B-schools' development programme to take a hit

It’s not only companies that are nervous about growth. B-schools are also keeping their fingers crossed with revenues from management development programmes (MDPs) expected to slow during the next quarters.

On an average, MDPs form around 35 per cent of revenue stream for B-schools. With companies tightening their purse strings, B-schools could see a direct impact on their revenue stream.

Deepak Chandra, associate dean, Centre for Executive Education, Indian School of Business (ISB), Hyderabad, said companies are cautious at this stage. The MDPs so far have not seen any decline in numbers because the contracts were firmed up last year. “But with the current financial situation, plans for the next quarters could get affected. We will grow but not at the same rate,” he said.

MDPs form 30 per cent of ISB’s revenues, which grew 25 per cent over the last year.

“If the GDP growth is expected to slow, it will certainly affect the other sectors of the economy,” added Chandra.

Indian Institute of Management, Calcutta said the short-duration programmes, which are held for three-days, could see a decline in numbers. The institute charges between Rs 20,000 and 25,000 per head for the programme.

“In these hours of crisis, people whom companies want to retain are sent for such training. Although our long-duration programmes have not been affected, we could see fewer enrolments for the short-duration programmes in the fourth quarter of the year,” said professor Ashok Banerjee, MDP chairperson, IIM Calcutta.

IIM-Calcutta runs long-term programme over satellite and they vary from six month to a year. The institute charges between Rs 1.7 lakh and Rs 2 lakh for the programme per head.

Companies confirm that they are cutting down spending on the training programmes.

Prakash Bhide, president, corporate human resources, JK Organisation (eastern zone), said “Our spending on the training programmes will be more focused and specific now. We will focus on short-term results and returns instead of the long term. We, however, believe that we should prepare ourselves for growth in these challenging times so that we are ready to move quickly when the upturn starts.”

In July this year, JK Organisation had set aside Rs 4 crore towards corporate training. The company however, is planning to cut the allocation.

Sarat Chandran, HR consultant for Rio Tinto, a multinational mining company, said all companies are going to prioritise and do the essential things. “The same will happen to corporate training where they will cut the frills and concentrate on short-term goals,” he said.

Industry experts said all the sectors that are hit by the current financial meltdown are cutting down on executive education. This includes companies in pharma, IT, aviation and consumer goods.