By Dr Gursharan Singh Kainth

Recently, the interest towards management education in India has declined. The Indian management education market has become highly commercial with problem of plenty where educational institutions have become more and students have become less. Is it due to dearth of career opportunities after doing MBA or lack of charm towards management education (MBA) or both? Previously there was a good boom for MCA course and currently there is less number of students pursuing this course due to dearth of employment opportunities. Some of the educational institutions providing MCA courses have closed down due to less admissions and the same thing is happening for MBA courses in India. There is something wrong somewhere, and it is time to analyze and address it earnestly.  Barring graduates from IIMs, the (Business) B-schools are losing fast shine of attracting corporate India Inc. for campus recruitment and are increasingly facing their survivals. The quality of management education in India across disciplines is poor and does not meet the needs of the corporate world. Only 10 per cent of graduates from Indian business schools excluding those from the top 20 schools get a job straight after completing their course, compared with 54 per cent in 2008. Students are of the view that the business schools promote their brands only on placement and by boasting about high salaries. Furthermore, there are more engineering colleges offering MBA courses within the same campus along with engineering courses. MBA courses and management education should have unique identity and should be separated from engineering colleges. It has become a problem of plenty. It is observed that there is a step motherly treatment for MBA courses in engineering colleges which needs to be addressed immediately.

And some of the so called business schools offer freebies to attract the students without complying with AICTE guidelines. Some students join MBA course as a pastime or to suffix this degree along with their names. Hence, there is no seriousness among them. Derecognize the educational institutions that cannot create intake of students for two consecutive years. Encourage the best material to join. Don’t let Tom, Dick and Harry enter into MBA as it loses value. There should be a grievance cell like Ombudsman where students and faculty can complain to report the irregularities. Universities must have control over erring institutions and check them regularly. It is observed that the faculty who don’t have any teaching experience join these so called business schools as a stopgap arrangement to teach these courses resulting in poor pedagogy.

There is no quality control, the placements are not commensurate with fees being charged, the faculty is not good enough and there is no infrastructure. The biggest reason for this gap is the rapid mushrooming of tier-2 and tier-3 management education institutes that has unfortunately not been matched by commensurate uplift in the quality of management education. The most of students prefer to choose cheaper AICTE approved programs rather than b-schools. There is need to update and re-train faculty in emerging global business perspectives which is practically absent in many b-schools, often making the course content redundant.

It is true when the Indian management Institutions was started it had its roots in western economy. Even after two decades the satiation largely continues to be except minor changes. The students have witnessed a complete unanimity on emphasizing the significance of training part instead of theoretical framework. Nevertheless, comparatively lower mean score on the institutional arrangement for training and placement slightly disappoints the students when they say that institutes take less interest than the desired in training and placement activities and here sharp variations have appeared according gender and the studying institute.

According to Assocham report, since 2009 the recruitments at the campus have gone down by 40 per cent in the year of 2012. As a result the B-schools and engineering colleges are not able to attract students with more than 180 b-schools have already closed down in 2012 in the major cities such as Delhi-NCR, Mumbai, Bangalore, Ahmedabad, Kolkata, Lucknow, Dehradun, while another 160 are struggling for their survivals. While comparing the curricula with the best institutes of the country, students have registers their displeasure while denying that the curriculum is at par with the best institutes of the country. As said earlier teaching methodology is an integral part of management training, however the students are of the view that only lecture method is not appropriate for management education rather it must be supplemented with latest and need based teachings methodologies.

The economic slowdown has impacted placements at B-schools, including the best ones. The downturn has taken its toll on placements in management education. In challenging times, companies tend to scrutinize the cost of new recruitments closely, with some even postponing them. Till 2007, Business students had no interest in public sector units, but thereafter many have been joining PSUs, especially the banks – opting for slimmer pay packets if job security is guaranteed. This year too, recruitment is likely to stay flat as in the recent past.

Has this adversely impacted the demand for business education? Initial reports of the number of students appearing for the CAT, whose scores form the basis of admission at IIMs and other top B-schools, show a drop from 214,000 last year to 196,000 this year. But there could be other reasons for the fall. Many students find CAT difficult and non-transparent. Also, the online format of the exam has tended to confuse and disengage some, one of the largest B-school entrance exam trainers in the country. Indeed, other examination formats bear him out since they have seen an increase in numbers. For instance, the All India Council for Technical Education’s (AICTE) Common Management Admission Test (CMAT) has added numbers of up to 140,000 applicants within two years. XAT, or Xavier Admission Test, conducted by XLRI, Jamshedpur, has seen the number of applicants go up to 90,000 from 60,000 last year.

The other trend is that fewer B-school aspirants are looking overseas, thanks to the uncertain economic climate in many developed countries, especially Europe, and the continued fall of the rupee. If anything, education here has become cheaper. Every year up to 300,000 students go abroad to study further, of which a large number study management. In 2012, for example, there were over 54,000 Indian international student enrollments in Australia, of which more than 31,000 were enrolled in management and commerce courses. Australia has experienced some decline in Indian international student enrollments in recent years, due to various reasons, including student visa policy changes, the global financial crisis and the strength of the Australian dollar. In fact MBA numbers have flattened out and even shown some decline. Interest has shifted to specialist programmes within B-schools.

Quite a Business schools have reported that starved placements coupled with a bad economy is the major reason for a decrease in the number of MBA applicants. But the Indian students have become wiser and today while reading and analyzing the placement reports of tier-2 or tier-3 B-Schools (certainly inflated ones); they also try to look at the fact that how are the placements in the specific domain/profile in which they want to build the career in. And most of these B-Schools where we are seeing a major drop in the number of applicants and vacant seats are those which do not meet the certain minimum standards of profiles which an intelligent Indian student expects today.

So, why do not we see these B-Schools trying to improve themselves and raise their brand equity to get the coveted profiles being offered at their campus? This will make studying in these B-Schools in alignment with the career goals of students and the number of MBA applicants shall definitely rise. Remember, it is not about the mere number of digits which offered CTC has, but the profile offered and it is one of the weak areas of majority of Indian B-Schools especially tier 2 and tier 3. Surprisingly, it has been seen that Directors of certain reputed tier 2 B-Schools still try to run away from this fact in their interviews/quotes given to different websites and are happy to blame everything on the economy. And this is the area where B-Schools in abroad do well in providing the opportunities to get in desired profile and hence there has been a gradual increase in the number of MBA Applicants to B-Schools abroad.

Another reason for decrease in the number of MBA applicants is the increase in the awareness about MBA as a career and need of it to boost the career. If one wants to become an entrepreneur, a photographer, a singer, a dramatist etc. – Why is an MBA degree needed here?

It is good to see people doing lot more introspection to try to arrive at the decision on what they actually want to pursue as a long term career and then seeing if an MBA as a degree fits in the same or not; rather than the boom years where people were just following the crowd, leading to the increase in the number of MBA applicants. This is not something which is hypothetically, but there have been actual examples where people have left the admission offer of top B-Schools or decided to not to pursue for MBA as a career (not giving any MBA exam even), to follow their passion and to achieve their dreams! More importantly, people have also started recognizing the fact that an MBA degree is not a guarantee of success.

Seeing the changing trends in the decision making when it comes to opting or not for MBA, it is high time when B-Schools should introspect as well and stop putting everything on the external factors. Rather, if they do want to actually contribute to career building of students and not just be the money making machines for private corporate groups (by just focusing on increasing applications through fudged placement reports)- they should try to see on how can they address this gap. And during this process, appreciate that Indian students are turning wiser and objective in career selection.

B-Schools should think if they can stretch themselves and take a leap forward to start dedicated courses to promote and facilitate those who aspire to be entrepreneurs, can B-Schools provide a platform to a candidate who aspires to be a dramatist through a dedicated course which provides the relevant exposure to the student. In India, business school should start at the undergraduate level first like Wharton Business School; Singapore Management University that become world class with its undergraduate programmes. We have this caste system here, that a postgraduate degree holder is more sophisticated than a graduate. Many under-graduates outperform the post-graduates because postgraduates are counting the hours to get a job, while the undergraduates are more serious about their studies. We need to backtrack and go to high schools, and impact certain high schools offering the international baccalaureate degree. We are getting easily 200 applications annually and we select about 20-25 from India. I don’t know where they have the money. My university will cost the kid a quarter of a million dollars for four years of education. But parents are putting in the money. Parents will not need to put in this money, if they have an option here within the country itself. An MBA should not be measured by the quality of the first or second job, but by the career a person gets

Another reason for the decrease in the number of MBA applicants is the increase in the awareness about MBA as a career and its need to boost the career. If one wants to become an entrepreneur, a photographer, a singer, a dramatist etc. – Why is an MBA degree needed here? It is good to see people doing lot more introspection to try to arrive at the decision on what they actually want to pursue as a long term career and then seeing if an MBA as a degree fits in the same or not; rather than the boom years where people were just following the crowd, leading to the increase in the number of MBA applicants. This is not something which hypothetical, but there have been actual examples where people have left the admission offer of top B-Schools or decided  not to pursue for MBA as a career (not giving any MBA exam even), to follow their passion and to achieve their dreams! More importantly, people have also started recognizing the fact that an MBA degree is not a guarantee of success.

Seeing the changing trends in the decision making when it comes to opting or not for MBA, it is high time when B-Schools should introspect as well and stop putting everything on the external factors. Rather, if they do want to actually contribute to career building of students and not just be the money making machines for private corporate groups (by just focusing on increasing applications through fudged placement reports)- they should try to see on how can they address this gap. And during this process, appreciate that Indian students are turning wiser and objective in career selection. B-Schools should think if they can stretch themselves and take a leap forward to start dedicated courses to promote and facilitate those who aspire to be entrepreneurs, can B-Schools provide a platform to a candidate who aspires to be a dramatist through a dedicated course which provides the relevant exposure to the student.

There is a need for changes in the education system in India so as to encourage freedom, creativity and innovation from the school level itself. Education system in India restricts innovation. As a result India ranks 66 out of 140 countries in terms of local dynamics of innovation as per the UNDP report. Restricting freedom at early age in schools by expecting children to write exactly as written in text books reflects later in industry, which leaves less scope for innovation due to lack of creativity. Before creativity would come inquisitiveness, to seek answers – listening and questioning skills would be the second stage and then would come creativity. In our Gurukul System – Guru conducted the test from time to time in different forms to evaluate the extent of learning – today students have to learn (or memorize) to pass the test. If all stakeholders including institution builders, academic leaders, educators, recruiters and students work collectively there will be improvement in the intake of students for the management education thus producing quality managers and leaders in compatible with the corporate world.

Chief executives in most fields tend to agree that it can be hard to separate their companies from others selling similar products. Increasingly, the businesses that stand out are successful because of what they are able to do—their unique set of capabilities—not just what they sell. Think about Apple’s (AAPL) design capability, Amazon’s (AMZN) customer support and data analytics, or Danaher’s (DHR) superb operational skills. This form of success has eluded most companies because these distinctive capabilities almost always require help from many squares on the patchwork quilt of corporate functions: sales, marketing, IT, distribution, and so on. The success of a company such as Amazon is extremely difficult to replicate in a world of organizational silos, where companies seem to focus on developing world-class capabilities department by department. CEOs can’t just relegate innovation or customer management to the R&D or sales groups. Successful companies tend to set up more permanent teams around a specific task and add high-level people (a chief innovation or digital officer) to help accomplish it. But many companies struggle to excel in a world that demands fewer departmental borders.

Challenges of this magnitude require more than incremental adjustments—and business schools are ideally situated to help CEOs with the problem. Business schools have great faculties of thinkers across many disciplines and the convening power to unite executives and academics to rethink their issues. B-school students also come from all kinds of fields, locations, educational perspectives, and motivations, offering a much broader set of perspectives than is always available in the boardroom. Imagine MBA classes that convene people from different disciplines to foster new, innovative answers to business problems. Students in a class that combined manufacturing, R&D, and marketing, for example, would have to move way beyond the typical innovation curriculum to figure out how to leverage supply chain strengths and market insights. Business schools can be an ideal forum for untethered thinking on the topics that businesses are wrestling with and as a way to train future leaders to work beyond traditional corporate strictures. There’s another reason, too. Functionally driven B-schools have to rethink their own structures. The current setup may strengthen deep research in such areas as economics, marketing, and finance, but it makes research and teaching that cut across different disciplines more difficult.

Some schools are taking steps toward a more democratic approach to business education. The Stanford Graduate School of Business is well-known for attacking tough problems by bringing together experts from various disciplines, and the Kellogg School of Management is putting in place a matrix structure to bring together academics and practitioners from various disciplines. The approach is already changing how the school approaches the field of data analytics, traditionally the bailiwick of marketing and/or technology. Under the new setup, Kellogg brings in experts from operations, strategy, and finance, as well as marketing and technology, with the goal of connecting the science of data more directly with applications that could benefit the most. Today, B-schools confront something of an identity crisis as they rethink their purpose in research and education. But they also face a singular opportunity to position themselves as think tanks for CEOs to develop new ideas. We hope more schools take advantage of the opportunity.

In India, we only have 15-20 per cent of MBAs going for investment banking and consultancy jobs. But it is going to rise every year. Here, we start with a post-graduate programme. The programme in the US is for undergraduates first. The ideal combination for the Indian business education would be to create a four-year programme (10+2+4). And the first two years should be mandatory liberal arts. There is nothing better in management than to have a foundation in liberal arts. Studying humanities teaches the business leader of the future to be a humanist first. Education was designed for the absolute power-holding people in the feudal system — kings and emperors — so that they became humanistic rather than autocratic.

Indian institutes are very good at improvisation and market opportunity is very big. An MBA is not just for businesses. IAS officers need business degrees. You could have an MBA for politicians. There have recently been programmes for retailing. Institutes here can scramble and offer all those. But the biggest paradigm shift in India can be brought about by government policy. The Indian government will change paradigms by changing policy and that could shape the future of management education here.

AICTE (All India Council for Technical Education) is not a true accreditation body in the manner that ASCSB (Association to Advance Collegiate Schools of Business) is. This is why Indian management schools are increasingly going for foreign accreditation. They put 2-3 years of investment in your institute, and help your institute acquire the accreditation. The key ingredient for MBA institutes today in India is to create a global reputation, and for that a global accreditation is necessary. There is regulatory tension for management schools in India with four fronts of regulation: the UGC front, the AICTE front, the private universities, and now foreign universities with autonomy to establish campuses here. Indian management institutes are going to see a shake out. Soon MOOCS (massive open online courses) will also become legitimate. What is peripheral becomes core, what is core becomes peripheral. MOOCS were initially laughed at by top American universities, but now all of them offer these courses. It is a matter of time before this trend makes what is not legitimate today very legitimate. Both business leaders and management educators feel that there is a mismatch between the industry expectations and supply of talent from academic institutions. Hence bridge the gap. Update course curriculum constantly to meet the rising expectations and aspirations of the industry.

Posted by The Indian Economist | For the Curious Mind