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Focus On The Foundation

Lack of placement offers, insufficient autonomy and research grants are some of the hurdles to India becoming a global B-school hub

Photo Credit : Mayur Bhatt

Being home to almost 5,000 B-schools, which include the government aided IIMs, India is residence to one of the largest management education centres across the globe with the country offering almost 5 lakh seats for the MBA degrees, masters in management and other management courses. However, big numbers bring large problems to the standard and quality of management education in the country.

Barring a few top B-schools and IIMs, business schools in India offer substandard education. Most of the B-schools are producing unemployable graduates, and due to the economic slowdown, campus placements, too, have gone down. India fluctuates between extremes. A populous and one of the fastest growing country, which has recently overtaken France in the economy, India is still lagging behind in quality of education and infrastructure. Similarly for B-schools, leaving aside top 20 or maybe even 30 management schools, which boast of an average package of Rs 20-25 lakh per annum, only about 10 per cent of B-school graduates outside the top crop are actually employable, industry apex trade association Assocham reports. 

Falling Rank And Rationale

To make matters worse, even India’s top ranked B-school IIM Ahmedabad is ranked 49 globally by QS Global MBA Rankings 2019, followed by IIM Bangalore, which was ranked 71. Sanjay Kallapur, Deputy Dean, Faculty Review and FPM at Indian School Of Business (ISB) believes the falling rank is mainly because of the economy as graduates’ salaries have a lot of weightage in the rankings. “Indian educational institutions need more autonomy, and funding with accountability for results. Only then can they rise in global rankings over time. Foreign students are usually looking for both education and the possibility of economic immigration. India needs to become more attractive on the latter,” says Kallapur.

While Kallapur is of the view that graduates’ salaries play a big role as a criterion in deciding the global rankings, Rajiv Shah, Director of NMIMS (Narsee Monjee Institute of Management Studies) believes it is the diversity ratio of international students that holds back Indian B-schools. “Top Indian B-schools have quality parameters well in place and are comparable to that of the global peers. There are certain entry barriers to get into the global ranking. For example, Indian B-schools have enough diversity due to students coming from 27 highly diversified cultures. But global business school ranking agencies have one of the important criteria as international students. Indian business schools perform poor on this parameter. Another reason is the lack of international accreditations,” points out Shah.

The falling rank can also be due to – as stated by The Economist – the work experience of candidates prior to joining a B-school. In fact, Indian B-schools ably compete with their foreign counterparts in terms of employment.  For instance, Indian students from IIM Ahmedabad found jobs within three months of graduating, coping better than Harvard Business School. However, they lose out due to lack of work experience, which should be incorporated with teaching methods and the absence of entrepreneurial opportunities.

Incoming students at IIM Ahmedabad had a work experience of less than a year, while top B-schools across the globe have students coming in with the experience of nearly half a decade. Enrolment of students with hands-on experience brings in a massive difference in placements, research and entrepreneurship, thus boosting the global rankings.

An AIMA Vision report released in 2016 says India should be the second best global hub after the US for B-school education by 2025. However, according to Assocham, a large section of the B-schools are not able to attract students. More than 250 B-schools have already closed down since 2015 in major cities while another 100 are struggling to survive.

The biggest reason for the gap is the rapid mushrooming of Tier 2 and Tier 3 management education institutes that unfortunately do not match the global quality of management education. Most of the students choose cheaper AICTE approved management programmes rather than business schools, reveals the Assocham report. Such problems have the potential to hold back a country that will need good-quality managers.

The problem stimulates when institutes divert their focus on filling up seats without taking into account the quality of students. Subsequently, when the students pay the institutes a hefty amount, they expect the institute to deliver results. The institutes will have to shell out money on research and knowledge to help students become employable rather than focussing on shooting up placement numbers.

With such grave anomalies plaguing a majority of Indian B-schools, can India turn around the scheme of things in just six years?

“Certainly, it is possible,” says Shah. “Business schools are strengthening their quality and global orientation and tie-ups. Regulatory reforms from the government are forthcoming to open doors for collaborative knowledge sharing and partnerships. Leading B-schools are already heading for joint-degree programs and admission selection processes to have international students thereby enriching the learning process for the MBA aspirants. Research collaborations of several business schools with international partners are paving the way for India to become a crucial part of the global network. The global recognition of Indian business schools in future would make India an important destination for business education,” points out Shah.

Focus On Placement Numbers

Manoj Pant, Director of IIFT firmly believes that placement is an important parameter in assessing the quality of B-schools. “Placements have always been an important parameter in assessing the B-Schools in India and many B-schools strive towards having a 100 per cent placement. However, international B-schools focus on research and publications as an important parameter. We are now focusing on this to bring about a great deal of change.”

The problems are colossal and the AIMA vision seems a tough ask. The employment prospects for Indian b-school graduates have also dropped. The cost of courses has increased even in the lowest-quality schools while the salary graduates can expect to earn is falling. And under such circumstances, Indian students prefer foreign education, most notably the US, where the median salaries grew by $5,000 for the class of 2018.

Building The B-school Hub For India to attain the position as one of the top global MBA destinations, it needs to shelve its academic curriculum and dive deeper to fix the disconnect between educational and employer requirements. Bala V. Balachandran, Founder, Dean & Chairman of Great Lakes Institute of Management, India believes it is not necessary to ape the parameters that work in the West and says that the attitude is destroying Indian education culture, where the emphasis is on learning.

Balachandran is positive about India becoming a global B-school hub and suggests a few things to reach the goal. “Over the past few years, I have been witnessing a sea-change in the B-school landscape in India. It is vibrant, progressive, intuitive and adaptive. There are four major aspects for a B-school to become the best in business – outstanding faculty members, cutting-edge research repository, relevant and robust industry collaboration and quality/scope of the programme offerings. If even a handful of B-schools in India can commit to delivering all these four aspects consistently and continuously, we can surely even surpass the US to become the best global hub for B-school education by 2025. Technology has always been our core competency and we must use our prowess in technology as the vehicle through which to regain our lost paradise.”\

IIFT’s Pant is sceptical about India becoming the second global B-school hub but calls for more autonomy for Indian B-schools to improve. “In a country with over 3,000-plus B-schools, only about 1 per cent have a credible standing internationally. However, over a period of time, Indian B-schools can strive to make India a global B-school hub. With more autonomy in the functioning of B-schools and the need to bring in more international faculty we may probably reach about 10 per cent by 2025,” says Pant.

Challenges Ahead

 Apart from employment prospects and outdated curriculum, some of the challenges for India to become B-school hub are a better standard of living. “The US has traditionally been perceived as the land of opportunity to rise to the top purely on the basis of sheer competency and hard work. The same holds good for many other destinations of higher education like the European countries and Australia,” says Balachandran.

“Other factors are the lure of a better quality of life and better financial prospects when one goes to a foreign country for study and work. In India, the education system is completely bogged down by all kinds of restrictions. Inclusivity has, to some extent, damaged the prospects of brilliant students who prefer to travel to other countries in search of a just and fair system of education and employment. So, unless the system undergoes a metamorphosis this is a trend that will continue,” he further adds.

India certainly can become a hub for management education globally, provided it can come good on certain aspects according to ISB’s Kallapur. “If the Indian economy grows at a faster pace, and Indian institutions are given the autonomy and degree-granting power consistent with international norms, which include one-year master’s programme, it is certainly possible. Lack of support for research has been an issue with Indian B-schools. China provides much better support for research, and has therefore overtaken India in the global B-school rankings.”

While the road ahead is tough, the time is ripe. The political furore in the US has led to the millennial generation rethink their business school destination. Notably, GMAT exam takers for MBA in the US declined by 3 per cent in the last half-decade, the same has increased by more than 6 per cent in India since 2013.

India can certainly take advantage of the situation, aligning itself with the vision of AIMA and working towards producing a better crop graduates, improving its graduates to employability ratio and establishing itself as a global hub for B-schools importing more students and be able to provide a better prospect of education and work.