2010

Management
Education in India
An agenda for reform
JIGYASA 2010

ASHISH SHARMA
Institute of Technology, Banaras Hindu University
ashish.magnum@gmail.com
+91-9696186972
10/3/2010
Summary
Today the world economy, especially Indian economy is experiencing an unprecedented
change. New developments in science and technology, media revaluation and
internationalization of education and the ever expanding competitive environment are
revolutionizing the education scene. A paradigm shift has been noticed in the management
education now a days, from ‘national education‘to ‘global education’, from ‘one time
education for a few’ to ‘life long education for all’. These changes make new demands and
pose fresh challenges to the established education systems and practices in the country.
Because of interdependence and integration of world economy in recent years, the Indian
higher education system has a new role and a challenge to provide to the nation and the
world at large, skilled human power at all levels, having breadth of knowledge and
confidence to effectively confront the social and economic realities. It is worth noting that
while India has the second largest system of higher education, next only to USA and
largest in the Asia. After independence necessity of talented management professionals
was felt and this lead to the establishment of IIMB and IIMA, in collaboration with
Harvard Business Schools. After that time to time new business schools were established
based on the same framework. Economic reforms in 1991 lead to the rapid growth of the
industry and thus the demand of qualified managers increased. Although the growth of
business schools has been very high for the past decade, there is still very much demand of
quality business schools. It is always said by general public about the leading business
schools in India- IIMs that they haven’t contributed significantly to the economy. They
have given a new direction to the Indian Corporate Sector and have played a tremendous
role in the industrial development and reforms. They have created study material and
research papers of international standards. In spite of this, even IIM directors realize the
fact that the academic framework should be changed according to Indian scenario and to
utilize our talent for the nation. The economy and the Indian people expect IIMs and other
business schools to enhance their brand image, expand admission capacity for the MBA
programme, become thought leaders and provide means blind education based purely on
merit.
Time to time IIM review committees have been formed to look into this matter
and it has suggested the changes required to improve the standard of education and
according to the changing scenario. In the recent 5 years, Indian economy has seen a
wonderful hike. Our fastest growing economy with its largest skilled manpower is looking
towards IIMs to provide leadership and guidance for maintaining and increasing this rate
for making India a powerful and developed country. The vision of Dr. A. P. J. Abdul
Kalam in his book ‘India 2020’ can be accomplished by proper planning and management.

The Importance of Management

Management is the driving force in the rapidly changing globalised economy and society.
Quantity and quality of highly specialized human resources play a key role in a nation’s
development. Emergence of management as driving factor results in both challenges and
opportunities. In present scenario with the largest youth population of 275Mn, various
natural resources, technical development and the roar of Indian MNCs in the international
market and recession in western economy we have the real potential of being a fully
developed and super power country. All we need is to utilize our capabilities to the best.
For this we need planning and management.

Management and Finance Education in India

Management education in India is currently lead by the institutes IIMs and ISB. As the
economic growth of India is at peak and we have the largest youth power in the world, to
utilize the resources available and to work for making India fully developed super power
we need highly qualified management graduates. Government’s initiative to start new IIMs
is a very rightful act. IIM, Ahmadabad and ISB, Hyderabad are among the top institutes in
the world. But it is also required to pay attention towards uplifting of standard of existing
colleges. In the last 5 year plan (2002-07) a total of 41.765 billion was spent on higher
education (It was the 10.7 % of the total education budget of India). According to the
United Nations Educational, Scientific and cultural Organization (UNESCO), India has the
lowest public expenditure on higher education per student in the world.

Indian business/management schools are broadly classified as:

 Autonomous schools which are affiliated to the ministry of Human Resource
Development and All India Council of Technical Education (AICTE) (under
Ministry of HRD, Government of India) such as the Indian Institute of
Management (IIMs), XLRI, SP Jain, XIM, Fore School, IIFT, etc. to create
professional managers foe the corporate world.

 Management schools and departments in universities come under the preview of

the national university education system. These departments are regulated and
monitored by the UGC. Central universities are wholly funded by UGC, while state
universities are wholly funded by the UGC.

 University-affiliated colleges are also substantially by the processes and rules of the
universities.

 Private universities/institutions which are sponsored by various

societies/trusts/corporate bodies interested in promoting educational venture in the
country are playing an increasing role in management education.

Growth of business schools in India during 1950-2006

Period No. of Business schools added Average annual addition
1950-80(30 years) 118 4
1980-1995(15 years) 304 20
1995-2000(5 years) 322 64
2000-2006(6 years) 1017 169
Issues faced by business/management schools

 Business and management schools in India are facing a diverse set of issues,
including shortage of suitably academically qualified faculty. As of now with
80,000 graduates studying MBA, business schools require a minimum of 8,000
MBA/PhD qualified faculties. However, such members are not available. Apart
from the inadequate number of sanctioned faculty positions, business schools are
forced to rely on visiting faculty who may have the experience but not necessarily
the required academic background. This affects the quality of management as well
as research across schools.
 As the market changes are very rapid, we need to modify and update the curricula.
But most of the colleges are unable to do so because of lack of funds, infrastructure
and willingness.
 Except the top level colleges, research is very much ignored. Relative lack of
innovation in pedagogy creates managers who are more likely to take routine
decisions as risk-averse followers of the beaten track, rather than as risk-takers and
leaders.
 Lack of infrastructure, funds and support from government.
 Ideal management strategies don’t work efficiently in the corrupt environment.
  Political interference
 According to Indian scenario the initial package as obtained by an IIM student is
very good but very less if compared to western countries. This package containing
the 40% weightage of overall ranking considerably lowers the rank of our
prestigious institutes.

Shortcoming of Current System

Although the current system has given a quality and valuable service for nation. It has
achieved a great height in a very short span of time. We need to modify it according to the
new scenario. The major shortcomings of the current system are

 Most of the students prefer to go to foreign after their MBA so their talent is
remains unused for India and is used by Western countries.
 The responsibility for the governance of IIMs is divided between the Government
the Board of the IIMs and the Directors. None of them have been able to play an
effective role in developing strategies and goals for meeting new challenges, and
making IIMs institutions which could rank with the best business schools in the
world.
 Divided responsibility for governance, and lack of clarity of the role of
Government, Board, Chairman and the Directors has meant that none of the key
players have any real accountability for results.
 The leading Management Institutes of India, i.e. IIMs are established in the
collaboration of some foreign countries. So their working methodology is not
optimized for Indian environment.
 Most of the students of IIMs are from urban areas and are convent educated. They
are unaware of the problems faced by the rural population of India.
 The cost of education is also very high (around 10lacs in top colleges).
 Getting admitted into a top management institute like IIM is much tougher as
compared to other countries (for IIMA 600 students compete for each seat)
 The flexibility in course structure and academics needs to be improved
 There are negligible facilities for distance learning and online courses.
  The system is designed mostly for generalized studies.
 There is no specific attention for studying the Indian scenario that may be because
of lack of interest of students.
 Most students prefer to get a job in MNCs rather to start their own business or to
work for country.
 There is a very wide gap in the standard of management institutions. Most of the
colleges are far behind the IIMs. Even international ranking of IIMs differ widely.
 Many students from technical background (IIT) prefer to go to management field,
where their technical skills are not fully utilized. We should develop a framework
particularly for utilizing their technical skills, such as an integrated degree which
includes both B. Tech. and MBA, currently such course is available in IITR.
 More stress is given to degrees and grades than to actual knowledge.
 Theoretical education is preferred over practical education.
 In IIML about 90% students are from engineering stream and about 90% are boys.
It shows that there are not equal opportunities available for everyone.
 IIM directors are very good managers but their leadership skills are not being
utilized.

Suggested Framework

However a large no. of MBA pass out each year, most of them just have the bookish
knowledge and are not up to the required standard for market or to face the practical
challenges. Finance and management reform agenda can usefully be viewed in the context
of ten themes:

1) Expansion and Diversification--of enrolments, participation rates, and number and

types of institutions
2) Fiscal pressure—as measured in low and declining per-student expenditures and as
seen in overcrowding, low-paid (or unpaid) faculty, lack of academic equipment or
libraries, and dilapidated physical plants
3) Markets--the ascendance of market orientations and solutions, and the search for non-
governmental revenue
4) Greater Accountability—on the part of institutions and faculty, and on behalf of
students, employers, and those who pay
5) Greater Quality and Efficiency—more rigor, more relevance, and more learning.
6) Practical—more attention towards practical rather than theoretical.
7) Equality--equal opportunity, no biasing based on financial status, social sector or
gender.
8) Availability—the highly competitive nature of CAT ensures quality but there are many
more eligible candidates who couldn’t get into IIMs.
9) Contribution to economy—how much they contribute to the development of country
10) Leadership—to develop leadership qualities to be utilized for corporate sector

Based on these themes major steps required are

 Bridge the gap between IIMs and other institutions.
 The budget for higher education should be increased immediately to meet the
international standards.
 As Government plans to establish new IIMs, one or more of them may focus
completely on Indian economy, scenario and challenges.
 The idea of Pan-IIM as suggested by IIM review committee should be implemented
 Entrepreneurship should be promoted; students from top institutes must be
motivated towards self-business or a business based on PPP concept. Ex.
Government can support establishment of a toy industry or a mobile industry. It
will also help to challenge the Chinese goods.
 The candidates must be motivated to work in India. They may be bound to work in
India for several years. However equivalent package, facilities and working
environment is a must.
 The qualified faculties should be attracted and invited to provide their services as a
regular member.
 Several IIMs have already launched initiatives that go beyond the private corporate
sector. A recent example is the creation of the Centre for Public Policy at IIMB that
has a long-term program for central and state level officials.
 Online education is the best solution to overcome the barrier of shortage of faculty,
funds and infrastructure. It also provides flexibility and can be accessed by working
professionals also. Mentors should be allotted to each student and some on campus
programs can also be organized if required.
 The requirement of talented management professionals is being felt in every field.
But many of these fields especially government departments are not utilizing these
services. Management institutes must demonstrate how beneficial their services are
to them.
 A large no. of scholarships needs to be provided for the students of poor
background.
 Entrance Examination pattern should be modified time to time so as to promote real
talent rather than the coaching students. And care must be taken that it provides
equal opportunity to all financial classes of Indian society.
 It shall be the accepted principle that ‘no talented person shall be denied access to
higher education opportunities on the grounds of economic and social
backwardness’.
 The top level institutes like ISB and IIMs can earn by export of online education.
 Faculty recruitment should be based on knowledge, experience and talent rather
than degrees.
 There should be enough incentives given to IIM students to spend some time, as a
part of the curriculum, as development intern with small sector, NGOs, service
sectors, defense and other strategic sectors. This will expose them to the challenges
faced by these sectors.
 Establishing Liaison Cell for getting feedback from industries
 Faculty should visit industries and get acquainted with current problems;
 Better contact with alumni to evaluate teaching methodologies and new demands;
 Introducing ‘earn while you learn’ scheme for needy students.
 Government to make initial investments to make institutions globally competitive.
 Funding liberal education by the State and skill oriented education by private
sector.
 Distinction should be made between teaching/research Universities to enhance their
roles.
 Sensitizing the students’ community regarding rising of resources for Universities.
 .Colleges to assess local needs and frame their own syllabi/courses flexibly.
 Introducing a scheme for rewards/punishments to ensure accountability work.
 Standard of education should be increased from primary level only to provide equal
opportunities to all and to generate quality candidates for tertiary education.
 While the Western models of higher education should be suitably adopted, the
education planners/implementers and the institutions should devise and develop
indigenous ones.
 A liberal milieu in the Indian Universities must be reconstructed. Diversity of
opinion and critique of society and its processes need to be encouraged.
 Policies of management education should be designed to strengthen indigenous
research agenda.
 One reform that is urgently needed is the right to information in the institutions
of higher learning. Transparency in the functioning at all levels is required so that
those committing wrong are deterred.
 Policies of our country based on simplicity and sharing of facilities within and
across institutions must be established and encouraged.

Performance parameter to be achieved by March 2011 in current scenario.

IIM A,B,C IIM I, Koz, L New IIMs
proposed
PGP intake(annual) 500 each 250 each 100 each
FP intake(annual) 20 each 10 each 5 each
PGP Ex(annual) 100 each 50 each -
Online/Satellite 2000 each 500 each -
Papers in top 25 10/year each 5/year 1/year each
journals
 Ranking in Top 50 Top 100 Top 100
international
business journals

Benefits of suggested framework

Suggested program is a long term strategy for the optimal utilization of resources and
manpower for the development of the country. Some initial heavy investment is required,
which may be untraditional but when it reaps it will be return the benefits manifolds.

 Utilization of management abilities to the corporate, social and political sector.

 Equal opportunity for all
 Better utilization of resources and infrastructure
 Increased Availability due to online education
 Stop brain drain and utilize our talent for development of India
 Development of entrepreneurship skills leads to generation of employment and
capital
 Specific study, according to current Indian Scenario
 Effective Management can be a strong weapon against corruption
 Social engineering
 Employment generation
 To stop outflow of money to foreign countries
 Reduce dependency on import
 To develop strategy for country rather than vote bank.
 To maintain the balance between all areas of development, defense and other
sectors.

Shortcomings/Difficulties of suggested framework

  As the online education is new to the Indian scenario, it may face some difficulties
in the starting.
 Maintaining the standard of the online education is a great challenge.
 Financial load imposed on government and taxpayers.
 There is a risk of brand dilution.
 The government financing the higher education leads to widen the gap between the
rich and the poor if the sufficient scholarships are not provided.
 The more dependency on government for fund will increase the political
interference
 Accessibility and quality up gradation are inseparable dimensions of higher
education. Over-emphasis on one at the cost of the other would be counter-
productive.
 Shortage of faculty is the greatest challenge. Even IIMs are facing this trouble.
 If candidate are forced to work in India without providing equivalent package and
facilities there is a risk that talented student will prefer to join foreign or private
institutions.

Implementation

Resources required
Funds-A large amount of funding is required to meet the international standard, for which
depending on govt. or increase of fee is not the best choice. After establishment of new
IIMs it may become very much difficult for government. For the Indian scenario we can
look for the support from industries and banks. Students’ projects can be the real industry
projects under guidance of a faculty member and thus can be utilized for raising fund.
Alumnus will be of great help in this matter for the IIMs. The quality study material and
research papers created by IIMs can be used professionally for earning. The estimated
capital expenditure for each PGP/PGDM seat to be in the range 30-40 lacs and for each
PGPEx or doctoral seat to be 35 lacs.
Faculty-Qualified faculty should be provided the package and facilities according to the
international standards. The faculty qualification should not be measured only on basis of
degrees.
Infrastructure -The current infrastructure can be properly utilized by running multiple
shifts. It may seem odd but it is the best option available until infrastructure is developed.
The Govt. should realize that the fund given to these institutes as an investment.
Data-For studying the Indian scenario the accurate and reliable data is required. This can
be provided by National Information Centre.
Skills acquired through management education and their requirement for
development for India

First of all we need to consider what skills are developed through management. The main
skills developed through management education are leadership, entrepreneurship, team
spirit, delegation, problem solving and decision making, exploring market, realizing
market potential, management and personality development.
Skills of the managers can be divided into:
Core Skills(Foundation) Transferable(Marketable) Job-Specific(Specialized)
Sociability Creative thinking Analyzing specific species
or law cases related to
murder, or human resource
policies regarding
harassment,or..
Reading, writing & Analysis & logical thinking Use of proprietary software
numeracy for data analysis, or product
design or research results
or..
Computer literacy Problem-solving Specialized training or
education in a field, such as
engineering, law. You must
have credentials realted to
the specialization
requirement
Self-management Organizing(things, people)
Teamwork aptitude Communication written &
 verbal
Cognition(thinking) Interpersonal rapport

Now we analyze how these qualities can be utilized for the development of the country.
Leadership: In the corporate sectors the IIM MBA holders are leading the way very
successfully, but for India these skills are required in the social and political sector also.
The 1.2 billion population of India needs leaders for the industrial and economical
reformations.
Entrepreneurship: Most of the MBA holders in India prefer to join some MNC instead of
establishing their own business. That’s the much powerful factor that our economy was
shaken by recession in the west. We are dependent on NRIs for most for our foreign
currency reservoir. This dependency should be shifted from services to products.
Establishment of new industries will generate new employment and will also contribute to
the GDP of the country.
Team Spirit: India being the 2nd largest country by population, we must utilize the
benefits of team work. MBA holders can support it a lot. For an example, In India there are
many numbers of small farms where using modern techniques is not much beneficial due
to their small size but if the farmers work together as a team production can be increased
significantly at a much reduced cost.MBA holders can play a significant role in managing
their team and solving disputes and can create their team based on mutual benefits.
Exploring Market: Rapid economic growth and greater population creates very new
fields of business and market for new products. The talent of recognizing these
opportunities is developed at the business schools.
Social Engineering: India displays an ideal example of unity in diversity. Since
independence political parties are using this diversity for generating their vote bank.
The financial and social differences can be eliminated for the benefits of all and to bring
equality by proper schemes and only management persons can create such schemes.
Human Resource: According to World Bank India has scope to provide employment for
all of its population; still we have millions of unemployed persons. The demand and supply
for human resources has been planned very badly in recent years. The ignorance towards
vocational training has created the most of the unemployment.
Co-Ordination: It is well known that there is very little or negligible co-ordination among
various govt. departments. This leads to unplanned actions and wastage of the fund. A very
common example is digging of roads for telephone\pipe lines. Managers should to
appointed to co-ordinate among these departments and to plan the scheme which provides
best utilization of resources and time.
Others: As per the IIMA mission they train students to handle any type of situation.

References

 Wikipedia
 UGC reports
 IIM journals
 Yashpal Committee Report
 Vikalpa role of IIMs
 IIML Brochure
 IIM review committee reports