teams of four from Canada, Denmark, Hong Kong, Chinese Mainland, Singapore, Taiwan, Thailand and the United States against each other on the HKUST campus. Surprise Tactics It worked this way. Each school was presented with the same real-life business case. They had just a day and a half in which to provide recommendations on important issues and challenges facing the company involved. A panel of 16 inspected the results, quizzed the participants, and made their judgment. The case, developed by a team of professors from the School led by Associate Dean Kar Yan Tam, was kept confidential until the formal competition began. Then the company involved was unveiled as the Circle K convenience store chain and the teams were asked to develop a China business strategy for it. The judges, made up of HKUST professors, senior executives from Citigroup and Circle K and other business leaders, chose the University of Texas at Austin as winners. Runners up came from Carnegie Mellon University, the National University of Singapore and the University of Washington. A Balanced Program for All-rounders Branded as an event to showcase Hong Kong as an international center for intellectual exchange, the competition's four-day program also featured a number of high-profile speakers. Stephen Long, Chief Executive Officer, Citigroup Global Corporate Investment Bank, Asia Pacific, gave the keynote address at the opening dinner held at the Hong Kong Convention and Exhibition Center. Ronnie Chan, Chairman of the Hang Lung Group, spoke at the closing dinner at HKUST. Time was set aside for the students to "Experience Asia's World City" when a raft of senior management and economists from Citigroup discussed current market trends and business opportunities in Asia with them in a session moderated by HKUST Head of Marketing Wilfried Vanhonacker at Citigroup's offices. Don Hanna, Managing Director, Head of Economic and Market Analysis for Citigroup, spoke on the economic overview for Asia and Vineet Vohra, Regional Director of Investment Business, Asia Pacific, Global Consumer Group, offered a rundown on the Asian investment environment. Vohra was later joined by Y.K. Fu, Head of Hong Kong Equity Research; Joe Lo, Senior Economist; Frank Slevin, Head of Hong Kong Investment Banking, for a discussion on business opportunities in Greater China. Students were then taken on a half-day tour of Hong Kong. Catherine Weir, Hong Kong Citigroup Country Officer, was struck by the outcome of the whole event. "The competition has been a great success," she said at the closing ceremony. "I was highly impressed by the excellent performances of the students. Their thorough analysis, fluent presentation and confident answers to the judges' tough questions truly reflect the characters of our future business leaders. "I am pleased to see that through participating in the competition, the students managed to gain a better understanding of the business and financial environment of Asia Pacific, especially Greater China." Representatives from participating universities show off their ethnic costumes and pose for a photo with officers from Citigroup and the School at the opening. Stephen Long (5th from the right) of Citigroup was the Keynote Speaker.

From left, Dean Chan, Catherine Weir and Prof. Kar Yan Tam at the announcement of the event.

5 Newsletter Issue 20 HKUST Business School The participants gained from the experience as well. "I was blown away by the magnificence of the case competition," said Andrea Choquette, of the University of Texas. "Citigroup and HKUST really outdid themselves to make this the premier case competition in Asia. It raises the bar for other international case competitions. I will truly treasure it for years to come." Howe Yuin Teo, of the National University of Singapore, appreciated the realism involved, saying: "Being required to come up with a recommended strategy for a real life company in a real time situation really challenged us and brought a sense of realism to all that we have learnt in our business school." A Long-time Vision Comes to Fruition It took almost a year for staff from HKUST and Citigroup to develop the project. HKUST Dean K.C. Chan felt its targets had been met. "The competition was designed as a forum for the exchange of ideas and sharing of experience among students and faculty members of selected top-ranked international business schools. From what we have observed I think we have achieved what we have set out to do." HKUST, which has taken part in case competitions since 1996 but has not until now hosted one, also provided a team. Away from the intensity of the competition, there were awards for the Most Sociable Team - the University of Texas, again - and the Best Ethnic Costume, which went to Thammasat University from Thailand. Corporate Sponsorship Key to Event Success Dean Chan summed up the School's view of the event and Citgroup's participation at the public announcement of the four-day program. "Corporate sponsorships are crucial to the provision of enrichment activities for business students," he said. "These events are very effective in honing students' communications and inter-personal skills. We are pleased to be hosting an event of this scale that allows us to put Hong Kong on the world map of higher educational exchange activities. We are thankful to Citigroup for their generous support." Participating Universities 1. Carnegie Mellon University 2. Copenhagen Business School 3. Fudan University - School of Management 4. HKUST Business School 5. McGill University 6. National Chengchi University - College of Commerce 7. National University of Singapore - NUS Business School 8. Peking University - Guanghua School of Management 9. Shantou University (Honored observer) 10. Singapore Management University 11. Sun Yat-sen University - Lingnan (University) College 12. Thammasat University 13. Tsinghua University - School of Economics and Management 14. University of Texas at Austin 15. University of Washington Business School 16. University of Western Ontario - Richard Ivey School of Business Members of the winning team and their advisor (from right: 2nd to 6th) with (from left) Prof. Kar Yan Tam, Wallace Tse and Chi Kin Pak from Circle K, Prof. Steve Nason, Ronnie Chan, Dean Chan, Catherine Weir and (far right) Prof. Steve DeKrey.

6 International EMBA Mainland Executives Gain the Edge Before It's been said that if you want a job done, give it to a busy person. And so it is with the International EMBA program, a demanding course of study for experienced senior executives who, at the end, will be equipped with the fresh approaches and knowledge that can give their companies a competitive edge. The iEMBA program has been developed with China's growing economic power in mind, especially after its accession to the WTO, and is targeted at senior Chinese executives. The first intake arrived in 2002 and participants report that the course has succeeded in helping them to be more competitive. "The iEMBA program has inspired me to see that innovation in management and operating systems and corporate culture is the best way to compete. The market is changing so companies have to find ways to give themselves competitive advantages," Qi Gong Qi, Vice General Manager, China Netcom Group Beijing Communication Corporation said. The 15-month program is taught by a world-class faculty team whose members have experience teaching similar programs in the United States and elsewhere. The emphasis is on helping business leaders to build on their understanding of the China market and to develop an international perspective. Participants receive a grounding in management, problem solving, finance, markets and other core subjects. They also choose from a group of electives that focus on global business issues and the Mainland business environment. They must complete three residential modules - all while holding down full-time, senior positions in their firms. Learning to work in a team is a necessary part of the course - an experience that many participants are not used to. "This program has helped me to learn how to position myself among a group of high-quality people, and how to make my choices in my lifestyle and life concepts," Tony Hau, Chairman & Co-chief Executive Officer, China Motion Telecom International said. The quality of students is maintained through a rigorous entry selection. Applicants must possess a bachelor degree or equivalent, have at least 10 years working experience, hold a senior position in their organization, and be sponsored and supported by their organization. Once students are admitted, they have to get used to not only being back at school, but also to a more informal, Western style of teaching. About 80 per cent of students came from the Mainland in the first intake and 20 per cent from Hong Kong. "It's an enjoyable experience to work with professors from HKUST who are all very resourceful and up to date with the external world. They all have different attractive ways of lecturing and I felt that they are also keen to learn from us," Patrick Tong, Managing Director, SKF China Ltd said. According to the Dean K.C. Chan, global competitiveness is the goal at the end of the day. "Our International Executive MBA program is designed to allow business leaders to take their careers and organizations to new levels, to make a quantum leap in their thinking and in their results as they face increasing competition from overseas and increasing opportunities in the international market," he said. Before After Peter Wong, Director of Standard Chartered Bank addresses graduates of the inaugural iEMBA class. 7 HKUST Business School Newsletter Issue 20 EMBA Party Time for EMBA The Kellogg-HKUST EMBA program celebrated its fifth anniversary with a bang-up party for more than 200 graduates and staff. Music, dancing, costumes and lucky draws were featured at the September party, which was kicked off by the Dean of the Kellogg School of Management, Dipak Jain, the Dean of the HKUST Business School, K.C. Chan, and the Associate Dean and Director of the EMBA program at HKUST, Steve DeKrey. An extra reason to celebrate was that the party was going ahead after being postponed due to SARS. Dean Jain, Dean Chan and Professor DeKrey thanked everyone for their continuous support during that period. The Kellogg-HKUST EMBA program is the leader in the region and took its first intake in 1998, to fill a need for executive business education with an Asian focus. The program is demanding, with executives completing their studies while carrying out full-time jobs of responsibilities. More than 200 executives have graduated, commuting between offices as far away as the United States, Europe and Australia. The mix of students is as international as their office locations, with 26 per cent being American, 16 per cent European, 10 per cent Canadian, four per cent Australian and 12 per cent from other Asian countries. The remaining 32 per cent are Chinese. Charles Ng of KH03, said the program had been fulfilling both academically and in terms of the contacts he made with other students. Ng is currently president of the Kellogg Club in Hong Kong. "[It] has been a great life changing experience for me. I have been able to acquire a truly exciting learning experience from my classmates (many of them experts in their own fields) and from some of the best professors. I am now able to build a very special network of friends from around the world," he said. 8 EMBA Praise from the Top for EMBA Success For Chief Executive Tung Chee Hwa, Hong Kong's future success is closely tied to its status as a world city. So when the School's Executive MBA (EMBA) program won a top ten place in the Financial Times' latest global rankings, it was time for a celebration at Government House. This was the first occasion the five-year-old program, run in partnership with the Kellogg School of Management at Northwestern University in the United States, has been eligible for consideration in the prestigious, annual survey. A debut at No 9 out of 75 schools led to warm praise from Tung at an evening reception hosted by HKUST and attended by University representatives and leaders of the Hong Kong community. As the champagne glasses clinked, the Chief Executive spoke repeatedly of his pride in the School's achievement, holding it up as an example for Hong Kong to follow as it strives to become a center of excellence for education in Asia and the world. HKUST President Professor Paul Ching-Wu Chu had earlier pointed to the program's strengths, saying they epitomized the University's mission to provide the best possible education. The Financial Times singled out HKUST as the highest ranked new school in its survey, the third it has conducted into EMBAs worldwide. The Hong Kong program rubbed shoulders in the top ten with Kellogg's US-based EMBA, six other US programs and one each from Britain and Spain. The London-based newspaper also publishes annual global rankings for executive education and full-time MBAs, with HKUST already topping the list for Asia-Pacific. In dissecting EMBA programs, the Financial Times looked at quality of alumni, school and program quality and research capabilities. Evaluators studied salaries, career advancement, work experience, seniority and asked for feedback on the program when judging alumni. School quality was measured by the diversity of the faculty, students and advisors, the global nature of the program and the number of PhDs in the faculty. Scholarly output in top academic journals was the determining factor in research rankings. When it came to individual categories, the Kellogg- HKUST EMBA program, as it is known, came top globally for the international diversity of its students, second for its international faculty and ninth in research. Its partnership program, which caters for senior and experienced executives, also played a key role. Based in Hong Kong, the Kellogg-HKUST EMBA lasts for 16 months with 28 courses offered over two weekends a month. Half are taught by the Kellogg faculty and half by HKUST's. Participants attend two residential sessions, one of which is based at the Kellogg campus in Chicago. Intake has increased from 35 students in 1998, the year of its launch, to 50 in 2003, with 24% coming from outside Hong Kong. Average work experience is 14 years. Chief Executive Tung Chee Hwa The sixth class of the Kellogg-HKUST EMBA Program celebrates the impressive ranking of world's No.9 with (front row from the left) Judy Au, Assistant Director of the program, Prof. Steve DeKrey, Dean K.C. Chan and Prof. David Li.

9 HKUST Business School Newsletter Issue 20 At Government House, Tung tied HKUST's achievement with his own vision of Hong Kong's future. "With what you have achieved, we know we will make Hong Kong the center of excellence of education in this part of the world and hopefully one day for the whole world. We know we are positioning ourselves right as Asia's premium business center and we know we will be Asia's world city," he said. "In such a short time, you have achieved what many of us thought would be very difficult. But you have done it. We are proud of you." In his welcoming remarks, President Chu explained why 270 senior executives from around the world had taken part in the Kellogg-HKUST EMBA program since it was founded. "They opted to study in Hong Kong because they are discerning professionals who recognize worldclass standards," he told his guests. "Our EMBA is designed to build on Hong Kong's global standards to meet the demanding requirements of business leaders everywhere. It is therefore a meticulously conceived and perfectly delivered program, taught by some of the world's leading faculty in their fields, from both Kellogg and HKUST." President Chu pointed to the cross-boundary strengths of the faculty. These were also reflected in the student body, which the Financial Times rated as the most internationally diverse in the world in the EMBA field. "These strengths epitomize HKUST's mission to provide the best possible education to all our students. And I am happy to say that, like Hong Kong in general, we appear to be on the right track," he said. President Chu had particular words of thanks for Professor Yuk-Shee Chan, the founding business dean and now HKUST Vice-President for Academic Affairs, Professor K.C. Chan, current Business Dean, and Professor Steve DeKrey, Program Director. Tung, however, ended the evening with a challenge. "We thank you for your effort," he said. "But don't stop here because we are only the ninth best in the world and we expect you to do better." President Paul Chu Toasting the success of the Kellogg-HKUST EMBA Program at Government House are, from the left, Dean K.C. Chan, President Paul Chu, Fanny Law, Permanent Secretary

for Education and Manpower, Tung Chee Hwa, John Chan, HKUST Council Chairman, Prof. Yuk-Shee Chan, Vice-President for Academic Affairs and Prof. Steve DeKrey.

10 EMBA Promote Tolerance, Says Anson Chan EMBA graduates were urged to develop an appreciation of other cultures and help the world become more tolerant and compassionate, in a speech by the former chief secretary, the Honorable Mrs Anson Chan. Chan, who was speaking to an audience of 53 graduates from the Kellogg-HKUST EMBA program and their guests, noted that the program provided executives with a unique opportunity to mix with people from different cultures, social backgrounds and professional disciplines. She hoped graduates had acquired a better understanding of their place in the world, which she said was "divided by extremes of wealth and poverty, by nationalism, religious intolerance and man's inhumanity to man. "If we are to see a more humane and more compassionate world, a world in which more people can see and share in the fruits of their toil, we must open our minds to the rest of the world. We must strive to understand and appreciate different cultures and attitudes. We need to build bridges between different nations so that there can be a stronger foundation for lasting peace and mutual trust and respect," she said. Chan hoped graduates would be committed to the values of honesty, fairness, equality, freedom and service to others - essential qualities of leadership in the modern world. Anson Chan, second from right, sits with Prof. Yuk-Shee Chan, Vice-President for

Academic Affairs, Prof. Gary Biddle (2nd left) and Prof. Suren Mansinghka (1st left)

during the 5th graduation of the program. 1999 - Ronnie Chan, Chairman of Hang Lung Group. 2002 - Fanny Law, Permanent Secretary for Education and Manpower. 2000 - Lawrence Wong, Chief Executive of Hong Kong Jockey Club. 2001 - Paul Chow, Chief Executive of the Hong Kong Exchanges and Clearing. The Kellogg-HKUST EMBA Program invites business and community leaders as graduation speakers. Above from top right shows previous speakers from 1999. 11 HKUST Business School Research Newsletter Issue 20 DOING THEIR LEVEL BEST When analysts and investors set about pinpointing the value of a firm with multiple business components, not only do they need to find out as much as they can about its overall operations, it is important to be able to delve into the workings of its individual segments as well. Different cash flows, disparate risks and varying investment opportunities at segment level all play their part. So much so, in fact, that standard setters and regulators worldwide have made considerable efforts to expand disclosure requirements in this area and enforce the rules governing them. Sony Corporation, for instance, was taken to task by the Securities and Exchange Commission (SEC) in 1998 for failing to report Sony Pictures as a separate industry segment, obscuring its losses by combining its results with Sony's profitable music business as a single "entertainment" sector. That manoeuvre costed the Japanese giant a US$1 million penalty. Despite the importance of segment data to users and regulators, there has been little academic research examining its impact on company valuations. Peter Chen and Guochang Zhang of Hong Kong University of Science and Technology have helped fill the gap by developing and testing a raft of theoretical predictions about how the value of a firm's equity can be more accurately worked out through adding accounting information from individual segments to overall data. "When a firm's segments operate in industries and markets that have different growth opportunities, equity value depends not only on the divergence of profitability, but also on the distribution of growth opportunities across segments," they write. If growth is possible in profitable segments, the company's value goes up. But if it is restricted to the less profitable areas, overall worth goes down, they say, adding: "Our study suggests that when valuing multiple-segment firms, firm-level data need to be supplemented by information that reflects differences in segment profitability and growth opportunities." These lead to investment decisions being made for individual segments, information which, in turn, is of importance to analysts and investors. They in particular demand facts and figures that give them the ability to predict management actions that affect future cash flows. Often, this can be found at segment level. It is also useful if outsiders can see what's going on in the same way as management and so be able to gauge how decisions are taken. "Our study suggests that it is beneficial to organize external reporting of segment data in a way consistent with the internal use of such data by managers," Chen and Zhang write. Their conclusion is in line with Statement of Financial Accounting Standards No 131 and the SEC's requirement to organize Management Discussion and Analysis so that it portrays the firm "through the eyes of management". "From external users' perspectives, valuation can be facilitated if firms disclose both the scopes and activities that managerial decisions cover and the types of information used in making decisions," they say. Chen and Zhang got their study under way by accessing segment data from Compustat's industry-segment file for 1986-97, firm-level data from the same company's annual data file and stock prices from the Center for Research in Security Prices. They then ran it through a complex series of analytical tests before coming up with a series of conclusions. The researchers broke down equity value into the part explained by accounting data spread across the whole firm and the component attributable to differences in profitability across the company's segments. First, they say, it must be borne in mind that "different segments of a firm generally face different investment opportunities and that an important role of segment accounting data is to guide segment-level investment decisions." Profitability and growth opportunities at that level are key to what happens when those decisions are taken. "Our study is useful to users of financial statements," they write. "It shows how value-relevant information can be extracted from raw segment accounting data and integrated in valuation, along with firmlevel information, and points to circumstances where segment data matter most." This kind of information has a material impact on how much a company is thought to be worth. "Thus, ignoring or misusing such data can cause considerable valuation errors." The academics end by asking regulators and standard setters a question, bearing in mind the current low "explanatory power" of segment information: "What measures can they take to reduce the measurement error in segment data?" From: "Heterogeneous investment opportunities in multiple-segment firms and the incremental value relevance of segment accounting data", by Peter Chen, Assistant Professor, and Guochang Zhang, Associate Professor, both of the Accounting Department of HKUST. The paper was published in The Accounting Review, vol. 78, No.2, 2003. Peter Chen Guochang Zhang

12 Students & Alumni Support and Guidance Lead to a Top Job It may come as a blow to her professors, but Nazeesh Ameen's specific studies at the Business School seem to have had little influence in helping her secure a job in the highly competitive field of investment banking. It was her all-round experience at the School that helped instead. Ameen graduated in May with a BBA double major in marketing and management of organizations and a minor in economics and political development. Now she works in London for HSBC's Corporate, Investment Banking and Markets arm, alongside trainees from diverse backgrounds and experiences, who range from fresh graduates to hardened executives. In the entire investment banking field, only one or two Hong Kong graduates are hired each year. "The actual subjects I studied for my degree have not really helped me in securing this job. I will say, however, that the grooming, the support and the guidance I received throughout my studies at HKUST have definitely contributed to making me who I am and enabled me to reach where I have reached."

Ameen was born in Pakistan and moved to Hong Kong at the age of three with her father's job. She had stayed here ever since, attending English Schools Foundation schools, until she was appointed to the London position. She chose to attend HKUST because she was impressed with the business program, especially the opportunities to develop beyond the classroom. Her most memorable experience was spending a semester on exchange at the Wharton Business School, University of Pennsylvania. "It was a wonderful experience, both for personal growth and of course for the academic experience," she said. "I will also not forget the guidance and support I have received from my professors - the interest they showed in my studies and my ambitions and the happiness they expressed in my successes." Nazeesh Ameen (4th from left) on a day out at the Wharton School.

Trailwalker Teams Walk Tall Six teams representing the HKUST MBA Alumni Association took some tough terrain in their stride when tackling Trailwalker 2003, beating their charity target and putting in some impressive times to boot. The 24 walkers were among the 4,000 entrants and 950 teams who tackled the arduous 100-kilometer MacLehose Trail to raise funds for Oxfam Hong Kong's development and poverty alleviation programs. Altogether the MBAAA teams topped their target of HK$180,000 and surpassed last year's total of $156,000. This year's Trailwalker, the 22nd, attracted teams from all over the world. Young Achievers Turn a Page A non-credit course that places students under the wings of MBA students has attracted 50 undergraduates, eager to learn the secrets of the onepage business plan. The students are taking the course in the run-up to the first Hong Kong Junior Achievement Business Plan Competition, which is supported by Goldman Sachs Foundation. The company favours the One Page Business Plan method developed by Jim Horan. Prof. Steve DeKrey of the Business School is teaching interested undergraduates how to produce one for the competition. Twenty volunteer MBA students are also acting as mentors. The competitors will submit their business plans to a panel of judges who will select 10 for the final round where they will have to make presentations. The first, second and third winners will receive US$1,500, US$1,000 and US$500, respectively, to further develop their ideas. Prof. DeKrey is a member of the Junior Achievement board here and he volunteered the Business School to be the pilot for the Business Plan Competition, which is held annually in the United States and elsewhere. "One of the reasons for doing this is the value to both the undergraduates and MBA students. I have been very impressed with the level of commitment of all the students involved, especially since it's a non-credit course," he said.

13 HKUST Business School Newsletter Issue 20 Luncheon Meet A lunchtime break from studies is giving MBA students and staff the chance to mingle and show off their presentation skills. First year MBA student William Chiu started the lunches in early October to create an opportunity for people attached to the MBA program to meet informally on a regular basis and get to know each other better. "I think this is a great way to build a sense of togetherness and take advantage of the diversity of the class to maximize our learning experience from each other," he said. The focus of the first five luncheons has been on student presentations of their home countries. Lively sessions have been held on Hong Kong, Germany, Canada, India and Mainland China by student volunteers. Future themes will cover subjects that are not necessarily relevant to coursework, but are still part of the MBA experience, such as exchange programs, social etiquette, emerging business trends and opportunities, and world cuisines, Chiu said. "Most classmates consider the luncheon a good opportunity to learn about the background of their fellow students as well as their professors. For example, some students discovered that our accounting professor was a passionate hiker and a one-day hike was quickly organized, to be led by the professor," he said. The setting of the luncheons also helps to set a positive mood. Weather permitting, they are held either on the balcony outside the MBA office or in the cosy MBA lounge.

Cultural Diversity Benefits All Florian Pihs had never stepped foot in Asia before he joined the full-time MBA program at the Business School. But he knew it would matter to his future. The dynamism of the Asian economies, especially China, and the differences between Asian and Western cultures made it a good time to come here and learn more, the German native said. "Understanding the Asian culture and its business practices will become even more important as the Asian economies increase their share of the world market. For me, as a European, it will give me a unique competitive advantage over my peers at home," he said. The chance to learn more about business in China also attracted Canadian Dean Missikowski, who has been working between Hong Kong and Hawaii for the past four years. "One of the great benefits of our class is its diversity, with over 50 per cent of students coming from the mainland. For international students this is a golden opportunity to build our network and learn as much as we can from our classmates and new friends," he said. The share of mainland students has increased substantially over the past two years and the number of non-Asian students is also increasing, according to Prof. Steve DeKrey, Director of the MBA program. The presence of so many students who shuttle between Hong Kong and the mainland on business helped keep students and staff up-to-date with recent developments there, he said. Georges Richard from France chose HKUST on the advice of the Essec Business School in Paris, where he obtained a BBA. "My main motivation is to enhance my knowledge and to know more about Asia, specifically Asian business," he said. 14 Global Business Program Lessons In Soft Skills for Top Students The criteria to get in are tougher than law school or medical school. But that is part of the attraction for applicants to the Global Business program, one of the most demanding undergraduate courses in Hong Kong with entry requirements the most stringent of all the 200 or so programs listed in the Joint University Programs Admission System. The chance to work with top students and gain a global outlook was a lure for second year student, Adam So, who has an impressive list of accomplishments himself. He scored 6As in the HKCEE exams, has the highest rank of Eagle in Scouts, is captain of the HKUST English debating team and a member of the soccer team, has achieved Grade 8 in piano and was president of his secondary school's student union. "My classmates [at HKUST] are outstanding and this has motivated me to do even better," So said. "The small class size is also great and many of my classmates have become my close friends." The networking aspect of the Global Business program, which began in 2001, is one of the "soft skills" that its creators are aiming to foster. Students in the program are given a broad- based education with a global perspective and take a second major to provide training in a specific discipline - meaning they graduate with a double major. During the first year, they follow a curriculum similar to other undergraduate business students and take one or two courses tailor-made for their program, such as Global Business Case Studies and Leadership and Entrepreneurship. But in the second year, they spend the second semester on an overseas exchange, followed by a summer internship with a company such as Goldman Sachs, Citigroup or Morgan Stanley, experiences which play a major role in shaping the future graduates. Professor Kar Yan Tam, who is in charge of the program, said this helped students develop critical thinking, communication and leadership skills, problem solving techniques and other soft skills. These were also fostered through the School's many enrichment programs, such as mentoring and case competitions, which students in the Global Business program were strongly encouraged to join. "You can really see the difference before and after the exchange and internship. Before, my impression is that the students are still green. After, they are more mature and more independent. They have built up confidence in talking to people and speaking in public," he said. Sarah Tam, a third-year student, has experienced the benefits. She completed her exchange this year at the University of Pennsylvania - one of a number of exchange partners in the United States, Canada and Sarah Tam (center) and other students from HKUST pose at the University of Pennsylvania. The Global Business program provides all-round training for students. Pictured on the left

is a group of students participating in an outdoor team-building training exercise. On the

right is Adam So, a Global Business student, at the recent Junior Achievement Business

Plan Competition. So impressed the judges and emerged as the winner for his business

proposal to introduce scooters to the Mainland Chinese market. 15 HKUST Business School Newsletter Issue 20 Europe. The combination of her HKUST and exchange experiences have helped her develop many skills. "I have improved significantly in terms of leadership, communication and time management. Most importantly, I think the program has really provided me with a global perspective, which will be needed in the everchanging world of business," she said. Tam had her sights firmly fixed on a career with multinational companies when she chose HKUST. She also has the strong English language skills to make it work - an essential requirement for operating in a global environment. A significant number of Global Business students come from international schools in Hong Kong or have attended secondary school overseas, giving them a good grounding in English. Prof. Tam said about 20-30 per cent of students came from this background, against less than two per cent in other programs. The program has also attracted its first overseas student, a source that could potentially increase along with students from Chinese Mainland, Prof. Tam said. Britt Soendergaard is from Denmark, where she studied in international schools. She had never been to Asia before enrolling in the program in September. Like other international students at HKUST, she relishes the chance to learn more about doing business here, as well as gain a quality education. Soendergaard was attracted to the Global Business program by the fact students have to choose a second major in their second year, giving them time to consider what option is best for them. She also liked the broad nature of the program, which gives students exposure to the various fields of expertise in the Business School. "This is a very competitive program, which pushes students to do their best and makes them strive to be the best they can be. This also prepares them for real life, since business is a very competitive field," she said. One real-life skill Soendergaard and other first years are developing is time management. The regular courses and enrichment activities, plus enjoyment of campus life, mean students must be able to juggle many competing demands on their time if they are to complete their studies successfully. The biggest push comes in the third and final year, when they must produce both a team project and a thesis. "The requirements are quite demanding. The thesis is unique to this program - students in other undergraduate programs in the School don't have to do this," Prof. Tam said. The first batch of 28 students will complete their studies in the spring and Prof. Tam said many had distinguished themselves by being on the Dean's List. A number were also working part-time with the companies they interned with, giving them an extra edge of experience. The intake of students has been kept small in part because this is a pilot program. Eventually, it is hoped to offer some of these opportunities to all students at the Business School if the resources come available, he said. First year student Omesh Ashok believes the Global Business program gives each student a chance to shine in different ways, and thus enhances their overall development. "I think personal development is a major part of university life and this program helps us in that aspect by exposing us to multiple facets of the business world," he said. "The beauty of the program is that with the various courses and enrichment programs we get to participate in, no two students will have a similar experience. Nothing is predictable when we each get different mentors, go on exchange to different parts of the world, or get internships in different industries. I am sure during the course of these three years, we will have more and more to learn from each other," he added. Omesh Ashok Britt Soendergaard tackles the challenge during the orientation camp. 16 People Promotions and Appointments Stephen Nason, Visiting Scholar of Management, has been appointed Associate Director, Undergraduate Programs from September 2003 through June 2004. He joined the school in 1995 after being awarded his PhD in management and organization by the University of Southern California where he taught the same subject. Nason's research interests include international management and culture, international human resources management, organizational learning and organizational culture. Albert Ha continues as Deputy Head of the Department of Information and Systems Management. His reappointment will last until the end of June 2004. Ha taught at Yale's School of Management from 1992 to 2001 before joining HKUST. The winner of the summer/fall 2002 Franklin Prize for Teaching Excellence, he took his PhD at Stanford University. His research interests are coordination of product and process development, stochastic models for production and inventory control, incentive and operations, and supply chain management. Thomas Wong joins HKUST as Adjunct Associate Professor of Accounting and Director of China Program Development on a two-year appointment. Wong, who has served as Chief Executive of both the Hong Kong Financial Services Institute and the Hong Kong Securities Institute, was also the Hong Kong Society of Accountants' Director of Education and Training from 1995 to 1998. Before joining HKUST, he served as Executive Director for Upbest Group Ltd, Principal Consultant at ET Business College, Adjunct Professor at Hong Kong Polytechnic University, Visiting Professor at Nanjing University of Finance and Economics and Principal Consultant at Beijing International Finance Training Center. Milind Rao, a Visiting Scholar at HKUST from 2001 to 2002, becomes Visiting Associate Professor of Economics. The holder of a PhD from Columbia University, Rao spent ten years teaching at Colgate University before becoming an Associate Professor at Columbia. His research interests include international macro - economics, emerging markets finance, monetary economics and financial economics. Prescott Beighley has been appointed Visiting Scholar and Adjunct Professor of Finance. A holder of a PhD in economics from Purdue University in West Lafayette, Indiana, Beighley has considerable Asia-Pacific experience. He joins HKUST from the University of Macau where he was Invited Associate Professor of Finance, Faculty of Business. Previously he taught at the Asian University of Science and Technology and the University of Otago, New Zealand. He has also worked with the Korean Banking Institute in Seoul. His research interests include international finance, financial risk management and investments. Byung-Joon Yoo, who was awarded his PhD in information systems by Carnegie Mellon University this year , joins the Department of Information and Systems Management as an Assistant Professor. A former employee of KPMG Co in South Korea and an accounting information system analyst with the Korean army, he took his first degree at Seoul National University before continuing his studies at the University of Arizona. His research interests are electronic commerce, IS strategy, technology and innovation. Jeevan Jaisingh also joins ISMT as Assistant Professor. He too was awarded a PhD this year, from Purdue University, to add to an earlier degree in electronics and communication engineering from the University of Roorkee in India. Jaisingh first worked as a systems analyst with Tata Consultancy Services before furthering his studies in the United States. His research interests include electronic commerce, economics of information, information privacy and business models in electronic commerce. Bilian Ni Sullivan has been appointed Assistant Professor in the Department of Management of Organizations this year after securing her PhD from the Graduate School of Business at Stanford University. Sullivan, who also holds degrees from the University of Illinois at Chicago and Peking University, China, has research interests in organizational learning and change, organizational and inter-organizational networks, population learning, international management and decision making. Riki Takeucho, another newly-appointed Assistant Professor in the Department of Management of Organizations, is also a new PhD holder, with his degree being awarded by the University of Maryland. Takeucho studied at North Carolina State University before spending three years as a securities analyst with Nippon Securities Ltd, followed by further study at Purdue University. His research interests include inter-organizational behavior, human resource management, strategic human resource management and social exchange perspectives. Mei Kwong, who took up her role as Senior Advisor, MBA Career Services, has spent much of her own career in marketing, backed up by five years in executive search. She began gaining her experience in advertising and brand management with two Chicago-based companies, Leo Burnett and Kraft Foods, returning to Hong Kong to help her family company's expansion into China. After her father's retirement and the company's sale, she joined A.T. Kearney management consultants, setting up an executive search business in Hong Kong, before moving on to a well-established group of book-sellers as Group Business Development Director. Kwong is a graduate of the Stanford Graduate School of Business (Palo Alto, California).