The need for a business education is has its roots in people wanting to earn more money, and business schools address this need by building their propositions around placements and salaries. And then we have the economic recession, which at a profound level is blamed on business greed of managers. Where does that leave us? Last week’s AIMS 21st Annual Management Convention at the Indian School of Business, Hyderabad had some interesting a-ha moments on the subject.
Background: The Association of Indian Management Schools (AIMS), which has the membership of nearly 400 prominent Indian b-schools meets every year to deliberate on pertinent matters that ail business education and explore solutions. This year, the convention was held at ISB Hyderabad between 27 and 29 August, 2009 and had participation from several dozen b-schools from across the country. Many faces that I had until seen only on the ‘Dean’s Message’ section of their websites materialized in person before me, giving me a great opportunity to understand how they thought about and planned to lead business schools in turbulent times. The next year’s convention will be hosted at IMT Ghaziabad (dates not known yet) and if these matters pique your interest, you ought to attend the convention for all the food for thought it makes for.
My most apparent realization was that business schools have not been great at managing themselves throughout last year’s economic jolt, and this is something that the heads of institutions agree too.
From one perspective, the conditions are pretty much set against this motley bunch of Deans and Directors because the ones heading government-owned b-schools have had rigid human resource development ministers to answer to (maybe not anymore), while the private b-school heads usually have the promoter – the family business that owns the institution – setting incongruent expectations. As a result, many best practices taught at business schools are not followed in the functioning of the schools.
As AIMS President Prof Shefali Gautam said at the convention, b-schools needed to get their own governance in place by bringing in transparency in all financial dealings, faculty appointments and ethics and flexibility in the leadership.
The legally ratified ‘non-profit’ nature of the educational sector in India allows b-schools to conveniently adopt good management strategies where it suits them and leave them out where it doesn’t. For example, private b-schools with average financial backing spend double-digit crores in marketing and advertising, often going to the levels of engaging top advertising agencies to put themselves out in the student market. At the same time, many private b-schools have minimal or no processes in place for hiring or firing faculty, measuring their performance or have no evolved financial book-keeping procedures.
Prof Shefali Gautam also called on b-school promoters and trustees to take a step back and distance themselves from the day-to-day functioning of the b-school. “Promoters of b-schools usually lack the professional skills required to manage educational institutions and should instead work on empowering the faculty and department heads,” she said.
Eileen Peacock, Vice President of the Association to Advance Collegiate Schools of Business (AACSB) spoke about the importance of accreditations as a way to help b-schools keep up their quality across all levels.
Of course, all of the above holds water only for the ‘well-meaning’ business schools, who are in it to create serious educational establishment and not only for the tremendous money-making opportunity that education makes for, even though they might be private in ownership.
Getting out of the ‘we have the best placements’ rut
Centering the business education industry around post-MBA salaries helped business schools compete for students and students choose business schools for around a decade. And then the economic crisis of 2008 happened and most schools took months to place batches of a mere 150 students – some are still at it yet or have given up. But as Kellogg School of Management Dean Dipak Jain said in the convention’s valedictory address, “I really think that this economic crisis is not temporary and some serious and permanent adjustments would take place at the end of it.”
Speakers such as Dr BVR Mohan Reddy, Chairman of Infotech Enterprises profoundly blamed a culture of greed among businesses and managers as the cause of the recession, but it could be argued that the performance and sales target-oriented ways of business as we know them are interpreted by business schools as value propositions based solely in salaries and placements. It’s not surprising then that only 20-30 business schools in India can claim to have any more characteristics beyond the salaries they offer. The remaining 2,000 odd business schools more or less say the same things and offer the same propositions, making it extremely difficult for students to choose the right b-school.
Two sessions each chaired by ISB’s Dean Emeritus Prof M Rammohan Rao and Dean Ajit Rangnekar addressed the problem of how b-schools could differentiate themselves to applicants and recruiters. Some of the popular suggestions included having interesting industry tie-ups, faculty development programs that helped retired industry professionals bridge-over to teaching, additional certifications offered in collaboration with an industry and international linkages.
While all this was being discussed, a great disconnect came to light between how b-schools and the industry think about industry linkages. A professor from a Pune-based institute defiantly blamed the industry for not tying-up with b-schools as part of their Corporate Social Responsibility programs. That comment turned the discussion around, where a multitude of industry professionals unanimously made it clear that b-school and industry linkages had to be mutual, where the companies too should have something to gain. However, this part of the discussion exposed some telling illusions that the heads of our b-schools functioned by, and why they are unable to move their institutes above the general noise of placement figures.
Dipak Jain’s valedictory address threw up some extremely valuable ideas for b-schools to ponder upon. Drawing from the learnings of companies that were a casualty of the economic crisis, he said that business education needed to be sensitized to society, adapted to alternate cultures, aim to teach the importance of significance besides financial success, go beyond US-centric curriculum and talk about emerging markets.
His comment on the lack of alumni giving-back in India was of special interest to me. You may have heard of the top-ranked Chicago School of Business renaming itself to Chicago Booth School of Business last year after its alumnus made a grant of $300 million to the school – an act of giving back to one’s institute. Such instances are literally non-existent in India. I’ve often wondered if Indian MBA alumni do not consider their b-schools that significant a value-addition to their lives in order to give back, even though many of them become multi-millionaires by the middle of their careers. There might be something in it for b-schools to introspect on.
Among other conclusions, the convention decided to make a document of expectations that management institutions have from the government and submit it to the HRD Minister, who everybody agreed was the most receptive one we’ve had in decades. Dipak Jain was awarded the Ravi Mathai National Fellow Award for his lifetime of achievements in the management education area.