Fastest Company
The most detailed and fair survey of India's B-Schools. Speed, competition, competence, knowledge, hope.

PREMCHAND PALETY

According to quantum physics, the very presence of an observer changes the event he is observing. Something like that seems to be happening in the Newtonian world too, as far as the annual Outlook survey of business schools is concerned. The ranking exercise appears to have inadvertently triggered off healthy competition between management institutes to do more research, improve their processes and facilities.

Sample the statistics. In year 2000, when Outlook did its first survey of business schools, as many as 70 per cent of the institutes did not have a single faculty member who had published a research paper. Now it’s the reverse: in almost 75 per cent of the B-schools surveyed this year, at least one research paper has been authored by its faculty. In our ranking we give considerable weightage to intellectual capital, of which research output forms an important part (see Methodology). This may not have any immediate impact on placements, but in the long run are very important for faculty development, curriculum updation and finally, for the economy as a whole. If, of course, these research papers are written with the aim of pursuing and expanding knowledge, and not merely to push the writer’s B-school up the ranks.

Naturally, placement remains the parameter with the highest weightage in our judgement. For, the MBA is a professional degree that’s supposed to prepare young men and women to engage with and master the real competitive world of corporate life. And it’s unavoidable that placement performance is judged through the filter of the compensation packages offered to graduating students. And here, at the risk of blowing our own trumpet, we can say our methodology has the most detailed and fair procedure to rank institutes on placement performance, including a unique return-on-investment index comparing salaries and school fees.

Several publications now do annual B-school surveys. Some consider only the average salary offered as a criterion for placement (we take into account median salary—a more valid indicator than average—and also maximum and minimum salaries, plus maximum salary for foreign jobs). Some, startlingly, do not take into account the obvious fact that schools visited by companies from the US and Europe to hire for their headquarters are better than those that draw only Indian recruiters. Others, strangely enough, rely only on perceptions of recruiters and academics and don’t crunch any hard numbers.

This is galling, since the primary objective of a manager is often defined as "reducing uncertainty". A perceptual ranking is nebulous, and can change dramatically if the sample of respondents changes, or even if the same sample is surveyed at different times.

We also do a perception survey, but we do it as a year-long exercise to weed out subjectivity as far as possible. Even at the end of this, we give "perception" only a 20 per cent weightage. The rest comes from hard numbers supplied to us by the institutes. If some numbers look exaggerated, we personally visit the schools to verify. For instance, this year, we were forced to drop some 70 schools from the survey because of claims that did not match the reality.

This year has been a bumper harvest for the top B-schools as far as placements go. Many companies had to return empty-handed from the best campuses. Among the 236 B-schools that participated in our survey, a high 47 per cent reported that every graduate had got a job offer—last year it was 38 per cent. The average median annual salary offered was Rs 2,50,000, up 25 per cent (Rs 50,000) over last year. And there’s more good news. Areas like industry interface too see marked improvement.

B-schools across India are ramping up infrastructure, especially technological.Wireless campuses, electronic databases and libraries, laptops for every student...these expensive efficiency tools are becoming common in many private and government-aided autonomous B-schools.Some like BIMTECH in Delhi, Alliance Business Academy in Bangalore and IIMM in Pune are in the process of shifting to fully residential campuses.

Another recent positive is the CII initiative to promote industry interface with B-schools. It has launched a scheme, the CII Industrial Fellowship, under which a faculty member from a partner institute is assigned a research project with industry for a period of three to six months. The academic can get insights into the actual working of the organisation, get data, do research, develop a case study. Already institutes like Christ College, Alliance Business Academy, Mount Carmel Business School have assigned professors to work with organisations like Wipro and Philips. In the agri-business sector too, the agriculture ministry’s initiative of generating agricultural entrepreneurs or agripreneurs—for which Hyderabad’s National Institute of Agricultural Extension Management is a nodal centre—has also shown some positive results. There are already over 150 cases of successful new agripreneurs. Some schools have gone beyond teaching globalisation; they themselves are venturing abroad into new markets. Mumbai’s S.P. Jain Institute and Jamshedpur’s XLRI have opened centres in Dubai. Private universities like the Hyderabad-based ICFAI are planning to enter Sri Lanka, Bangladesh and other South Asian countries. The Manipal group now has campuses in Nepal, Malaysia, Dubai and Muscat. The IIMs are considering opening branches in West and Southeast Asia. mdi Gurgaon, ICFAI, and Mumbai’s Wellingkar Institute are applying for international accreditation. by AACSB (Association of Advanced Collegiate Schools of Business) in the US and EQUIS (European quality norms).

Now the concerns. Our surveys have consistently shown a big gap between industry expectations and B-school delivery (see ‘Ticket in a Bottle’ story on page 54). Many in industry find B-school products too raw. Says Pankaj Mittal, director, Asia Pacific, Delphi Systems: "The freshers’ business process understanding is too low and lacks special skill sets. We have to invest a substantial amount in training them. B-schools need to inundate students with current cases and live projects." One reason for this industry-MBA mismatch could be that over 80 per cent of those who join management institutes in India come fresh from college and have no work experience. In many top global schools, a minimum of three years’ work experience is mandatory for the applicant. Paucity of good faculty is another problem. About 70,000 students graduate every year from 1,000-odd B-schools in the country. Taking a 1:10 teacher-student ratio (the international standard), we need 7,000 teachers. But the current estimate is less than 2,000 management educators. "And many of them," says Dr Pandurangarao, director, ICFAI Business School, "are not properly trained to teach. Very few Indian B-schools are proactive in developing quality faculty." Agrees Dr A.K. Sen Gupta, director of Navi Mumbai’s SIES College of Management Studies, "India produces hardly 150 management doctorates per year," he says. Also, teachers are expected to facilitate the process of learning compared to teaching what they intend to. Teachers are still considered deliverers of knowledge from ivory towers. The emotional bondage between teachers and students is virtually non-existent.And above all, teachers are seldom considered mentors, coaches or counselors."

Curriculum is another concern. A majority of our B-schools still focus on existing customers—industries like fmcg, IT, banking, manufacturing etc—and don’t really think of unserved markets.Only about ten institutes have programmes on rural management and agri-business that can generate job producers instead of job consumers.Not a single institute we surveyed has an elective on growth areas like energy management or non-renewable energy. They are yet to tap underserved areas like healthcare, hospitality, communication, entertainment and small businesses.

"The three vital components of any content and curriculum are quality, relevance and flexibility," says Sen Gupta. "Unfortunately, in many institutes in India, the course content lacks in all the above. Scarcity of adequate good faculty affects quality. Curriculum has often been found to be static for as long as a decade. But the most critical dimension is that the bureaucratic set-up of many B-schools has resulted in institutes devoid of agility to respond to change." One consequence of this is that hardly 20 management institutes in India can be really called integrated B-schools—that is, truly integrated with industry, and not only disseminating existing knowledge but creating new knowledge, skills and practices that can have a far reaching impact on the Indian economy.

Probably the most key concern is the global challenge. The General Agreement on Trade in Service (GATS) regime, which operates under the WTO umbrella, is to begin by 2005—opening up global education markets. While Indian institutes will be free to go abroad and offer services, top foreign universities will also be allowed entry into India. In February, International Business Week wrote: "Schools from the elite University of Chicago to the fast-growing ranks of ‘for-profit’ colleges are also setting up shop overseas.... As China and India develop advanced industrial bases the global demand for post-secondary education could nearly triple over the next two decades."

Currently, about 10,000 Indians go off every year to study in foreign B-schools. With barriers falling, this number is bound to swell. And with the clear possibility of foreign competition coming to India, our top institutes need to bootstrap themselves urgently to world-class level. As Professor J. Philip, director, xime Bangalore, says: "It’s a blurred interconnected borderless world. We have to be in the thick of it."

(The author is director, Cfore, which has done this survey for Outlook)