Management Institutes (B-Schools) in India:
Issues and Guidelines for Selection


By

Prof R.K. Gupta
BE Hons, MBA, FIE
- Director, Sobhagya consultancy & Marketing services- India
- Professor of Management and Former Senior corporate executive
Jodhpur-India
E-mail: cityju@rediffmail.com
 


INTRODUCTION AND SUMMARY

Every year more than 1.10 lac students aspire for and take admission in a post graduate program in Management and its variants, like MBA (University degree), autonomous Post Graduate Diploma in Management/Business administration (PGDM or PGSBA or PGPM) and in other streams such as hotel management, insurance management, and foreign trade management, etc in India.

It is boom time for MBA and Engineers who have demand in market and which is likely to remain so for at least next 5 years.

But it is also boom time for all substandard Institutes that are mushrooming almost one every week somewhere in India.

However the quality of pass outs from various university schools and private autonomous colleges is a serious matter of national concern.

In fact stage has already reached where any one aspiring to get MBA/PGDM level certification can now get entry in one or other school somewhere in India or even in foreign Universities and Institutes.

There are numerous commercial and pedagogical (teaching) models that have emerged. The latest revolutions in convergence technology based on internet, microwave and satellite transmission have helped this surge. A number of third rate institutes and universities have jumped on bandwagon to make money by launching distance education programs (Like State Technical Universities with very poor standards headed by politically appointed and retired outdated persons), which these same universities themselves don't recognize for their own various purposes. This is a big fraud with citizens and youth of India .

Many B–schools claim being centers of excellence and charge huge fees (IIMs included). This is also true for State aided or controlled, university affiliated private or autonomous institutes alike, and new private universities. On the whole education in management excepting for a few universities' own campuses is substandard and avoidable for various reasons.

The student is in quandary as to what to choose and how to choose and what should be fair expenses for getting this PG level Business Management education degree or diploma and will be it really worth?

Whereas on one hand employers, students and their parents are concerned about quality of these PG pass outs, on other hand , a plethora of regulatory bodies have miserably failed to improve and maintain quality. Large numbers of unapproved and fly by night people are running institutes in engineering, management and other professional courses and students and employers both should beware of this. No where in world the higher education is unregulated. USA has most rigorous accreditation process. Education is essentially non profit work but has been turned into a tax free, free-for-all business in name of liberalization and reforms. Governments in India have abandoned their duty to keep fees in check and regulate higher education. Especially the Current government run by UPA.

All those so called business leaders who now head boards of IIMs and other Institutes should  take out and donate a part of their revenue to these Institutes instead of blindly raising fees and causing wide spread damage and inflation in the country. It is highly irresponsible act. It is time to set up National Pricing Commission in education and an Independent Regulatory Authority for accreditation with law for compulsory registration of all educational Institutes in India from Middle schools to PhD level (especially Technical education) and treat the infringement as criminal offense and attachment of all assets.

Like any sunrise sector, a large number of industrial houses of past have jumped into Education business as it is easy money, no risk investment , no credit  needed to be given in market and there is no perceptible ability of customers ( students, parents and employers) to compare and value quality.

It is unfortunate that even Employers don't have any idea about this and they blindly support some B schools and pay heavy salaries while leaving out lesser known but well managed institutes that work hard to provide quality education and have good students available for employment. Employers must also do more research and patronize good schools by their own research. It will pay them well for this exercise. The mission of one and all should be to provide quality education at minimum non profit basis and to create egalitarian system across the country and not to hype up only a few substandard institutes at cost of hidden large amount of talent all over the country.

The major problem with management education in India is almost foolish rules and laws governing these and interference of state governments in not allowing at least reasonable fees for quality education in name of popular welfare measures and exploitation. It is counter productive.

While a large number of Institutes are busy looting and charging heavy fees showing external get ups, impressive buildings, exaggerated claims and an inactive and false list of dignitaries attached to institute board who in reality have nothing to do with these institutes, the universities are being paralyzed by interference and politics of Babudom and politicians.

Another major reason for crisis is lack of leadership to these institutes because of outdated and  beaten rules of requirements of PhD work for Directors and Professors ( which may suit general faculties in Universities) whereas we all know about quality of PhD type courses in India which are no better than getting a graduation degree from any C-class university. But the well entrenched academicians in charge of UGC, AICTE and other bodies insist on such qualifications to promote their own interests. These types of rules have really hampered practical and meaningful technical and business knowledge to be imparted in institutes.

Despite all the above constraints more than 1280 B-schools are functioning in India and there are many other models available for MBA/PGDM courses as general branch or variants like MBA-F, MBA-Insurance, MBA-IT.MBA- IB, and so on.

In the end of this summary :

I would like to emphasize that involvement of people with hands on experience in corporate sector is very limited in technical education ( both in Management and Engineering), the States' affiliated college fees are too absurdly low to give good education and there are several dubious institutes opened to mint money in country.

Most of these institutes are in hands of poor quality Directors and Deans (retired and sub-standard PhD holders even from Hindi and arts, who are outdated in modern environment anyway) and who are only theoretical guys and have no or namesake experience in Industry and unproven capability in business management and who have inferior run-of-mill PhD from sub standard universities in India of little relevance to the practical and technical courses. It is like asking a doctor never having gone on surgery table to teach cardiac surgery in class. What will happen? In my last 10 years of academic association, after long stint in corporate sector I have seen a very large number of substandard teachers, directors and deans with inferior and irrelevant qualifications and PhDs. Their basic concepts are not clear and they have no administrative abilities and networking. There is fundamental difference in PhD and consultancy experience of professors in USA and the system working in India.

Models available:

MBA/PGDM education in India:

1. University's own department in campus. Only universities can give degrees like MBA. Both State and private

2. Affiliated colleges of universities in same place or the whole State. Now Technical universities have been given this role. But most of them are having very poor or no infrastructure at all. With typical bureaucratic and politically appointed people directing the technical education and making mess of it. They are mainly from economics and commerce departments of old setups.

3. Autonomous institutes (No affiliation) that give Diplomas.

But They have to be necessarily approved by AICTE as per law and also in interest of students. Students should check if the institute is approved one or affiliated to any reputed university (UGC Recognized and real one). Otherwise their diploma or degree will be no better than trash paper. It also would not be out of place to inform that PGDMs are not at all equivalent to MBA. Only those institutes' PGDM is equivalent as MBA degree who have been declared so by AIU (Association of Indian Universities or Ministry of HRD, department of Higher education).It is also clarified here that IIMs or IITs do not need AICTE approval as confused by students.

4 . Universities running distance education program and open mode like IGNOU Delhi, Kurukshetra University, ICFAI and several others Universities in India. Being in distance mode they have to be preferably of 3 years duration instead of 2 years. Distance education In India is generally of very low quality and not approved by Distance Education Council at IGNOU Complex in New Delhi.

5. Many institutes give one year or one and a half year PG diploma to by-pass legal requirements of approval. These are not same as 2 years serious campus based diploma, please remember. It is not academic qualification. Many universities also give such one year diplomas on distance education mode or in evening campus class modes as vocational certificates.

6. Part time 3 years MBA/PGDM program run by recognized institutes and universities in evening faculty for working executives.

7. Foreign universities having collaborations in India and those having students exchange program with limited-time studies abroad.

8. New private universities like ICFAI (A national Brand), Amity and several others are now coming up. A few especially new ones are however not working very cleanly and are running MBA programs at several places without approval of this model from authorities and Distance Education Council of India. Reject them.

But students should note that if the degree or diploma is not recognized or from a good Institute/University and is not for 2 years duration, it is merely an additional vocational Training certificate and not at all a proper academic qualification as far as Management education is concerned.

WHAT INSTITUTES SHOULD OFFER?

Based on my experience as senior corporate sector executive and now as a Consultant and Professor I can give following suggestions for students to pick for:

These are my observations and recommendations and have nothing to do with official guidelines of any authorities and neither do I need to concur with other namesake-experts available in plenty and the authorities who have anyway failed to maintain quality and proper growth.

Much needs to be improved in technical education in India, its infrastructure and recognition of technical people in education instead of perpetuating sick and old outdated academic degree based system insisting on poor quality teachers and PhD holders.

We should not forget that most of institutes are meant only for MBA program and practical skills giving and not for fundamental research where such higher degree holders (like PhD or post doctoral work) are more adept. This foolish requirement in my opinion should be done away with governments to attract and invite real Industry talent in higher technical education and at good salaries. We should at-least see if 50% faculty and Centre Head is from hard core industry experience or not for 15 years or more. AICTE and UGC must change rules for this urgently to revamp technical education in India.

SO LET'S PROCEED AND SEE WHAT IS NEEDED?

1. Try to go for a 2 year course and not of lesser period and preferably from campus based course and not distance mode. That is second choice and for those who can't stay in cities or are working or have any other family problems.

2. Prefer MBA to PGDM unless it is treated equivalent for certain Institutes (list is available with AIU, New Delhi handbook); some examples are MDI, IMT, IIMs and a few more (May be around 20 in India in all).

3. Avoid unapproved/Unrecognized programs (UGC/AICTE/AIU) as these are merely additional vocational qualifications like foundry men course or airhostess grooming course or cosmetics and beautician course run by street corner shops; and will be treated as such. You won't be eligible for Research/PhD, emigration, and teaching jobs if you wish these later on. Public sector will also not accept you. Most of employer's HRD people should know all this and be vigilant.

4. Don't get impressed by massive and impressive building and facades. These are normally the only thing many institutes have in India. What for example 100 acres of IIM campus has to do with their 150 seated MBA college needs? It is sheer wastage at cost of students and public exchequer and irrelevant point. Besides such buildings and areas are more of real estate investment to store up black money(Private sector only) and surplus money to create assets which will appreciate in future. There is no other purpose. The buildings have to be functional and simple with required comforts.

(Most of students get hypnotized by well decorated front desk office, hi–fi equipment visible and the 'PhD' board on Director office there who may not have sold even a pin in his or her life or may be even from  non-management subject or an allied subject and even English or Hindi.)

5. All institutes have to disclose information on their website now-a-days as called 'Mandatory information' by AICTE and one must go through it to see what they have

6. Faculty (my opinion): See if 50% of faculty is there since 3 years at least on regular service (Most fraudulent institutes keep changing faculty every year or every semester to save on salaries). At least 25% faculty is senior people from consultancy /Industry background with at least 15-20 years hand on experience in Industry or Business or Consultancy, and not mere substandard PhDs.

There should be one full time faculty member for every 10-12 student in Institute. This means for a 60 seat B school there should be at least 10 and preferably 12 core full time regular employed faculty members. Enquire about them and their list and see if they have requisite Masters and Technical qualifications in first class, with experience. It should also be available on website. But these lists on website keep changing.

In addition there should be at least 4-6 visiting faculty members for specialized courses. These are other than Guest lectures which are one time event for industry introduction and are given by working executives in industry or government organizations. These are not same. But most Institutes mix up all of them and cheat students by creating a long list of faculty. Even those who are relieved or have left are also shown in list. If such set up is not available reject the institute or demand changes if you are already enrolled there. You can complain to Chairman of AICTE and Vice chancellor of University concerned, if any.

7. The Director need not be necessarily be PhD (mostly substandard and irrelevant as seen in India) unless from Industry background but instead be a capable and well connected proven industry experienced person from industry/consultancy field with a few years' academics experience also. Students must demand this. Director should be proven administrator.

8.One computer for each intake seat .That means for 60 seat Institute there must be at least 60 computers with high speed Pentium IV and above microprocessors and high speed broad band connectivity not less than 4 Mbps. There should be a networked laboratory of computer with at least 4 printers. However due to fast changing technology and most students having their own laptops these requirements are getting less important (some Institutes give laptops in fee package-Why this is done any one can understand and is totally irrelevant).

LIBRARY AND SOFTWARE RESOURCES

9. The library must have at least 6000 to 8000 copies with at least 3000 or more titles. The institute should subscribe to at least 20 international and 30 national journals. These are different from magazines and periodicals and news papers often displayed by fraudulent Institutes in Libraries.

The library should be fully computerized with computer based queries for books and optical reader for issuing books. It is better if library is hooked to at least one online network of libraries like DELNET or other international library networks. Institute must have SPSS package with at least two add on utilities of latest version, licensed software and preferably an ERP package for educational purpose. I would advise SAP and ORACLE to come out with cheaper versions for their ERP packages specially for technical and B school training purposes  and not be greedy and indulge in only profiteering and commercial sales.

10. The faculty should be paid at least AICTE scales and there should be 30% faculty in Professor Grade and senior people (20 years plus experience).

Remember, even these scales set by UGC and AICTE are very poor and if institutes don't pay even these scales, you are sure to get reject and useless material in teaching faculty. This is crucial and students and their parents should insist on this and demand quality well paid faculty. Assistant professor's pay scale starts from Rs 12000/basic and for Professor from Rs 6400/basic and total amount almost more than doubles. It is too less for talented people to join this profession. But even this is not paid. You will get garbage in return for sure. More details are available on AICTE website and with any University office. You can't get a top surgeon of kidney for Rs 5000 fee for operation. Students should get together and pay even extra money but insist on senior and good core faculty team and not visiting lectures which are used to save money in garb of expertise. These are add-ons and not substitute for home team. Many institutes show false list of teachers in their websites and prospectus who don't work, are VF or have left.

11. Every week there is at least 1 guest lecture (Total 25-30 a year) of senior Industry/business guys or persons of eminence.

12. Most of placement lists are generally fraudulent and cooked up. Have a close look at it. The quality of companies and also see how many companies have returned for third time to the Institute. What minimum package was offered? (Carry home and not cost- to- company). Although this is not job of institutes to get placements, normally they do get companies if they are good and students' quality is good. Institute must be able to get you at least Rs 15000 PM carry home and at least 70% students should be got placed. Remember marriage (Girls) is not a placement or self employment is not placement.

13. All class rooms and library and computer rooms should be air conditioned and there should be at least 2 water coolers and a small canteen to sit 30-40 students (60 seats).

14. Institute should have at least 2-3 acre land of their own ( in smaller towns) and must have hostels for at least 25-40% of total student strength with common room, games and color TV and coolers. Also computers with internet in common room at least. A warden should be there.

15 See if Institute introduces at least one new course every year in syllabus?

16. Who takes the examination, and standard of evaluation? Most Institutes give 40% marks as internals and exams are taken by same teacher who teaches. This definitely makes program quality go down. Regular assessment, presentations and project works are must for a B-school.

17. Fees: An important issue:

In India fees are charged from Rs 5000/ P.A to Rs 10 lacs for MBA/PGDM whole program (2 years). It depends on its structure and financial sources.

While leaving out all university system colleges as they are of course monitored by government, I guess a fee of up to Rs 80,000 per year is adequate and sufficient to meet above standards in any good and small private self financed Institute for MBA/PGDBM program.

The older institutes including IIMs can go for expansion or already have gone and generally have 120-150 seats but they still have very less faculty, the key resource on which money is saved. Even State universities employ fresh inexperienced teachers on Rs 10,000 to 12000 PM contract which is a shameful conduct and playing with career of students. It is also exploitation of teaching profession. Fees above this level as mentioned by me are unfair and should be rejected.

Unless there is a ground to justify more, like giving text books, laptops and foreign faculty visits etc. In India, education system is being exploited by businessmen although education is basically non profit venture. Students and their parents should demand reasonable fees and reject high fee charging colleges. It is unfortunate that while AICTE and UGC insist on quality, State governments and Universities fix as low as Rs 30,000 to 40,000 fees for unaided private affiliated institutes which can't provide good quality in this amount. They know it very well. But carry ion like this. This is very bad conduct of authorities harming these programs. The fees must be in range of Rs 70,000 to 80,000 per year without frills, depending on various factors. Any thing lesser or more than this is unjustified.

18. For those institutes that are 5 years old, there should be separate placement cell headed by a separate full time highly experienced and senior faculty member or placement advisor/consultant.

19. Does institute or University campus have strong networked Alumni association with an office?

PLACEMENT, QUALITY AND THE FEE ISSUES

20. While Placements are important, it is avoidable both for Institutes and students to give it too much importance and instead focus on high quality of education and character building. This can be done at affordable and reasonable costs in India (As suggested in previous paragraphs) and especially when education is noble task of nation building and non profit work. Central Government must act on this issue and put a check.

If we test on these parameters, the real output and its quality, unnecessary infrastructure etc, the huge fee increase by IIMs recently, is disservice to the nation as it is unjustified to absorb their inefficiencies and mediocre quality costs by merely arguing that students get good pay package after the course .

This means IIMs are working as commission and placement agents in the country taking their cut for awarding a diploma and from future projected earnings of students. Sounds like stock market derivatives and PEG ratios used by investors? It is stunning. Were they set up for this purpose? There is absolutely no logic and validity in spending Rs 8 lac per students on simple management education ( much simpler than Engineering courses) in India where per capita income is just Rs 30,000 per year. Consumers should understand that taking loan is merely a vehicle to spend in advance but it does not diminish the real cost of product or service in economy and has inflationary effect. Same way scholarship is merely a subsidy. The manner in which these self claiming premier Institutes create fallacy in the country is deplorable. Such unjustified huge fees (At least for resident Indians) create ripple effect and all kinds of substandard institutes also raise their fees, too. It is a serious concern for national economy. The apex Institutes of India under government sector were supposed to act responsibly and with restraint. Just compare their fees with affiliated colleges in states where fee is just Rs 35000/. So deliberately Government has created elite class in education. It is anti national act by propping up a few Institutes and killing quality of majority of institutes in India. It is discriminatory act by national government and unconstitutional.

There are several other issues but these are not relevant at this time to be discussed with the prospective students.

CONCLUSIONS:

If the students see above points they can make a good choice. It would pay them to visit websites of AICTE, AIMA, and UGC etc which will give them more insight. List of unapproved institutes are also shown on AICTE website. Students should also know their rights and demand improvements and good experienced faculty from industry and business.

Unless you are already working and experienced or want to improve qualification for career advancement reasons, avoid distance education and part time diplomas and degrees. Go for campus based full time course in a good institute.

At the end Please take the ratings published in various magazines every year with a pinch of salt. Like other publications, these too are of low credibility. Do your own research and talk to senior students and ex students and preferably faculty of that Institute to get real picture. It is not difficult to do. Go for national Brands if you can afford or it is practical for you. Most of them have centers now in major cities of India.
 


Prof R.K. Gupta
BE Hons, MBA, FIE
- Director, Sobhagya consultancy & Marketing services- India
- Professor of Management and Former Senior corporate executive
Jodhpur-India
E-mail: cityju@rediffmail.com
 

Source: E-mail May 19, 2007 / June 5, 2008

       

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