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BW Businessworld

The Problem Starts At The Very Top

The century old American AACSB International — the world leaders in providing accreditation to management programs — produced a report “Management education at risk” more than a decade ago based on its assessment of the state-of-the-art international business education. They could have easily said this specifically about India where management education is truly in peril, thanks to the inability of the system to defend it against the increasingly stifling regulatory control that affects intake, fee, faculty recruitment and institution building.

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The century old American AACSB International — the world leaders in providing accreditation to management programs — produced a report “Management education at risk” more than a decade ago based on its assessment of the state-of-the-art international business education. They could have easily said this specifically about India where management education is truly in peril, thanks to the inability of the system to defend it against the increasingly stifling regulatory control that affects intake, fee, faculty recruitment and institution building.

The system itself is woefully fragmented in terms of its leadership, thanks to the inherent structural weaknesses and a heterogeneous-ownership model. The government accounts for the lion’s share of high-quality business school graduates from the Indian Institutes of Management (IIMs) and the Faculty of Management Studies (FMS) — some of the best run universities — which are cross subsidised for setting up and input costs by the government — both central and state. The share of private investment in business education is large and growing, but quality is a critical issue that has pulled down private business schools in the premium placements arena. While mass market recruitments do happen primarily among the private sector players, when it comes to premium jobs, the prize goes to the government-run IIMs and FMSs. The private players are also stymied by a disturbing trend of an increasing number of these being eased out of the system in the recent years owing to poor capacity utilisation and lack of basic facilities, thus perpetuating the skewed business education model that has evolved favouring the government sector with its own long-term scaling up costs and other growth limitations.

It is not surprising therefore, that unlike in the western B-schools, all the top-order trend shift being witnessed in management education — such as the advent of executive education, entrepreneurship education , inter-disciplinary learning, education models integrating hands on experiential learning with industry as part of the academic calendar, emphasis on corporate governance, ethics and accountability teaching as part of the curriculum, pedagogic innovations — are driven not by private players but public institutions in India. The PGPX one-year executive education adapted by the IIMs, requiring minimum 10 years of industry experience as entry criteria for student registration is a classic example as also the incubation centres for entrepreneurship development in IIM-B, IIM-A and IIM-C. The trend of course, is also visible in the top-ranked private business schools such as the Indian School of Business, S P Jain, Mumbai , MDI Gurgaon, XLRI Jamshedpur and the likes. But these are exceptions to the rule that still is plain Jane teaching-centric education models with an eye on placements.

The risk is while the available high-quality experienced human resource pool is being stretched thin with the rapid expansion of the industry, there is no clear direction from where the additional required human resource is going to come from. The two-year-model that Indian business education adopted from the West; student admissions coming from a pool of fresh graduates with no industry experience is not going to help in any way in providing ready-to-use talent for the industry. Also, almost 90 per cent of the Indian MBA pool of around 4,500 B-schools are either departments of management belonging to government-run universities or schools affiliated to such universities. By definition, most of these schools are constrained by low-fee incomes, a bureaucratic stranglehold on their curriculum pedagogy and evaluation processes. A large segment of these also are to offer only the examination set by the university to which they are affiliated to irrespective of the innovation that they may have introduced in their pedagogy necessitating a variable evaluation system.

In the West, the concept of accreditation, which acts as a benign overseer and monitor to continuously improve the business school processes, is a norm. In India it is still an exception and even here the bulk of the first lot of internationally accredited schools are government owned rather than private-sector schools. Even the Indian government owned accreditation systems National Board of Accreditation and National Accreditation and Assessment Council serve the needs of the technology institutions and universities respectively rather than management education per se.

At the policy level, the continuing uncertainty over the future of some of the best run business schools — coming under the category of Post Graduate Diploma in Management (PGDM) modeled out of similar PGDM courses offered by the IIMs — is acting as a disincentive for fresh investment in business education from the private sector. The PGDM institutions fear that with the government keen on converting the PGDM programmes run by the IIMs into MBA programmes to bring uniformity in business education would take away the brand equity associated with the PGDM programmes that they offer at present. All India Council for Technical Education, the government regulator, also requires the PGDM institutions to renew their permit to run courses once every year causing huge anxiety and uncertainty at the start of admission season every year. The latest B. N. Srikrishna committee report on fee fixation at the central level is certain to cause more anxiety in business education. The commission has effectively suggested pruning the fee from around Rs 5-12 lakh to between Rs 1.57 lakh and Rs 1.71 lakh. The suggestion will affect all the top-rated business schools including the IIMs, which were able to offset the high costs involved in quality business education through a handsome fee income.

There is an urgent need for the business education leadership to come together and discuss the inherent risks that are decisively checkmating growth in business education at a time when the industry is desperately looking in their direction to deliver most needed high-quality human resource on short order.

The author, Thothathri Raman, is chairman, SEAA Trust, New Delhi, a global accreditation advocacy and facilitation non-profit


(This story was published in BW | Businessworld Issue Dated 14-12-2015)