The recent (2015) Financial Times ranking of business schools across the world was disappointing. Once again, not a single Indian B-school made it to the top 25 list. Although the top ranks continue to be dominated by US B-schools; schools from the UK, Spain, China, Singapore and France also feature among the top 25. Top Indian B-schools don’t seem to make the grade despite having been established more than 50 years ago.
After perusing the ranking list I was left wondering why Indian B-schools are unable to reach the top echelons. The key questions that arise are as follows: is it a problem of resources; or is it a problem of governance; or is it the problem of academic leadership? Or are all the three factors responsible for this sorry state of affairs? Regarding resource crunch, at least in the case of top 15 B-schools in India — both from the public and private sector — resource is not the problem. The IIMs are liberally funded by the government and have their own corpus fund. In fact, some of them seem to suffer from a reverse problem of not knowing how best to spend the grants! Some private schools such as MDI and XLRI are also not constrained by a funds crunch.
The major problem among Indian B-schools seems to be the problem of governance. The board composition and the chairman of the board — two most critical elements of corporate governance in academia — seem to be out of sync with the current requirements of management schools. It is important that the chairman of the board spends adequate time on issues of governance at the B-school. In reality however, the distinguished captains of industry who chair the boards of premium B-schools are perhaps themselves strapped for time for anything other than their own business priorities.
There is no compelling reason why board chairmen of new B-schools should be industry leaders, especially early in the life of a B-school. In fact, in the initial phase there is a pressing need for a chairman who can oversee and give thrust on establishing strong academic processes, systems and culture. It would be more appropriate that at least for the first five years of a B-school, the chairman is selected either from academia or someone who has had hands-on experience in administering B-schools. Currently, the situation is pathetic not only in the government sector, it is much more so in the private sector. It is not an exaggeration to say that managing B-schools and managing business are two different phenomena and that proficiency in one may not necessarily lead to proficiency in the other.
The second major point of concern is the quality of B-school directors in the last few decades. One wonders where are the directors of the caliber of luminaries such as Ravi Mathai, Vikram Sarabhai, Dharni Sinha, K. R. S. Murthy, Pritam Singh and Y. K. Bhushan, who so ably shaped the schools they headed. The director is the main guiding force in shaping the destiny and direction of an institution, and therefore, ought to be chosen with utmost care. This raises serious questions about the selection process for directors of top schools. Should directors be selected by the government? Or should they be selected by the board and then names sent to the ministry, a practice that was followed earlier? This way, boards can play an important role in selecting directors in a professional manner, with least interference from the government. Once the selection is done on the basis of proven capability, the government can then to weigh in its views.
Both the government and the business schools must be clear on what kind of directors they are looking for. The director of a top B-school must be a highly accomplished academician with top quality publications (papers and books) and a proven record of administrative experience, in terms of having served as a chairperson, program chair, or dean in a B-school. In addition, the person should be well connected with business and government with exposure as a consultant, advisor and trainer. The person should also have requisite exposure that which gives an understanding of board-level dynamics. Finally, there is a need for global exposure in terms of teaching and research so the perspective on institution building is world class.
Another pressing concern is the tenure of directors. The term is for a period of five years with no extensions, even if one is doing a great job. If someone is doing an extraordinary job there should be enough flexibility to extend the term. As the saying goes ‘Rome was not built in a day’, the same applies to institution building. A longer tenure of a high-performing director can bring stable growth in a given direction. On the contrary, there is the recent trend of importing directors. This reveals that nothing much has been done for leadership development in academic institutions. Steps need to be taken to address this lacuna.
The present advertisement for IIM directors does not highlight many of the above cited factors. In fact, undue emphasis is laid on marks and division in graduation and post graduation. Perhaps, the thinking is that being a first class student makes one a great leader, while proven experience, achievements and accomplishments have little value. In fact, the pool of good candidates can be significantly enlarged by getting nominations from distinguished academicians and industry veterans. This will provide the opportunity to select better quality candidates. On the other hand, a narrowly defined pool may not throw up candidates with the right mix of competencies and capabilities.
The person heading the selection committee is yet another important factor to be examined. Eminent academicians from the field of management as well as successful corporate executives — where relevant — need to be appointed to head the committee, rather than those who do not have exposure to and knowledge of management as a domain.
My observations have been further reinforced by the research conducted by the NHRDN (2014-15 survey, published in People Matters, March 2015) where, in the area of governance and leadership, barely three schools (out of the top 20) are highly rated; rest of the schools feature either in the medium or low category, on such an important factor in today’s context of heightened sensitivity to ethical functioning. It’s a pity that the very schools expected to groom and develop future leaders for the corporate sector are themselves not well governed and managed.
Last but not the least, we Indians have imported
everything including research and yet even after so many decades, we have not developed a strong research base of relevance and use to the industry
— one of the major stakeholders. The 2014-15 NHRDN survey demonstrated that not only the quantity of publications is average, but the
quality of work (beyond the top 10 B-schools) is highly inadequate.
It is high-quality research that can make B-schools relevant to the corporate sector and the government, in enabling them to solve some of their problems. Such research will also refresh and update the knowledge levels of the faculty, who will then do a much more proficient job in the classroom, owing to their updated understanding of issues and problems faced by the corporate sector and the government. The challenge, however, is to hire faculty with this orientation since there is such a dearth of good quality faculty. The other option for directors is to build a culture that promotes research, enables people to think out of the box and publish. They can also build top-quality professionals by exposing them to top-quality training at the global level. Above all, directors have to themselves become model professors and credible leaders in order to influence and shape the thinking of faculty and students.
Fundamentally, the doctoral program in a good management school in India ought to be given greater thrust in order to develop future scholars and professors. It is also a good way to promote research in the business school. Faculty themselves get constantly updated in the process of supervising the work of doctoral students and have the added benefit of joint publications, thus bringing together the power of experience of faculty with the raw skills of young students.
The moot point, however, is to attract bright students. It is not surprising that bright MBAs gravitate towards high-paying jobs. In fact, B-schools are caught in the conundrum of diminishing returns — a good MBA will typically not join a PhD program, and a good PhD typically won’t opt for a teaching career. Thus, there is a great need to expand the pool of talent to include candidates across various related disciplines, and hence the selection criteria need to be re-examined accordingly. One of the best ways to attract good minds to do doctoral work is by drastically revising the fellowship stipend —from a meagre Rs 25,000 to at least Rs 1, 00,000 per month. The current fellowships are certainly not enough to bring in good quality talent and thereby only those who don’t have other options will join B-schools.
The Indian government has been paying lip service to the importance of innovation. One wonders if it has a strategy to attract good talent. If it is serious about building growth and innovation, it must attract best talent to teaching and research. Indian professors are paid peanuts compared to professors in the US. Comparison of salary across professions in the US shows that salary of professors are not drastically different from those of corporate executives. In India, on the other hand, the salary gap is so wide that a student of an MBA program races ahead and beats a professors’ salary in a matter of five to seven years.
Clearly, there is a dire need to take cognisance of the variety of problems facing management education in India. Appropriate solutions need to be worked out so Indian B-schools can become top schools at the global level, and serve the interests of the stakeholders and above all, the nation.
The author, Asha Bhandarker, is professor of Organisational Behaviour, International Management Institute -Delhi
(This story was published in BW | Businessworld Issue Dated 14-12-2015)
