The Hindu Business Line : Why B-schools in India need the IIMs

IT IS that time of the year when management institutes across the country will be gearing up to participate in B-school surveys conducted by business magazines and the All India Management Association. These surveys have become an annual feature for some time now.

Apprehensions have been expressed over these surveys as they fail to rank the B-schools on a uniform basis. A B-school may be ranked in the top 10 by one survey but placed in the top 20 in another. And so it is difficult to discern the ranking of a school based on these surveys.

Such inconsistencies arise because each survey assigns a different score to parameters on which the B-schools are ranked. Parameters such as infrastructure, intellectual capital, placement rate, institute-industry interface and admissions process are commonly used at the aggregate level.

Each parameter is then broken down into sub-components and rarely do two surveys employ an identical set of sub-components. The rank of a B-school is, therefore, likely to differ from one survey to another.

B-school surveys rely on self-administered questionnaires and so there is scope for manoeuvrability. Agencies conducting the survey seek to overcome this problem by cross verification. The auditing procedure is so rigorous that the visiting survey staff may require an institute to revise the figures originally given in the questionnaire.

The visits also help verify the claims of infrastructure facilities as reported in the questionnaire. Such follow-up visits certainly reduce the bias associated with self-administered questionnaires. This is not to suggest that such surveys do not suffer from any methodological limitations.

The fact that they fail to produce rankings that are uniform challenges their validity. In such surveys there is also a tendency to compare apples with oranges by not distinguishing between composite colleges and stand-alone institutes, old and new, and so on.

Nevertheless, there are vital advantages to such surveys. First, these surveys inform stakeholders of B-schools of the relative standing of a management institute in the country. For students, who are perceived as customers, these surveys are an opportunity to learn more about institutes and make the right choice. For those heading them, it is an opportunity to know how their institutes are performing in relation to others. It also helps companies identify which institutes to recruit from.

Second, and more important, these surveys serve as benchmarks. They report the scores obtained by the top few B-schools. This gives others a comparison between them and `the best'.

The spurt in management education came in response to economic reforms, and most B-schools are run in a businesslike fashion. There are over 950 B-schools approved by the All India Council for Technical Education. They compete first for students and then for campus placements.

Just as in the product market, there is stiff competition among the B-schools. Just as firms in the product market give primacy to quality improvement, B-schools too strive for greater quality. Growth of intellectual capital in B-schools stands as evidence of this growth.

For instance, last year, almost every survey concluded that the publication per faculty had improved.

While competition is forcing them to improve quality, the question is what is the best way to do so? Just as the product market has used benchmarks, so too have leaders in B-schools.

It follows then, what are the benchmarks? Since the Indian Institutes of Management are perceived as `the best', they are the obvious choice.

The IIMs are government-funded premier institutes, and some of them have created near world-class infrastructure and remarkable intellectual capital over the years.

A former director of one of the IIMs described the IIMs and the IITs (Indian Institutes of Technology) as "national heritage".

Unlike other set-ups with assured funding, the IIMs have delivered quality, a fact reflected in the salary packages students are offered by multinationals and domestic companies alike. Being government-funded, they also have additional responsibilities.

The IIMs at Ahmedabad, Bangalore and Kolkata have consistently been ranked among the top by almost all surveys. Scores the IIMs get under each parameter serve as benchmarks and are a useful basis for other B-schools to improve the quality of education they impart. The IIM scores also reveal their relative efficiency, which the public at large have a right to know.

It is in this context that the recent decision of Directors of the IIMs not to participate in B-schools surveys has to be viewed. Apparently, the Directors find the methodology used by the agencies and hence the validity of such surveys questionable. They have, on the other hand, decided to participate in the surveys conducted by international agencies!

Their decision not to participate in domestic surveys will certainly deprive other B-schools, especially the privately-run and newly established ones, of benchmarks.

As part of their social responsibility, the IIMs, could help improve and bring more credibility to B-school surveys by not shunning them. Policy-makers are concerned with competitiveness of domestic goods in the international market and in selling the `Made in India' brand.

It is equally important to focus on improving the competitiveness of domestic products in the international labour market, which can be achieved by infusing quality consciousness in the education system.

The IIMs, the IITs, and a few other leading private institutes can only cater to a miniscule proportion of the demand for quality manpower.

The last few years have witnessed a considerable increase in the number of management institutes. It is now time to think in terms of quality in order to improve competitiveness of Indian human capital. In addition, improvement in quality of management education could attract foreign students.

The B-school surveys are useful as they act as useful benchmarks; and if the IIMs do not participate in them, it will not augur well for improving quality of management education in the country.

(The author is on the faculty of ICFAI Business School. He can be contacted at dennisraja@hotmail.com. The views are personal.)

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