Business Standard

Mumbai Business School shuts shop within 3 yrs

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Move follows after the institute did not get sufficient students; promoters are now planning to bring in a new school for brand development.

It is a classic case of how brand and marketing gurus have not been able to sustain their own baby. Mumbai Business School, a privately-run

B-school promoted by A Mahendran, managing director, Godrej Consumer Product Limited (GCPL), has shut shop after three years of its operation.

MBS registered itself under Section 25 of the Companies Act as a private entity. It was modelled on the lines of the Indian School of Business, Hyderabad, to provide a one-year full time programme in management.

The school, promoted by Mahendran (who holds over 60 per cent in the venture), and a few of his academic friends in India and abroad, including Jagdish Sheth, leading marketing guru, and Charles H Kellstadt, professor of marketing at Emory University who was also the chairman, academic advisory council at MBS.

“We were not able to generate the operational cashflow and capacity utilisation was below the mark. So we decided to down the shutters,” said an official from the school.

The institutes which was located in Malad, suburban Mumbai, could not sustain itself due to lack of students.

As its last attempt to save itself, the B-school had roped in Bala V Balachandran, founder and honorary dean at The Great Lakes Institute of Management, last year.

The tie up which as supposed to shore up the B-school's profile, also failed.

"People who were supposed to run the B-school failed in their duties. We brought in Bala last year to help us. Balachandran was supposed to play an active role in the institute's functioning. But even he failed," the official added.

Balachandran had earlier told Business Standard that he plans to take over the and convert it into the Great Lakes, Mumbai, campus.

"Mumbai Business School was created as a for-profit organisation, so I was not keenly involved. Now I took it over as a not-for-profit institute. The change of ownership is in approval process. The school could be re-named Great Lakes, Mumbai campus,” he had told Business Standard earlier.

The institute had, according to an official who has quit the B-school, put in around Rs 4 crore as initial investment. The campus was taken on rent. After three batches passed out of the institute, it did not admit new students as it did not received sufficient applications to fill a class size of 30 students.

One of the members of the school said the investors in the MBS plan to stay on and are looking at different models of the business schools. “We are planning to develop it into a brand school or a super speciality B-school now. We are working on a new concept which is getting ready. We have identified a CEO for that who could take a brand school concept forward and specialise in brand equity development,” said an official from MBS.

Crisil research in a study anticipates a shake-out in the higher education space in India on account of declining occupancy levels. The research said that several colleges have not been able to equip students to meet the requirements of corporate India.

According to Ajay Srinivasan, head, Industry Research, Crisil Research, “Low occupancy rates are making it difficult for many lower-rung colleges to sustain operations. As a result, we expect a number of colleges to face closure or change in ownership over the next few years.”

According to Crisil Research, the average occupancy rate declined in 2011-12 to around 67 per cent for engineering colleges and to about 65 per cent for business schools (B-schools).

In October 2011, Pune-based Training and Advanced Studies in Management and Communications Group closed its business school in London due to tighter restrictions on student visas in the UK.

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