Once universities were considered as a ‘paradise of scholars’ to be run by faculty, and the nation-state was to fund their operations and protect their autonomy. From the mid-1970s, a view emerged that the collegial system of governance makes universities vulnerable to be captured by academia-dominated interest groups, ignoring the interest of other stakeholders, primarily students, and therefore, the nation-state should steer them. Universities have evolved over the years and now they serve multiple interests. The current view is that universities, which receive government fund, are like any other public-funded service and should be under the command and control of the nation-state. However, they should be granted academic autonomy. With the emergence of private universities, the nation-state has assumed the role of a regulator to protect the interests of various stakeholder groups, primarily students and recipients of services of university degree holders. B-schools are different from universities which teach and research in science or social science subjects. Primary stakeholders of B-schools — faculty, recruiters and students (MBA aspirants) — are market players like those in the input and output markets of business enterprises. Like business enterprises, B-schools are facing unprecedented challenges from increasing social expectations, changing recruiters’ and students’ expectations, and disruptions from more affordable online and for-profit management education offerings. Therefore, B-schools should be run like businesses. Most B-schools adopt dual asymmetric structure — faculty council and board of governors (BoG). The BoG enjoys more power than the faculty council. It acts like the board of directors of a company. Regulators should take cognisance of the environment in which B-schools operate and their internal governance model. They should regulate B-schools using the principles for regulating business enterprises, which operate in a competitive environment. The regulator should not micromanage business schools. For example, like the Securities and Exchange Board of India (Sebi), it should provide broad governance structure and ensure transparency in the operation of companies by mandating disclosure of relevant information that is used by MBA aspirants in taking decisions.
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First Published: Sun, October 13 2019. 21:53 IST