THE B-SCHOOL BOOM IN INDIA: KEY ISSUES AND CHALLENGES 

SULTAN REHMAN SHERIEF
Professor, Magnus School of Business, Chennai.
E-Mail:rehman30@yahoo.com
   AND
   S.TAMEEM SHARIEF
Lecturer and Research Supervisor, PG and Research Department of Commerce, The New College, Chennai.
E-mail: irfana_sharief@hotmail.com 

I. INTRODUCTION
Business education has its origins in the late 19th century in the United States. Currently, 250,000 plus undergraduate degrees, and 100,000 plus graduate degrees in business are awarded in the US every year by more than 1,200 accredited colleges and universities. In recent years, the US has seen a 10% annual growth in the non-degree executive education programs, with revenues exceeding $3 billion (Pfeffer and Fong, 2002: 78). Similar trends are seen worldwide - business education has spread rapidly in Europe, Asia, and Latin America. Many of these schools are at least partially based on the US model. The growth of business education has gone hand-in-hand with numerous innovations in pedagogical models, course content and curricula, the role of research and the relationship with government and industry.

However, the rapid growth and proliferation of business schools, has also led to the emergence of some schools having dubious quality – and business education has come under scrutiny. Even well run business schools are not exempt from this scrutiny. As organizations look for more areas of efficiency, the high salaries paid to graduates from elite schools have led both academics and practitioners to re-evaluate the benefits of business education. Pfeffer & Fong (2002), in their controversial paper "The End of Business Schools? Less Success Than Meets the Eye," contended that the graduates with business education are no more successful than the leaders without the degree, for success is a function of what a person can do. Similar issues were raised in a recent paper from the consulting company Booz, Allen and Hamilton that derided "cookie-cutter" MBA programs that were producing look alike MBA's and not meeting businesses needs (Doria, Rozanski, and Cohen, 2003).

Henry Mintzberg, a professor at Canada’s McGill University argues on this issue, in his book “Managers Not MBAs”. He complains that the conventional MBA programs train the wrong people in the wrong ways with the wrong consequences. He points that such programs ignore the fact that management is a craft, requiring zest and intuition, rather than merely an ability to analyze data and invent strategies. He then jovially points out that the list of America’s most admired business leaders -Warren Buffett, Michael Dell, Bill Gates, Jack Welch, Oprah Winfrey, contains not a single MBA.

 
The goal of this article is to assess the quality of contemporary business education and to identify opportunities for further enhancement of the quality. Indian business schools are an appropriate context for our study because of three factors. First, outside of the US, India now trains largest number of MBAs with about 75,000 degrees annually. (Annual Report, 2005-06) Second, the Indian government has liberalized the business education market over the 1990s, resulting in a rapid growth of business schools. Third, Indian business schools have sought to replicate the US-based organizational, pedagogical, curricula, industry-interface, and academic research models, but are struggling to introduce several adaptations because of the differences in the work culture system. Therefore, it would be fruitful to investigate the challenges for enhancing the quality of business education in India.

 
In the limelight of the products coming out of Indian Business Schools, the authors felt it was worthy to examine what the challenges are, which Indian Business Schools face today. The pressing issues include:
(i) Globalization of Business Education
(ii) Market-Oriented Strategic Focus and Skills
(iii) Staffing strategies
(iv) Behavioral and Societal Skills
(v) Curriculum Design Strategies
(vi) Information and Communication Technology
(vii) Funding Models
(viii) Governance and Strategic Choices
(ix) Brand Building

II. QUALITY OF BUSINESS EDUCATION IN INDIA
Every year, India needs around 1.3 lakh MBAs-2,000 as CEOs and the rest at various other levels. However, Merit Trac, a skills assessment company, recently concluded that 77 per cent of the B-school graduates are “unemployable”. Testing 790 B-School graduates in six cities, it stated that out of the 1257 AICTE recognized B-schools in India, only 132 have been rated as “average or better” by the All India Management Association(AIMA).On an average, these B-schools produce 20,000 graduates every year who are not up to the mark. According to K.Ramkumar, the HR Head of ICICI Bank, “We believe that B-schools are not ready for industry. They don’t teach the skills the market requires. Teaching general management courses is just not enough. In many cases, we have told the institutes to find opportunities of better education and we are ready to fund them.”(Pathak, 2007)
The most important challenge for business education in India centers on the fact that the high quality education is limited to the top tier schools. The number of students graduating from these schools is miniscule compared to needs of the country. The fact that there is such a difference between the top tier and next level leads to numerous problems that we will discuss below. It must, however, be noted that the second tier of business schools, especially the ones that have emerged over the last two decades, have also created several pockets of excellence, which are of high quality.

(i) Globalization of Business Education
As global competition sets in, students and employers look for a business education with a solid international dimension. India too must internationalize its business education system. There are 3 models worthy of mention here:
• The import model of internationalization aims at attracting faculty, staff and students from around the world to the school’s campus;
• The export model aims at sending abroad faculty and students, to expose them to other countries and cultures enriching their knowledge and experience;
• The most developed approach is the network model, which seeks to create a multiple-site institution with full fledged campuses located in different regions of the world. In this model, knowledge and learning gathered in each location enrich the entire network, through the movement of people and ideas between the school’s campuses. Also faculties have the resources to create new insights and knowledge by welding together the localized learning and experiences in each location. Indian business schools must aim for the network model approach.
But it’s true that some schools require to be local to serve the local market and some could truly go global. Still the so called local school should be able to combine some elements of the import and export models, lest they become irrelevant in an increasingly connected world. (Jacob & Huui, 2005)

(ii) Market-Oriented Strategic Focus and Skills
In the absence of a market-oriented focus, it may become a frustrating experience for both learners and knowledge providers because they fail to see the relevance between what is being taught and what the job market requires. With the increase in globalization trend it has become necessary for graduates to acquire the necessary skills such as technical, analytical, communication, multi-disciplinary and inter disciplinary skill, knowledge of global issues and personal qualities in order to be able to survive in the twenty first century business world. The strategies of business education should be developed along this line by concentrating on required skill development besides academic teaching.

(iii) Staffing Strategies
Shortage of highly qualified faculty is a very big problem in India. A demand for qualified faculty went up as the demand for business education grew steadily. But the supply went down. The reasons can be attributed to the fact that a high proportion of trained faculty either choose to serve abroad in foreign universities or choose careers in industry compared to the academic careers at home, since the offer packages are higher, and the risk of failing to achieve promotion is lower. One solution here is to hire qualified practitioners /managers. And, if doctoral studies look indispensable, a specifically designed doctoral program in business administration can be proposed for these industry professionals. Schools which are privileged to have such faculty with significant business/managerial experience would have an edge over the regular, academic, research based faculty seen in business schools.
The academic staff must be able to design and deliver the subjects in accordance with the real conditions in the business environment. Business schools should provide opportunities and encourage the academic staff to work on industrial assignments during sabbaticals or educational leaves and to update their skills on the current business trend. Business schools should also frequently invite industrial personnel for discussions in order to find out the expectations of the market whereby they can respond to industry’s needs.

(iv) Behavioral and Societal Skills
Employers and alumni are increasingly demanding softer skills which include the behavioral and societal skills.
• Behavioral skills refer to the ability to work with others, to communicate effectively, to display multicultural awareness, and to exhibit some entrepreneurial and leadership qualities. These have to be incorporated into the business school curriculum.
• Societal skills include the ability to make ethical business decisions, and which take into account corporate social responsibility and sustainable development. The inclusion of societal skills seems to be very much needed.
The result would be that the future professionals could be sensitized toward unethical and socially irresponsible business decisions, rather than radically alter people’s behavior.

(v) Curriculum Design Strategies
Designing a curriculum to incorporate the academic element and be able to provide the soft skills required by students at the same time is not an easy task. The following suggestions may be kept in mind while designing curriculums-
• The curriculum should provide a choice of both major and minor subjects so that students can focus in depth for the major, and still be able to have some multidisciplinary training in the minor.
• The curriculum can offer more electives which are directed towards international issues to expose students to the global business world.
• The curriculum development committee can include industrial personnel who will be able to provide a better insight into the current needs of the market.
• The curriculum should also include more case studies and introduce students to business tools and techniques so as to simulate the real life problem environment and develop the skills and approaches to solve business problems.

(vi) Information and Communication Technology
Technology is part of the solution to help evolve the traditional educational model of direct student –teacher interaction within the walls of a single physical classroom. Video conferencing, taking online courses (at student’s pace), online learning communities connecting students around the world (to share learning experiences) offer different choices which can complement the traditional classroom model. Successful integration of Information and Communication Technology into the system can help to compensate for limited faculty resources, enhance communications between students and alumni around the world, respond to the need of companies and individuals for tailor- made courses.

(vii) Funding Models
In the context of the government reducing the present support to higher educational institutions, the ability to raise funds is a major challenge for Indian business schools. The culture of philanthropic donations to educational institutions is unheard of here. But this would have to be stimulated by educating potential donors about the importance of financial support, and luring them to the factor of tax deductibility of the donations. The business schools would have to commit significant management and faculty time to foster the relationships that will ensure gifts from alumni and corporate bodies.

(viii) Governance and Strategic Choices
Good governance would enable the school to identify what its strategic choices should be, especially to differentiate itself from other schools in the market. The presence of alumni and potential corporate sponsors on the board and/or one of its key committees would provide the required scrutiny and comfort level. Also it can benefit from the experienced business people/administrators in improving their management structure.
Schools should choose between remaining a primarily research-oriented academic institution, or a teaching institution; local or global one etc. The key factor here is the chosen strategy must align well with the optimization of the resources at hand. Then the road to building one’s own identity or brand name is clearer.

(ix) Brand Building
Another challenge for Indian business schools is to go beyond delivering a degree and offer a life changing experience in their portals. For a business school, the brand is partly supported by the school’s reputation of faculty, programs and the visibility and success of its alumni. As the market gets crowded and competition stiffens, schools with a strong brand only will attract and retain the best students, faculty and corporate sponsors within their targeted market segment. And here’s when Accreditations by Management bodies and Affiliations with the Top Business Schools in other countries matters. If the above challenges are met successfully, then the Indian business schools would be able to differentiate themselves from the vast crowd of business education providers.

III. DISCUSSION AND CONCLUSION
The concept of quality business education will be defined differently in different cultures. Indian culture is characterized by high power distance and consequently high quality may denote elitism, reflecting pre-eminent standing among peers, as ascribed by public beliefs, and reinforced by cultural media, rewards and rankings (Gupta, Hanges & Dorfman, 2002). On the other hand, in low power distance cultures, excellence could reflect action orientation, and be more a symbol of accomplishment, indicating the core mission and strategic commitment of the business school to all-round quality. The concept of quality as defined by low power distance cultures is what is useful to compete in the current global economy where success needs action orientation and team work. This suggests, that Indian business schools might need to change their culture and adapt to a new world economy by viewing quality more in terms of achievements than a reputation. Failure to do so will result in the top tier schools becoming increasingly elitist till they lose touch with the needs of Indian businesses.
We recommend the following as a way to further enhance business education in India:
• It is essential that there should be reliable and widely accepted standards of accreditation of business schools in India.
• Top tier business schools have a responsibility to share their knowledge and skills with schools that might not have the same standards. This will not only raise standards, but will also allow their own graduates to be more effective in the workplace.
• Executives need to be more concerned about the actual quality of business graduates they hire rather than be carried away by reputations.
• Ultimately, it is up to the students to decide whether they are in the business schools just for passive learning, or if they are also ready to take the action challenge of forcing changes in the mental attitudes of the administrators in matters that are critical for sustaining the reputation of their institutions, and preserving the life-long premiums to their learning.
There are reasons to be hopeful that business education in India will improve and be considered excellent globally. Significant improvements in the quality of business programs have occurred since liberalization in India. The existence of pockets of quality is evidence that it is possible to get high quality education in India. These schools can act as role models for others. Further, the emergence of private niche players based on market needs, their innovativeness and success in global and niche markets, points to the continued vibrancy of the Indian economy. The effort to reach out globally will also play an important role in exchanging institutional learning and in broadening the perspectives of the faculty and the students and result in the improvement of business education in India.

REFERENCES
1. Annual Report (2005-2006), Department of Higher Education in India.
2. Doria J., Rozanski H., and Cohen E. (2003). "What Business Needs from Business Schools", retrieved from www.strategy-business.com , Fall.
3. Gupta, V., Hanges, P. J., & Dorfman, P. (2002). Cultural clusters: methodology and findings. Journal of World Business, 37(1): 11-15.
4. Jacob and Huui (2005). “Malaysian Business School Boom: Boon or Bane?” retrieved from www.ssrn.com, Jan 9.
5. Pathak K., (2007), Business Standard, March 10/11: 1.
6. Pfeffer J. & Fong C. (2002), "The End of Business Schools? Less Success Than Meets the Eye," Academy of Management Learning and Education, 1(1): 78-95.