Until 1990, management education in India was limited to around 15 business schools of repute. Liberalisation led to a massive increase in the number of B-schools by the private sector. During this expansion of capacity, quality dilution came forward as a major challenge. The industry experienced major talent crunch despite B-schools investing in curriculum, faculty and industry relationships. The scenario, however, in the present circumstances is defined by constant innovation and disruption. Under these circumstances a business school can sustain itself through the following.
Setting up an educational institution of repute is a gradual and sometimes a very painful process. A promoter, who enters this industry with a view to get fast returns, is bound to fail. The minimum gestation period is five years after which you may get a 10-20 per cent surplus.
Many promoters are under the false impression that an AICTE approval is a life-time guarantee for student intake. They flaunt their approvals, affiliations and accreditations repeatedly.
But the ground reality is that these recognitions may be a ‘necessary’ condition to attract students but they are certainly not ‘sufficient’ conditions. As per one estimate, 73 per cent of management graduates trained in AICTE-approved institutions have been found to be unemployable.
Faced with falling student intake, a typical promoter immediately increases his advertisement expenditure. Most of the advertisements flaunt things like state-of-the-art infrastructure, experienced faculty and 100 per cent placement! The increased expenditure on advertisement should not be at the cost of compromising on facilities and faculty. The advertisements should be more informative in nature rather than be totally persuasive.
The self-financing private sector is market driven. For a vast majority of institutes if you can afford to pay their fee, you are in, irrespective of your calibre. The economic compulsion forces the institute to admit all kinds of students.
If there is one thing that can an educational institution successful, it is its capacity to attract and retain excellent teachers and researchers. The promoters routinely complain of shortage of competent faculty, particularly at the middle level and above. But facts speak otherwise. Most of the small-time promoters assign very low priority to faculty. Had the private sector as a whole made concerted effort in this direction during the past two decades, it would have built a strong faculty base comparable to its state-funded counterpart.
Most of these institutions rely on fresh recruits (available at low salary) and retired personnel from traditional university system. The private sector cannot poach talent from the public sector unless it makes its career advancement scheme more lucrative.
The sooner the educational entrepreneurs set their houses in order, the better it is. Those who upgrade now will be in a much better condition when competition with foreign universities takes place at home. The fittest would survive. So act now as tomorrow may be too late.