The business of B-schools

India's management schools need better managements

India has over 2,000 business schools — perhaps more than any other country. They churn out hundreds of thousands of management graduates every year. Has that made much of a difference to the way things are managed? How good is the quality of the talent being created, and is there adequate demand for it? While graduates from top business schools are lapped up by companies in India and abroad, a vast majority of them struggle to find a job. It is a clear indication that the quality of education is abysmal in the lower-rung business schools. The Business Standard Best Business School Survey 2010, published last week along with the September issue of Indian Management, shows that there is a precipitous decline in quality of management training as one moves down the list of B-schools. Look at some of the numbers. In the top category, 85 per cent of the faculty members are PhDs; in the bottom category, they form just 23 per cent of the faculty. The student-faculty ratio at the top is six; at the bottom it falls to 11. While faculty at an average top-category business school had combined publications of 71 papers and articles last year, the comparable figure for a business school at the bottom of the pyramid was a lowly six. This shows up in the packages on offer. The average salary amongst the top schools was Rs 11.9 lakh a year; the average at the bottom was Rs 2 lakh — a sixth. The reasons for this are not hard to seek. Most of the second-rung business schools have come up in the last few years. Students now look at the private sector and not the government for jobs, hence the proliferation in business schools. An MBA degree is the closest one can get to job security these days. At the same time, there are no entry barriers in the field. Worldwide, business schools make huge investments in their infrastructure. A bigger challenge is to get hold of a good faculty. But this does not deter Indian entrepreneurs from setting up business schools in every nook and cranny of India. The time has come for the government and the corporate sector to prescribe and implement academic and institutional norms for business schools.

Any manager of human resources in a company will tell you that recruitment from business schools is not easy. Apart from the handful at the top, there isn’t much information available about others. The task is no simpler for an aspiring MBA. How does she compare and contrast two schools? There is any number of surveys in the market every year. But these are all perception surveys, not an analysis of facts and figures. They also assume that the respondents are fully aware of all the aspects of all business schools, which might not always be true. Most important, these rank only the top business schools, and leave aside the bulk at the bottom. The Business Standard survey, in contrast, is based on facts. Only business schools approved by the All India Council for Technical Education and that have seen two batches of students placed in jobs are surveyed. They are assessed on five parameters: intellectual capital, admissions and placements, infrastructure, industry interface and governance. The weight to each is assigned by experts. The data are collected and cross-checked by IMRB. Any business school that shows a sharp variation over the previous year is visited by an IMRB representative. As many as 255 business schools have been ranked in the latest survey. The upshot of the survey is that India’s management schools need better management!