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Do we need value-based management education in India?

Kushankur Dey 

institutions have mushroomed in India, but quality remains elusive

education has become a fad in a virtually connected universe. Post 2000, the acclaimed MBA programme has witnessed unprecedented heights in the form of pluralism across academics, industries and think tanks in India. Pluralism in this context talks about the outreach of this programme among a larger section of society. In other way, it is an attempt for inclusion of MBA aspirants in the programme from a larger heterogeneous mass. Necessity of this kind of education has been primarily relied upon derived demand from industries. Eventually, recruitment does address the potential of this programme by considering a pool of supply of the MBA or PGDBA or PGDM or MBM degree-holders. It is believed that a post-graduate degree in basic sciences or in engineering or in medical sciences or even in social sciences does not seem to yield as much in terms of ‘package’ and ‘fast track promotion’ as an MBA degree does. However, it is an opportune time to explore the flip side of education in India. This article seeks to investigate whether the management education is serving a value-based programme in India. Quality is a desired outcome through an MBA programme.

Motivation to this enquiry is unequivocal. While, in India, management institutions have been mushrooming in a fast pace, however, quality imparted by these institutes has become the focus of investigation/critique in academia-industry parlance. Is management education too important to be left to management/B-schools? Is it time for rethinking the MBA programme? Is a less ambitious reform agenda a more reasonable immediate goal for management education in India? Is the regulators’ approval being used as a mere official fig-leaf by fly-by-night educational bigwigs making a fast buck? Critical assessment of ‘quality management education’ by addressing these questions raised would definitely provide some checks and balances on the part of management institutes/universities to upgrade the standard of the programme. In turn, this kind of arrangement would help MBA aspirants to gauge the impact of B-schools and the programme in serving their quality of life. There may be a number of means to achieve this. However, benchmarking the level of an MBA programme through internationally acclaimed institutes/organisations has already been received attention for assessing these designated institutes in a legitimate manner. The role of the regulator to preserve or to enhance quality cannot be wished away. The regulator must be fully aware about the approach of a programme. For instance, All-India India Council for Technical Education (AICTE), one of the regulators of management programmes in India must evaluate the programme run by odd 4,000 B-schools (under the banner of institutes, universities and colleges) with respect to well-accepted yardsticks such as number of courses/credits offered by the programme, quality of teaching through adopted pedagogy, aptitude of learning by participants, quality of interaction between facilitators and participants, nature of jobs opted by participants, diversity of industry-in-campus-participation during the placement season to name a few.

In Rethinking the MBA: Business Education at a Crossroads by Srikant Datar, David A Garvin and Patrick G Cullen (2010), this article attempts to generate some interest to two types of audiences. MBA aspirants would be able make an informed choice prior to jumping into the gizmos and gimmicks of management. Academics in business schools can learn why and how they need to renew their course-curricula periodically or regular intervals, pedagogy and research programmes. Some of the best practices through branding and pricing of the B-schools in India are listed here.

Branding to sustain the product
Brand value of any depends on positioning its product, that is, ‘rigour’ and ‘relevance’ of the imparting programme. Astoundingly, these two words are not very profound in the existing course curricula. In the given context, product is simply the MBA degree or the PGDM diploma based on affiliation of B-schools with institutes/universities. University confers the degree whereas AICTE-regulated institute offers the diploma. However, commonality between diploma and degree is well understood subject to two years’ full-time residential programme. Therefore, a diploma equivalent to a degree is mentioned as an underlying disclosure by the designated institutes. Any text book of marketing talks about a product which can be goods or services/ideas or a bundle of goods and services. MBA degree or diploma embracing the service of imparting education to the enrolled-participants qualifies as a product for the In addition, quality as sufficiency criterion justifies the existence of any product. It also applies to an MBA programme. B-schools should clearly spell out in their admission/placement brochure(s) about features, advantages and benefits that the programme has delivered. A comparative analysis among existing B-schools with respect to this criteria can adequately be analysed by intended participants. Participants are considered as customers. Value-stream between B-schools and participants consists of cash flows (course fee), product flows (quality of programme), and information flow (feedback). This exemplifies a typical supply chain. The course fee decided by any B-school needs to support the pricing decision. Quality of product in terms of course(s) pedagogy, updation of course wares, evaluation pattern like grading, number of components in grading, application of concepts taught, and feedback about the course(s) by participants should not be taken for granted. Feedback is very important for an institute to take the next step for improving teaching and learning ambience, course pedagogy and faculty development programme. Barring a few B-schools, others are emphasising to maximise their revenues through additional increases in the enrolment programmes year after year. The regulator should keep a vigil like a ‘watch dog’ on the programme and essentially produce some notes after the SWOT analysis of the programme and the B-school.

Brand-building is an important aspect for sustaining any product. Product life cycle comes to the forefront. In a typical B-school, branding is done by organising conclaves/annual fest, sports etc and some formal communication with print media periodically. To put it simply, advertising takes care of B-schools’ promotion to a great extent. Behind the paraphernalia of branding, a B-school should mention the list of faculties and some literature on their experiences in the admission brochure. In any product, core (brand kernel) is very important. It shows the consistency and the uniformity of a brand. For example, good infrastructure, computer facility, scenic beauty in and around the campus — does not enhance the excellence of the programme. Rather it is the faculty strength and contribution of staff from all departments.

Thus, the desire to take an admission in an MBA programme can be derived from students. The demand from aspirants will create its own supply (expansion of courses/programmes/B-schools). Acid test about the viability and feasibility of the programme needs to be extensively carried by the designated B-schools prior to the launch of any fancy course for that matter. In marketing, it is the pull strategy implying that participants being customers need to choose and select their desired institutes as marketers. Since MBA programmes are operating in buyers or customers’ markets, demand-mapping is very important in spite of selling a programme being a product below its original worth or market value. Over and above, an MBA programme needs to carry its brand through reflection of the programme (rendezvous), relations with macro environment, personality of the B-school, self-projection, culture through artifacts such as logo or emblem etc. As a result, brand recognition of the programme would contribute to brand equity in terms of frequency of an aspirant’s recall and sales of admission brochure or any intellectual (copyright) materials like Harvard Business Publishing house.

Pricing to justify the product
Education is regarded as a service, which is priceless in its figurative meaning. It performs its role best by moulding the individual’s behaviour. However, some costs are always attached to provide this. Cost and price are two different sides of the same coin. Costs in the form of direct and indirect are incurred by the B-school while delivering the programme. On the other hand, at what price these B-schools should sell their programmes as the product augurs for pricing. It could be mark-up or cost plus pricing. Therefore, price as a reward recovers the cost. Margin is extra over cost which is otherwise realised to add into B-schools’ balance sheets as retained earnings or surplus. This can either be distributed as performance-linked incentives (dividend or stock option or rights etc) among employees including faculties and staffs according to the board of directors’ decision. In finance language, there is always a conflict between the representative of a B-school (owner) and its employees that is popularly known as agency problem. To motivate the employees for alignment with B-schools’ performance goal and mission, some costs are to be borne by owners of B-schools (unlike the Indian Institues of Management or the Indian Institutes of Technology). It is agency cost. For this, salary, incentive scheme, professional development fund, faculty development fund need to be structured and implemented effectively. Quite logically, pricing of the programme has become important to support the organic internal structures of a B-school.

Ensuring the satisfaction of its internal structure, B-school has to sketch pricing formulae for its customers, who are students or participants in the programme. How does one B-school go about pricing of its product? Is it mark-up or cost-plus pricing? Or else, is it predatory pricing? In India, relatively better MBA from reputed institutes requires at least Rs 8,00,000-9,00,000 course fee for two years. Notwithstanding this, participants have to bear hostel, food charges and other incidentals on their own. Therefore, an average B-school charges Rs 11,00,000-12,00,000 for the course. Many B-schools are cogitating on whether they should increase the number of seats by reducing some fraction of course fee (implicit costs may be more) or open up some additional programmes. It always tinkers a band of B-schools to count on their return-on-investment resulting in producing more ‘teaching shops’ in the country. Immediacy and adequacy of pricing strategy cannot be wished away while striving to make the programme effective. B-schools should work on their revenue models so effectively that their existence will become sustainable. Diversification is a strategy to augment the revenue stream. However, too many programmes definitely destroy the beauty of the flagship programme. It is ultimately the quality that attracts premium prices.

Preaching for the best practices
Those 60s are gone when Harvard or MIT Sloan School of Management or Wharton sown the seeds of management in the Indian soil. Now, just one click in the largest search engine, Google, brings the entire universe than meets the eye. Despite the availability of cheap technology, quality of human resources is still priceless. ‘Knowing, doing and being’ — these must be programme learning outcomes of any management education.

Rethinking the MBA has identified eight imperatives for reforming existing management programmes: gaining a global perspective, honing integration skills, developing leadership skills, recognising organisational realities and implementing effectively, acting creatively and innovatively, thinking critically and communicating clearly, understanding the roles, responsibilities and purpose of businesses; and lastly, understanding limits of models and markets. It is evident from empirical research that the Ivy League schools seem not to have done any genuine introspection either: even after the latest financial turmoil, most of these Ivy League schools have re-affirmed their faith in extra curricula, pedagogy, strategies for admission, job placement and faculty recruitment.

Nothing much seems to have changed. Student engagement in curricular activities comes only second, after hunting for ‘package-jobs’. The grip of those rooting for the status quo, among the faculty, continues to thwart any fundamental redesign of the MBA. A ‘you scratch my back, I will scratch yours’ attitude is a consequence of vindication and dominates the old as well as the revamped curricula. Do whatever, as long as one’s own course or pedagogy can be kept as it is. Another concern is about ‘peer learning’ and ‘outside-the-class learning’ being perceived by students as more significant than classroom learning. Worse, the curriculum changes being introduced seem to support this view: ‘Exchange programmes’, ‘immersion’ trips to foreign shores and outbound programmes outsourced to others.

Yale University’s School of Management looks like an exception. It is trying to revamp the entire curriculum by focusing on how to serve various stakeholders of a business including shareholders, employees, customers, suppliers and the society. There are no more courses titled ‘marketing’, ‘finance’ etc. These are more vulnerable to criticisms from society today. These are expected to fend for raising resources. Unlike long-established disciplines in physical and social sciences, academics in professional education like management are not yet seen as ‘rock stars’ amongst researchers, and are still fighting for the place under the sun. Some of the management schools such as Chicago Booth and Harvard are harping on economies of scale of large class sizes to fund their activities. Introducing any change in such programmes is a logistical nightmare. Something has to give in. In Chicago, both students and faculties enjoy a ‘free market’, with very little compulsory components in the curriculum; Harvard has a regimented first year and case pedagogy, never mind the heterogeneity amongst students. Standford prefers compulsory courses at three different levels to cater to students with different levels of prior learning and experience. This avoids the wastage of time of the students in their first year. However, it raises the question whether the ‘core’ requirements of an MBA is merely a credit-quota requirement. After all, European Business Schools like INSEAD, France have been offering equally effective 10-month MBA programmes. It is a well-known secret, at least among India’s management schools, that the second-year is a virtual washout as far as classroom learning is concerned. In the US, they call it ‘networking’, ‘internships’, ‘interviewing got jobs’, ‘global immersions’ etc.

There are some good and bad practices the world over in management education. India’s management education needs an Indian management thought because of its diversity, profound cultural base, collective thinking and possession of self-respect. Unlike business, it seems better if India’s management education has only one stakeholder to be served: The student or the pupil or the disciple whatever the form may be. But core remains unchanged. Are B-schools ready for it?


 

Some of the portion in this article is adapted from Rethinking the MBA by Srikant Datar, D A Garvin and P C Cullen (2010)

First Published: Sat, June 02 2012. 02:41 IST
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