Open Forum

New Delhi, 25 January 2011

Management Schools

CURTAIL OVERCROWDING

By P K Vasudeva

With globalisation taking root and inter-connectivity of the global economy asserting itself, the demand for management education is experiencing exponential growth. Nowhere is the craze more conspicuous than in India.

The number of MBA graduates churned out by about 2,000 Government-approved B-Schools in the country is around 200,000 annually. China has some 200 B-Schools and an annual turnover of 40,000 graduates, while the corresponding figures for the US are around 900 B-Schools turning out 150,000 MBA students.

According to a recent comparative analysis of figures, India has 100 management school seats per billion dollars of GDP, as against six in China, 11 in the US, and 13 in the UK. The All India Council for Technical Education (AICTE) and the University Grants Commission (UGC) are flooded with applications from 200 new institutions every year for accreditation of their MBA courses.

With the numbers registering a steep rise, exceeding 20% every year, it is becoming difficult to separate the chaff from the grain. As B-Schools are sprouting everywhere, there is hardly a university or college which does not have a department of business management.

In view of the hypnotic spell cast by management degrees and diplomas, unscrupulous operators have made a lucrative business of it, running outfits which have no infrastructure, qualified faculty or certification by the AICTE or the UGC. But they are still flourishing as dishonest business shops because of lack of awareness, no competition and easy accessibility for rural students.

Undoubtedly, management education has become a sort of El Dorado, with aspirants willing to pay whatever is asked for, in the hope of making this up later via placements and salaries they hope to command. The result is that fees are sky-rocketing with no regulating authority going into whether they are commensurate with the quality of education, teaching and the student’s employability. The AICET has to be very strict in allowing such poor quality institutions to stop mushrooming.

A more disturbing aspect is that most of the so-called B-Schools are content to be clones of each other, offering identical courses in identical nomenclature and parroting identical jargon, in unabashed imitation of Western B-Schools, especially the US ones.

They take pride in flaunting their tie-ups with B-Schools abroad, importing a large number of their faculty members and case studies at a huge cost. Most of the case studies generated abroad make no attempt to draw on lessons provided by the phenomenal achievements of Indian private and public sector institutions and civil society.

Besides, private sector luminaries, Western scholars and some like-minded Indian academics dominate their Governing Bodies. There is no display of Indian geniuses in the premises of any of the B-Schools whose profound insights could vastly enrich the quality of management education, and make it relevant to the country’s cultural and social contexts.

After all, these can only be of minimal help in finding Indian solutions for Indian problems viewed through Indian eyes. In our country, the glittering complexion of the Governing Board of a premier B-School could not stop a founder-member from getting involved in a shocking criminal case; nor did the expertise of its Dean in Western modes of running a business stop the company of which he was a Board Member and Chairman of the Audit Committee from inflicting a Rs 7,500 crore fraud on the nation.

This is not all. Foreign B-Schools and exotic gurus might enjoy a certain brand image, and even have certain intellectual and research credentials, but they are basically frogs-in-the-wells, familiar only with political, economic, cultural and social milieus of their own countries, with limited understanding of the bewilderingly complex and diverse Indian setting.

The curriculum in B-schools continues to be silo-like, functionally focused. Not surprisingly, the mantra that has echoed in B-schools halls has been “integrative thinking.” Although vital, tomorrow's B-schools will fail in their mission if they focus on facilitating integrative learning of business functions only. True, these functions are critical, but they might not be sufficient for successful business leadership.

In addition, to help produce transformative leaders, B-schools should provide students access to non-traditional knowledge areas. For example, the training one needs to run a successful financial institution goes beyond the knowledge of business functions and entails an understanding of public policy, law, and politics. The importance of New Delhi to Dalal Street or Washington to Wall Street is more critical than we think, the distance between them shorter than one would imagine if one is trying to succeed in business.

We can expect tomorrow's MBA aspirants to seek B-schools that offer flexible curriculums to help them succeed in diverse industries, and enable them to navigate through different cultures and processes seen in public institutions, private-public partnerships (PPP), multi-national corporations and entrepreneurial ventures. Students would expect variety in curriculums that could range from subjects such as the environment, energy, and public policy to healthcare and design.

Equally important, there is an imperative need to integrate these topics within traditional business courses. For example, students working on assignments should not simply measure the impact of a business decision on say, market share, but analyze its short-term and long-term impact on say, the environment.

Further, tomorrow's curriculums in B-schools would have to break free of the legacy of Western business education and focus on the unique needs of the vast growth markets of tomorrow. For instance, they must include a focus on enabling innovations in emerging markets and methods to tackle its associated challenges.

Also, new methods of marketing research for the “bottom-of-the-pyramid” require creative approaches to survey and measure key issues such as customer needs, preference and choice. Jack Welch, the famed former CEO of General Electric, once said that MBA schools had become glorified placement agencies, rather than the place where great business leaders are born.

Although the remark might have been tongue-in-cheek, Welch underscored the misplaced attention given by students and many B-schools to placement statistics of graduating students. The students who forego traditional placement for entrepreneurial activities are valued as much and may be, even more, than those choosing traditional placement.

Thus, social entrepreneurs who have the potential to make an impact on society and the economy should be celebrated as much as those who get the immediate rewards of a high-paying consulting job. Add to this the notion, “it's a marathon, not a sprint” with regard to post-MBA success should become an important priority for B-schools.

They should provide resources to help guide such a “marathoner,” in the form of stipends and incubation facilities that reward, a far-thinking social entrepreneur. So that “life-long” learning is not a hollow promise, but a real differentiator between excellent and mediocre B-schools.

Today, management education is at a crossroads. There are unique opportunities emerging from the changes, challenges, and expectations shaped by technology, market needs, the public's perception of business, and discerning MBA aspirants. Clearly, the B-schools that excel tomorrow would be those that grab opportunities by modifying existing curricula to address the public's expanded expectations of business leaders and cater to new priorities in emerging markets. They would be true catalysts of change in the personal growth of budding business leaders, and through them, in the growth of corporations and communities of tomorrow. ---- INFA

(Copyright, India News and Feature Alliance)