Establishing corporate universities has become a strategic trend among Chinese and multinational corporations, enabling them to provide sites of continuous training for employees, and ways to nurture senior management.

Aokang Group, one of China's biggest leather shoe makers, is the latest Chinese company to jump on the bandwagon, establishing Aokang University in January.  The group's president Wang Zhentao says that the company plans to recruit its workforce from the shoe making industry to begin studies in 2008.

The corporate university is not new in China: Haier University, Mengniu Business School, Chunlan University, Kingdee University and New Hope Business School were all established by companies.  In 2006, Gome Electrical Appliance, Ping An Insurance, and Beijing Wangfujiang Group all announced plans to open their own corporate universities.

70% of Fortune 500 companies have established corporate universities or business schools, and many Chinese companies are following suit, in order to train up human resources and thus secure a continuous workforce.
 
"Compared with Fortune 500 corporate universities, those on the mainland are still behind in terms of size and quality.  However, local Chinese companies have acheived some breakthroughs in terms of internal and technical training, and in their conscious efforts to turn the corporate university into a strategic platform.  Initially, corporate universities were no more than training centers; however, by expanding their operational size and scale, corporate universities can be transformed into strategic tools to consolidate resources and promote corporate development," says corporate university management consultant Li Tiantian.

“Corporate Universities should be able to adjust accordingly to the demands of clients, suppliers and business partners, to provide comprehensive solutions and consolidate relations.  Client loyalty would thus be enhanced, and marketing and sales can be executed on a deeper level.  At the same time, corporate universities can offer necessary support for companies' future strategic development, said Motorola human resources management and Motorola University human resources director Liu Hui.

Motorola was the first multinational firm to open a corporate univerity in China, establishing its Motorola China University in 1993.  Seimens Management Institute and Ericsson China R&D Institute followed shortly thereafter.  Intiated by multinational corporations, these corporate universities, alongside HP Business School and McDonald's University, are among the most advanced and top-quality corporate universities on the mainland.

By 2003, local corporate universities entered the second phase of their development, inviting famous local and foreign scholars to teach classes, and professional training programs could be purchased at a high price.  At the same time, industry analysts generally agreed that training is the best benefit an employer can offer its employees.

Li also points out that corporate universities are significant investments that can realize stable and excellent operational performance.  “Take Mengniu’s case for example.  Its rapid growth in  past years has actually ushered in many operational problems. While Mengniu’s annual sales volume did not even reach 37.3 million Yuan (US$4.66 million) in 1999, it reached 4.0715 billion Yuan (US$508.938 million) in 2003. Human resources, particularly management, became scarce at that time. Therefore, Mengniu recruited a large number of blue collar workers and offered them intensive training to turn them into qualified industry labor. The company also needed to tackle how to ensure that growing mid-range management would be able to better understand and assimilate corporate culture and concepts."  Technical training itself is not the way to acheive these goals and build a successful, professional management team, Li says. "Corporate universities, on the other hand, offer support and services in this regard by allowing companies to build up their own corporate training and research and development structure. Mengniu Business School has helped establish a long-term foundation.”

Motorola University China promotes corporate reforms.  By offering technical and management training to employees on all levels, the university supports Motorola China's management placement.  It consistently employed the company's exclusive Six Sigma Black Belt project, which aims at training a professional technical team for clients, suppliers, and business partners that is capable of promoting and applying methodologies
that can improve system applications.  Through this program, system quality is improved, and the research and development cycle for a new product is minimized.

"After employing the Six Sigma management methodology, Lenovo has created US$42 million in profit.  Additionally, Motorola's suppliers, as well as ZTE Communications, Brilliance Auto and Yantian Interantional Container Terminals have also acheived good results," says Asia-Pacific manager of Motorola's advanced technical center at the R and D department, Liu Jianyong.

As a mainland initiative, Haier University tries to serve as a corporate foundation by providing a quality environment, optimized planning, and an incentive structure.  It has inked cooperation agreements with famous local and overseas institutions, including Peking University, Tsinghua university, IMD, and China Europe International Business School.  The university offers training on all levels, from senior executives to blue collar factory workers.