Management Education in India: An Agenda for Reform

Abstract:
Management education in India has taken off in the last two decades to the point where
it is today the career of choice for any young person seeking to make a career. In this
paper we have first analysed the evolution of MBA education worldwide and then a
greater focus is laid on the analysis of the scenario in India. An attempt has been made
to look at the various internal and external factors plaguing MBA education system. The
internal factors are faculty, selection procedure and pedagogy and the external factors
are regulatory body, role of government, diversity and placements. Based on research
going on worldwide, we have also dealt with some of the factors that are normally
overlooked while proposing any reform in MBA education namely focus on development
of interpersonal and intrapersonal skills apart from business skills. We have proposed
some solutions to tackle these issues in short term and long term. This paper emphasises
on importance of synergy and standardized process for all the institutions. The
framework proposed in this paper has been designed within the Indian context. The
implementation part has been dealt with in detail with the sight of potential roadblocks
that one may hit in the way of implementation. We acknowledge the fact that
implementation would not be an easy task unless proper planning and a will to change
the system is present.

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History:
The basic aim of management schools the world over has always been to train suitable
candidates into managers who can then directly enter the corporate world instead of
having them rise through the ranks. The general MBA programme is thus designed to
help students to grow a general professional experience in all segments of economic
activities, basically simulate the environment in corporate organizations within a testing
ground. This allows ‘would be managers’ to make mistakes with the luxury of learning
from them and over two years, gain a reservoir of experiences which will equip them to
deal with a variety of situations that they may encounter during the rest of their lives.

It was a good two centuries after the industrial revolution, as communication took off and
organizations expanded and spread their footprints all over the world; a need was felt for
trained managers to manage these organizations. Thus, management education is a very
young science, and has as a discipline emerged only over the last 100 years. The
Wharton School of Finance and Commerce was started in the year 1881, perhaps the first
official ‘Management School’ in the world. The next two decades saw the opening of
business schools at the Universities of California and Chicago and with the establishment
of Harvard Business School in 1908, management education came into the mainstream.
In India, management education formally took off in the after independence in response
to the strategy of planned development with modernisation and self reliance and was
largely based on the model followed by the American universities. Among the
forerunners in India were XLRI Jamshedpur in 1949, ASCI Hyderabad in 1956 and
NITIE Mumbai in 1963. With the help of the Ford Foundation, IIM Calcutta was the first
Indian Institute of Management to be set up in 1961 in collaboration with Sloan School
of Management followed closely by IIM Ahmedabad in 1962 in association with
Harvard Business School. The central government undertook the responsibility of
providing financial support to the IIM’s as grant-in-aid institutions which gave them the
chance to grow rapidly.

However, it was only in the 1990’s that management education boomed in India. After
liberalisation, as the economy has grown, the private sector has entered the market and to
satisfy its needs, the business school market in India has exploded in the past few years.

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With more than 1,600 management schools offering undergraduate business and MBA
programs, today India is one of the largest producers of MBA’s in the world.

Management institutes in India can be categorised into 4 broad types:

1) Institutes like IIM’s and other private institutes with full time faculties and the
resources to maintain a high standard of education
2) University departments and affiliated institutes which have small but stable
faculties and a system in place
3) University departments and affiliated institutes which function with inadequate
faculty and material resources and survive on borrowed assistance from various sources
4) Commercial institutes which are grossly mismanaged and suffer from a paucity of
basic resources as well

It is thus inevitable that with the bourgeoning industry and the reality of the job market
where a graduate degree is not very valuable that there will still continue to be a rush for
management degrees. Hence, the high volume of management graduates that are churned
out every year will only increase in the foreseeable future. And most of this increase is
going to take place in the last two categories. The quality of students entering into the
corporate world will obviously depend on the students who are admitted in and hence it
is unrealistic to expect the same level across institutes. However this does not mean that
the quality of education provided should be any different. The question is thus in light of
the recent proliferation of management institutes, of how to develop a framework which

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can cut across all divides and ensure that India becomes a world leader in management
education. To develop a framework of this sort, it is essential to analyse the ills that
plague the management education sector in India today first.

Model:
Most Indian management schools follow what is the Western model of education based
on certain hypotheses:
• Human behaviour and motivation is guided by the fulfilment of human needs
• Organizations must function and work under a free market scenario
• The role of organizations is to serve customers at lowest price and maximize their
utility
• Organizations can freely hire and fire workers as the market requires
It is clear to anyone who is associated with the Indian educational and cultural system
that this is not a system which Indian students will be able to easily relate to and neither
is it one which Indian organizations can follow in the existing environment. Hence a
modification of the very pillars of management education may be the need of the hour. It
is essential that we in India come up with a framework which candidates can relate to and
such an overhaul of the management education system may need changes right from the

Agenda:

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Functional focus:
Today in India, most management schools aim to equip their students with a variety of
skills in a two year period. This essentially means, teaching a very large number of
subjects over the period of the course. What this ends up doing is equipping students
with the basic skills over a variety of disciplines but without the expertise in any specific
domain. Scratching the surface will not help, the focus should be on depth rather than
breadth.

At present the focus of MBA education is primarily on developing business skills and
analytical ability. There is little focus on interpersonal and intrapersonal skills owing to
their intangibility. Many a business fails not because of lack of business skills but due to
lack of training in these areas. Undergraduate courses in the rest of the world focus on
these skills so that students develop them early in their life but this is often looked over
in India. Compensating by adding subjects related to these aspects will increase
employability of students and assist them to being complete managers.

The course structure needs to be altered to this end. At present the course structure is
divided into two parts namely core courses and elective courses. The problem lies in the
distribution of these two components; which is presently skewed towards the core
courses.

The stress should be on providing the students with a variety of elective options and
perhaps reducing the number of core subjects. Instead, most management schools in
India strive to provide a variety of courses allowing them cater to all students. In almost
all management schools across the globe, there is a focus on one function such as
marketing at Kellogg, technology at Stanford or even general management at Harvard,
which succeeds in attracting a specific kind of students. In India, with the exception of
some top tier management schools, few other institutes still have a core competency by
which they are recognized. This problem unfortunately penetrates right down all tiers of
the system where every management institute looks to cater to the needs of every
possible candidate. There must thus be a strong focus on getting students to choose the
desired specialisation, at least tentatively before they apply to a management school. This

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may require an overall reform of a student mindset. Students fresh out of college have
very little idea of what they want or what they are looking for. There is also therefore, an
extensive need to re-emphasise the need of work experience before management
education. With experience comes an exposure to various functionalities in an
organization, which will make a candidate better equipped to choose what he wants to
study. India is perhaps the only country in the world with such a large proportion of
undergraduate students opting to study management straight out of college without
knowing what they are getting into.

More elective course not only imply a larger faculty student ratio but also ensures all
present course structures are constantly kept updated by the concerned faculty in fear of
extinction due to lack of demand.

Lower rung schools:

The question in India is as stated previously of quality and not quantity. The gulf,
between the products of top tier management schools and that of lower rung institutes is
immense to say the least. Considering the diversity of the students who join different
types of management schools, a one size fits all approach will not work. There have to be
different targets for different management schools with regards to the education they
should provide as well as the methodologies they adopt. A minimum necessary condition
for a business school to run should be that students learn the requisite fundamentals. Any
industry recruiting from a lower rung management school is aware of the type of roles
the students can perform. It is the school's responsibility to make them employable for
the basic level of these roles. The industry as a whole requires a variety of positions to
fulfil and a school should look to initially manage expectations and establish itself before
gradually raising the bar.

However it’s the established schools that need to raise the bar for themselves whether it
comes to ploughing in resources, development and exchange of faculty and professorship
programmes with industry. It would also do well to set up a feeder system where top
management schools have to mandatorily link up with lower ranked ones. Exchange of
material, faculty and pedagogy in general will help the lower tier schools grow as well.

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Industry exposure should not be limited to summer internships. Instead it should be in
form of perpetual links with the industry via alumnus, live projects. In addition to
international student exchange programmes, there should be interwoven internal
management school exchange to gain from each institute’s strengths. Access to
excellent infrastructure in form of journals and research papers is a must.

Selection process:
Essentially, the selection methodology of most schools in India is to shortlist students
from heavily competitive entrance exams and then filter them on the basis of their group
discussions and interviews. While the sheer numbers (see figure) in India make it
impossible to shortlist candidates in a more elaborate matter, in the current scenario there
is far too much focus on clearing the multitude of entrance exams. While analytical skills
which these examinations do test are essential for any manager, there is far more required
to be a complete and well rounded one. What could be done is to define a cut-off
percentile and then have an exhaustive process by giving a good deal of importance to
past achievements and any managerial traits which people have showed over the course
of their lives.

The myriad of examinations that are now used by every college to select students also
can be done away with to a great extent. What the government can do is as a matter of
public policy is to have a centralised examination system. There will have to be different
exams for different tiers but having a maximum of two or three exams will reduce the

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infrastructural burden as well. A committee can be formed consisting of representatives
from various colleges who can set the parameters at which the entrance test will be
designed.

An economical approach would be outsource the primary filtering to external agencies

and faculty focussing only on interviewing shortlisted candidates thus spending very
little time in non academic tasks.

Faculty crunch:
The faculty situation in management schools is quite alarming. As per some estimate
number of colleges in year 2000 were 600 and it has increased to 1400 in 2009. Even if
we take conservative estimate of a faculty strength of 40 per college there is still a
requirement of at least 60000 more trained faculties whereas only 40% of them are
available. The future is also equally gloomy owing to serious imbalance in demand and
supply. The nearly static supply of Ph.D. holders--is also adding to the woes. The
situation is not very encouraging in top schools too, e.g. there are shortage of 29 and 35
faculties respectively in IIM A and IIM B, which are very much the industry leader. The
situation is even worse in private management schools where relying heavily on guest
lecturers sourced from other colleges is not uncommon.

A survey conducted by ASSOCHAM, found that beyond the top 30 institutions, the level
of teachers is abysmal. The poor quality of faculty is illustrated with the following table:

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Enrolment in FPM courses in India is very low. One reason is the stipend paid to the
students is as low as 15000 INR/month in top colleges. There is little incentive to do a
FPM program for four years and join as assistant professor in the pay range of Rs.
20000-30000 pm. According to the Director of IIM Ahmedabad, not even a single
fellowship student rejoined IIM A as faculty of the 15 students who passed out in 2008.
One way to improve this situation is to incentivise the FPM course so that it becomes
more lucrative and attractive to the students. Today any student who is on the fence with
regards to continuing further education and joining a corporate job will by the sheer
pressure of economics, choose the latter alternative. Also number of specializations can
also be increased so that more and more students from diverse backgrounds can come
and join. The top tier colleges could possibly brand FPM courses as their flagship course
to encourage and attract bright minds from industry as well as from academia.

Moreover, there is a wide gap between the industry demands and the training imparted in
management schools. The industry demands teamwork, adaptability and leadership
ability in potential candidates however, the teachers who are supposed to impart these
qualities themselves are barely equipped with the requisite skills. The current FPM
program to train teachers primarily focuses on subject aspects only. The design of the
FPM program should be modified by adding courses on leadership, ethics, corporate
social responsibility etc.

Behind every good student is an even better teacher and hence reform in management
education has to start by allowing quality teachers to enter the system and then retain
them.

Placements:
The placement conundrum is probably one issue which dominates the management
school scenario today. Very few candidates actually choose a school for the course or for
the faculty. What permeate all choices are the final placements that the school can offer.
While it is impractical to suggest that colleges should not publicize their placement
figures, regulatory bodies can step in and ensure that the way in which this data is

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published is standardised. Placement figures should be strongly verified before being
published.

Even within colleges, placements seem to be a far greater priority as compared to the
academic curriculum. In most top tier colleges, summer internships are seen not as a
chance to get some industry exposure but as an opportunity to get a Pre Placement Offers
(PPO). Hence, there is a mad scramble for summer internships as well which deviates
from the academic rigour.

The excessive focus on placements has ensured that colleges are not looking any more
for making the right fit, but for getting the brightest young minds that are available and
then introducing them to as large a set of skills they can. The industry has been now
accustomed to selecting students from management schools and then training them in to
the organizational system rather than looking for a finished product. A government
mandate applicable across all tiers of management schools to conduct all placement
related activities only in the final term would ensure minimal interference in the
academic pursuits of students.

Accreditation:
Perhaps one place where the buck starts and stops for a great number of problems in
management education is with the regulatory bodies that have been responsible for the
sprouting of management schools arbitrarily across the country. The way management
schools are being recognized demands a serious look-over. In the present scenario more
than 1 lakh students are rolled out every year from management schools but only ten per
cent of them are employable in the industry. India is the one of the largest producer of
MBA’s but their academic standards remain uneven as no single, independent regulator
oversees the universities and colleges. As a result, the quality of many faculty members
falls short, leaving students with a degree that is devoid of any real value. It is thus
necessary to first gauge whether a management school has the necessary wherewithal to
produce quality candidates before allowing it to set shop. There are several instances
where a business school is approved, promptly, in a small house of a metropolitan suburb

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without the requisite teachers, infrastructure, or facilities, but established universities
experience difficulties in obtaining similar approvals.

Presently the method used for accreditation is largely quantitative and dependent upon
hygiene factors i.e. those without which it is impossible to function at an optimum level
but not the qualitative factors that are necessary to contribute to the academic growth of
the students. The prevailing criterion mainly focuses on infrastructure aspect such as
number of computers, faculty, classrooms etc. The regulatory body should fix its criteria
for approval on qualitative basis such as number of full time faculty with Ph.D. degree,
subscription to international journals, publication of papers in journals by faculty,
selection process, industry interface etc. The other distinct advantage of these procedures
would be that it will discourage those institutes who operate solely for profit.

Pedagogy: Rethinking on case based method:

A case based pedagogy fuels the learning process to a certain extent but blindly aping the
HBS frame work and cases will not work. Cases studied in the Indian management
schools must be those with an Indian context which will help the students get the feel of
solving a real business problem.

Presently cases are developed separately in each college and there is little or no synergy.
Development of a centralized case bank where each institute can develop their cases and
deposit them for general use later on may be the solution. A clearing house will be
needed for the purpose of clearing the cases produced as to whether they are fit to be
taught and then a ‘case bank’ could be formed. Initial data on cases developed by Indian
B-schools are however not very encouraging. Only IIMA produces more than 30 cases in
a year and other premier schools don’t even touch 20 (source: respective IIM websites).
The number of cases produced in a year should be linked to recognition criteria.

Future Policy:
The customer demand or market-signals are vital lighthouses to give management
schools initial inputs while selecting a strategy and adopting teaching methodologies.
However, it would not be correct to have a postgraduate programme that is completely

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shaped by the market needs. Institutes of higher learning must look to lead the market
and not just satisfy its needs. Thus encouragement and investment in high quality
research is a must.

A business school must understand where it wants to excel, and find its slot. The
question has to be asked whether a postgraduate programme can be offered as a low-cost
model. Is it possible to generic model which will cater to the needs of the average student
or should it be catering to a niche market?

To address the issue every institute depending upon their objective and core strength
must decide the admission criteria and look to develop their niche. This will ultimately
allow every institute to optimize their course offerings.

Road Map for Implementation:

SOLUTIONS

Short Term Goals Long Term Goals

• Selection • Faculty training

• Accreditation • Case development

• Course structure • Niches for colleges

No matter how much we plan, everything stops at the implementation phase. Definitely
there will be myriads of problems at the time of implementation however with diligent
planning, final objectives can be achieved. Here we propose to divide the solutions
proposed into short term (4-5 years) and long term (10 years) goals.

Broadly the revamp of selection procedure, accreditation, course structure and placement
can be targeted in short term. Selection procedure does not depend on any external

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factors so it can be taken up immediately. The institutes can be broadly divided into three
tiers and separate entrance examination can be formulated for each category. Essentially
there should not be more than three examinations except for some niche sectors. Various
accreditation bodies can be combined into one central body so as to maintain uniformity
in recognition. Various qualitative parameters should be linked with accreditation
parameters. A high level committee should be formed with members from industry,
academia and alumnus for restructuring of courses. Based on recommendations given by
them course structure can be restructured. It’s high time that institutes start providing
standardized placement figures with common denominator.. The responsibility of
verifying data can be outsourced to some audit firm by regulating agency.

The faculty development, rich case development and creating a niche for tier-2 and tier-3
colleges can be taken up in long term goals. A national faculty training institute can be
developed to impart training into existing faculty and course of FPM could be re looked
into. Experienced people from industry can be imparted suitable training so that they can
serve as guest faculty. The case development in Indian context is very important and in
order to address this issue we can create a national case bank consisting of members from
top institutes. In the long run every institute should create a niche for them and in order
to achieve these institutes from top ten categories should mentor them in identifying
niche based on their strengths. The competitive environment should transform to
environment of collaboration among colleges in order to achieve long term sustainability.

Road Blocks:
There will be many a road blocks in the way of implementation. The biggest challenge
would be to attract best minds to enrol for fellowship programs and convince them to
join academia. Collaboration among the institutes may also prove difficult as successful
institutes may be averse to mentoring other institutes. Resources in top institutes are
already stretched and to stretch them even further would be a difficult challenge.

Switching over to a completely new selection process would be difficult for institutes as
well as students. Maintaining synergy between government and private institutions is

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another area of concern because without that every effort in the direction of reform
would fail.

In India a number of private institutes rely heavily on inflated placement figures to

attract students so once the standardized process of placement reporting will be in place it
will be very difficult for them to fudge data. Defining this standard and imposing it will
prove difficult.

Conclusion:
As the producer of the one of the largest number of management graduates in the world every
year, India has the chance to become a world leader in management education. However the
current model is not sustainable and will require a considerable upheaval before becoming a
benchmark in the world. Through a blend of short term and long term goals, the management
education system in India can be transformed into a factory which produces successful global
leaders. To achieve this goal, a concerted effort of government, industry and students is
necessary. But all this would be futile without the cooperation and synergy among
management schools throughout the country.

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