The B-pack

grows up

The b-schools  are on the growth path with more and more schools from different parts of the country showing  that they are serious about the business and given a chance they could even better the best.

A picture-postcard mountain with lush green sides topped by a permanent crown of white cloud as the backdrop is contrasted by a vast 200 acre campus with well-manicured lawns, dotted with a number of brand-new buildings where 120 students of management are taking their classes in a classroom bristling with multimedia gizmos. The scene is repeated almost mirror like some 25 km away along the Western Ghats in Coimbatore. The two business school campuses of Amrita School of Management and Karunya School of Management respectively symbolise the new generation of business schools in India.

Though still small in number, perhaps 100 in all, these schools could easily meet any international standard of quality in terms of infrastructure, campus size, number of classrooms, use of high technology and multimedia in classroom teaching and library, and hostel facilities for all. These schools, all set up in the 1990s, may have made a good beginning in a world dominated by the iims and other traditional schools of 2­4 decades of vintage and a consistent and impressive track record, but it will be a while before their numbers swell. The reason: serious faculty shortage in numbers and also quality, poor quality of student inputs, and finally, lack of placements, the three most important ingredients that could make a good school a great one. What's worse, while the iims and other top-notch schools could get by owing to their brand positioning, locational advantage, and above all, impeccable student pedigree (most of them engineers acquired after a rigorous filtering process) and impressive array of faculty, most with good PhDs, these newcomers are quite hamstrung for these very reasons. But they seem to be coping, which is good news.

 LEADERSHIP SHORTAGE

 While the post-1990s schools are on the maturity path, the big ones, at least those belonging to the government system, have been placed in an embarrassing situation with three of the four older iims ­ iimA, iimB, and iimC ­ and Nitie not having permanent directors after the recent incumbents retired. Even though it is "business as usual" on the campuses, with acting directors taking up the mantle seamlessly from the previous directors, failure in succession planning would hardly go well with the teaching mandate or leadership profile of these schools. The trouble arose after the government dispensed with the usual search committee system and replaced it with direct appointments to the post following a similar pattern across the public sector and top government appointments. S.P. Jain, a school outside the government system in our top ranks, is also passing through a similar problem after its last director A.K. Sengupta resigned to join sies college of management.

 QUALITY PARAMETERS MET

 Business India, continuing its annual survey of B-schools for the third year in a row, discovered that there has been a positive upturn in all four measures of quality -- brand value, intellectual capital, infrastructure, and growth. The good schools have been adding PhDs to their faculty numbers. All B-schools are also investing heavily in Internet connectivity -- taking it to even student hostels, building in-campus hostels, improving their pedagogy, tying up with international institutions for faculty and courses, investing in infrastructure for conducting management development and training programmes, sending more of their faculty for continuing education or PhD programmes, writing more books, and publishing more research papers. Even in terms of brand positioning through innovative marketing and image management, the schools are getting serious.

 THE TOP TEN

 IIM Ahmedabad reigns supreme in our ranking, followed by iim Lucknow, which despite its locational disadvantage and relatively later vintage, remains ahead of its other peers. iim Bangalore follows after a year of good all-round growth. iim Kolkata (iimC) takes fourth place (going chiefly by last year's scores and data collected from other available sources as the school did not want to participate in our listing).

 In our Top Ten, Mumbai-based technology heavyweight Nitie moves up two notches from last year, surpassing mdi and xlri, based on its superior intellectual capital and brand value/market positioning scores. xlri trades places with mdi because of marginal changes in scores, and both ximb and Narsee Monjee retain their positions. iit Delhi moves into the next 10, a list that has all the best performers who are quite close to elbowing themselves into the Top Ten. We deliberately decided not to give the scores or percentiles, so as to keep the excitement of the listing alive rather than nitpick on marginal differences in scores. We have, however, introduced extensive differentiation through the system of clustering that groups almost-equally-performing schools within a narrow band. This system has been followed throughout our listing of B-schools right through category C.

 Business India did the 2002 survey along with Mumbai-based research agency MaRs Pvt Ltd. This year Business India is also planning a comprehensive directory of all business schools of the country with detailed profiles of each of the schools participating in the current survey and an alphabetical listing with details of all other schools whose details we have been able to obtain from various available information sources. We intend to make the directory a single largest source of information and profiling of all the B-schools of the country.

As we did in the past two years, in this year's survey of B-schools, we used empirical scores to measure performance based on the responses to the questionnaire we sent to around 700 schools. The four areas chosen for assessment were brand value and market positioning, which included placement performance; intellectual capital; infrastructure; and growth measured under 10 dimensions.

 LOW COST WORLD CLASS

 What do Indian B-schools have to offer? It should impress many who are fond of referring to Western benchmarks that student­faculty ratios are highly favourable in India, which also speaks volumes about the almost dwarflike size of the industry. For instance iimA, with a faculty of 82, admitted 180 students, whereas Wharton, with 190 staff, took 1,500 on its rolls for its full-time postgraduate management programme. This also signifies room for tremendous growth. Our survey shows that the top schools reported a 2:1 student­faculty ratio as against 10:1 considered normal, the industry average however being 5:1. Even in terms of expenses, the Indian mba costs a fraction of one in the West. While an mba at a top-ranking B-school in India may cost Rs2 lakh or $5,000, it would cost four times the amount to get into even a B-category school in the West. "Absolute low cost and equally contemporary character of mba is our strength," Jagdeep Chhokar, dean and director in charge of iimA, points out.

 If costs are favourable, academic ambience equal, and the student­faculty ratio extremely favourable, then the crème de la crème of Indian B-schools should be attracting hoards of foreign students, which is still not happening. Perhaps, despite the emerging maturity of a significant section of the schools and the optimism of the traditional heavyweights, the Indian management education industry may need to learn a few lessons in running its business from the West. Fortunately, it need not look far as the working of Hyderabad-based Indian School of Business (isb), backed by an impressive array of top business schools led by Kellogg, may offer some clues.

 With or without western business models to worry about, growth-oriented schools, most of which do not have the luxury of governmental grants, are investing heavily in management development, executive mba, and even fellowship programmes of their own, mainly with a view to developing a dependable fund flow stream. Almost half of those surveyed were running upwards of six mdps, with 11 schools offering more than 50 mdps. iimL, for instance, has plans to set up an executive management campus near Delhi mainly to accommodate its fast-growing mdp business.

 MDP GAP WIDENING

 But despite such optimism, a genuine worry for B-school bosses is that the gap between the good schools and the rest is widening. How wide the gap is and how it is impacting on the overall quality of B-school education is becoming increasingly difficult to assess, what with many in the smaller category choosing to opt out of media surveys (see p91: ranking fatigue). For instance, from around 370 schools that responded to our first survey, the number has come down to 182. The bulk of those that opted out are smaller schools, where the problems of faculty availability, quality of students, and placement performance remain serious.

 PLACEMENT BLUES  

The main concern of B-schools is the placement scene and a cross-section of directors Business India spoke to on their campuses all over the country expressed consternation at the fall in job offers, both international and Indian, and also the overall reduction in salary offered. "There's no denying that the job scene is bad, but the schools are doing their best to cope," says Panduranga Rao, director of icfai business schools, Hyderabad. He should know; Rao has had to place as many as 800 students from all his 10 campuses, the largest pool under any B-school banner. But schools like Institute of Rural Management, Anand (Irma) in the social development sector feels comfortable as the segment it supplies is always ready to take on the boys. "It also helps that the institute insists that students take up jobs in the ngo sector even if it pays a much smaller compensation," says Pratap Reddy, who recently took over as director.

 Even the iims, which are not normally bothered by placement blues, are worrying and are sending their faculty to Indian companies and even foreign destinations to press for placement offers. All the iims have done the rounds of top companies in India and a few others in the Asian region, mainly Singapore and Malaysia. If iims are on a job-hunt, can the rest in the pack be far behind? "I know that despite our unbroken track record of placing all our students on the same day, we need to expand our pool of recruiters to be safe," admits N. Jayasankaran, director of Bharathidasan Institute of Management, promoted by bhel, at Trichy.

 GMAT or CTS?

 The quality of student inputs is a continuing concern. This is an area where aicte, under the dynamic leadership of iit Chennai ex-director R. Natarajan, has been fairly active. Many in the industry would concede that, despite the best B-school processes, the final results in terms of placement salaries comes from the original capabilities of the students, which are best ensured by the selection process the schools adopt.

 The main bugbear is the selection procedure, which can at best be described as chaotic. There were more than a dozen tests to choose and almost Rs10,000 to be spent purely on purchase of forms of different colleges, not to speak of the tension of hopping between different cities to give the tests and later attend the group discussions. Apart from the national cat of the iims, the mat of the All-India Management Association (AIMA), and the xmat of XLRI, there are the common entrance tests (CETs) of various state governments and jmet of the iits. "The nightmare can end only when a single test like gmat is administered," says Manesh L. Shrikant, dean of S.P. Jain Institute. As a halfway measure aicte has declared five tests, including the newly started aimat of the Association of Indian Management Schools (AIMS) as national tests.

 Even though XLRI, IIMC, and IIMK have experimented with satellite-based remote testing with some degree of success, the future management entrance test will be in cyberspace, according to Chirag Unadkat, director of Wesra.com, who developed a national management test (NMAT) for Narsee Monjee Mumbai entirely on the Web. This test can be taken any time of the year from a cybercafé or any multimedia centre and the results are made known to the candidate instantly. "We introduced the test last year and this year expanded it to nine centres and even corporates have started using it," says N.M. Kondap, director of Narsee Monjee.

 FACULTY CHALLENGE

Input woes apart, faculty and quality of faculty are another question. Even though all the big schools are comfortable with a faculty strength exceeding 40 and their numbers are growing, and the proportion of schools below the aicte norm (full-time faculty of seven for a batch of 60) has fallen from 15.7 per cent to 9.6 per cent, there is considerable concern that schools are not able to source adequate numbers as they expand their seat strength. Our survey figures show that schools that had faculties of more than 20 actually doubled from 12.4 per cent to 25 per cent.

 "Acquiring good-quality teachers is a real problem and if you are located away from the hub of activity it gets compounded," explains E. Abraham, director of Xavier Institute of Management, Bhubaneswar (ximb), one of our top-rankers, which despite its locational disadvantage has a faculty of 28 with 15 PhDs.

 Acquiring faculty is a fine art in which most of the successful schools are skilled. From outright poaching from good campuses to fostering new faculty supply through fellowship programmes, the schools have to try every trick in the bag. Most also have to devise programmes and incentives to retain hard-won faculty, which is an additional challenge. Acquiring faculty is one thing and retaining them quite another, where also some more positive developments are seen.
 

Our statistics show that almost half of the schools surveyed spent between 0.5­1 per cent of their total budget on faculty development expenses, way below the benchmark for good schools in the West, which is 3­4 per cent.

Faculty resource is the toughest to acquire as the supply is quite limited. The Institute of Chartered Financial Analysts of India (ICFAI), for instance, has hit upon a novel plan of inbreeding faculty through an intensive three-year PhD programme to which young postgraduates from any discipline are admitted after a process of filtering. "We've taken on our first batch of 30 candidates," says Panduranga Rao of icfai. The institute has committed a budget of Rs1 crore budget exclusively for this programme. Fellowship programmes are another method that is being actively encouraged by the aicte. While institutes like iimA carry as many as 56 fellows on their rolls, a smaller institute like School of Social Sciences, Varanasi, has registered five fellows this year.

 B-SCHOOL TRENDS

 Survival strategies apart, an in-depth look at the management education world reveals that schools belonging to engineering campuses are clearly a distinguished lot, able to leverage off infrastructural, faculty, and intellectual resources, besides also starting out with a genuine business edge. "There is a definite advantage in starting an engineering college first and then going in for the business school," explains Hiren K. Patel, chairman and md of Nirma Consumer Care Group, Ahmedabad, who runs the Nirma Institute of Management. After all, the iits discovered this model and are only too happy about it. Of the seven iits three have prominent B-schools, while the rest are fast catching up.

 "The engineering college business school model is the way to go," says G.M. Rao, chairman of the gmr group, a diversified power generation and airport construction company in Visakhapatnam. Rao is planning a business school on his 200-acre campus at Rajam, 100 km from Vizag where the group's engineering college ­ gmrit ­ has been functioning. Considering than more than 60 per cent of admissions to B-schools are from engineering campuses, it does make sense for engineering colleges to venture into the business.

At another level Hyderabad-based ICFAI, with 10 campuses, Institute of Technology Management (ITM), Warangal, with six campuses, and Symbiosis, Pune, with five schools, represent a fresh approach to management education in the country. Even the staid old iim system itself is innovating and the two newer additions to this list, iim Kozhikode and iim Indore, provide yet another dimension to the future direction and quality of management education in the country. "The canvas is wide and we have a good start," A.H. Kalro of iimK stated while surveying the vast undulating landscape cascading away from his luxuriant campus being built atop two hillocks in the coastal Kerala town at a cost of around Rs70 crore. iimK, the fifth iim to be launched in 1996 in collaboration with the Kerala government, has pioneered the use of high-end communications and networking to conduct its entrance tests, regular class tests, and executive education programmes. The institute is intending to evolve as the national Internet service provider (isp) for higher educational institutions using its communication network being developed with Hughes.

 "You have to come to our campus to see what the future of management education is all about," says Rajan Saxena of iimI. This, the sixth iim, has launched two unique postgraduate programmes benchmarked against similar international programmes in the areas of experiential learning, it orientation and social sensitivity. It is a matter of pride for both iims that, even while operating in borrowed premises and also suffering from locational disadvantages and lack of adequate faculty, they have consistently placed their students in good companies and managed to get them almost equivalent average salaries compared with their older brethren in the iim system. A lesson for other aspiring top-rankers?

 ACCREDITATION IS THE NEED OF HOUR

 Throughout the past three years and regardless of our doomsday predictions, many of these shops set up in an earlier more liberal era seem to have been surviving, with neither faculty nor basic infrastructure, but with brochures bristling with courses that would put any average top business school in our list to shame. Clearly there is something wrong here. The only way things can be brought under check is through a concerted drive to benchmark quality informally through media studies such as this or through a formal system of accreditation being offered by National Board of Accreditation (nba) of the aicte or the National Assessment and Accreditation Council (naac) of ugc.

 "Accreditation is for programmes rather than for institutions. Our verification process is also meticulous and highly involved," says V.N. Gupchup, chairman of nba. Both institutions lack significant influence on management schools. nba's initial drive has encompassed engineering institutions and it could accredit only four management programmes in 616 accreditations so far. Bangalore-based naac, on the other hand, runs a quality assessment and accreditation programme for the entire university system, not specific to any business school. The council has currently undertaken an ambitious programme of quality assessment and simultaneous accreditation of all the colleges offering higher education before December 2003 in its first round, according to V.N. Rajasekharan Pillai of NAAC.

 For prospective B-school students, media surveys like this are going to remain among the best sources of information, and even here non-participation by some of the top players and lack of interest by most institutions at the bottom of the list are going to distort the real picture. It is the reality of the market that even the best can be toppled by an unexpected source of competition. Maybe the entry of schools like isb into our list next year ­ which in any event we hope will cover everyone, whether they participate or not ­ will disrupt the pecking order. In any case, as can be seen from the results of our survey, there are many waiting in the wings to change the battle order. After all change, as they say, is the only constant.