When education turns commodity

Financial Chronicle

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By Ashok Banerjee Oct 18 2013

The need for management education was first felt after our independence when the government of India thought that management as a discipline would help Indian industry to develop best practices and compete more efficiently.

Consequently, the government set up two IIMs in 1961. Later as India chose to focus on the services sector (banking, software, telecom and retail), the need for management graduates increased. The advantage of management education is that it provides a holistic view of business. The technical branches of education (engineering, medical, and chartered accountancy) create domain knowledge, which is essential for economic development and growth. However, such knowledge is incomplete to successfully run a business in a competitive and complex environment. When most of the industries in India were regulated, the business had to bother only about one variable-production or the output. But economic reforms and deregulation in the early 1990s have shown that business managers have to be worried about many other things, such as brand, quality, product differentiation, and behavior of rivals.

Managing these multiple variables requires different sets of skills, which were not available in traditional technical education. Management education bridged this much-felt gap; it highlighted that business decisions are essentially inter-disciplinary and there is no unique solution to business problems. One can only identify several options to tackle a business problem and choose the best alternative according to the available information at that point of time.

Realising the importance and popularity of management education, many private management institutes/business schools have been set up in India over the past two decades. Some of these schools were set up with a long-term objective of creating management graduates with reasonable skills to meet the industry requirements. However, some private schools were also set up with the clear objective of short-term return on investment.

Many abandoned factories, garages and vacant lands were converted into business schools with reasonably good physical infrastructure, but with poor quality faculty. Even those schools were attracting large number of students.

These schools were treating ‘students’ as ‘customers’ with a clear signal that education was looked at as a ‘commodity’. Everything was going well till the beginning of this century (maybe up to 2004). Business firms were happy recruiting management graduates from all over the country, at times offering even clerical jobs to management graduates from smaller schools.

Gradually, industry realised that many management graduates, passing out of smaller and new management schools, were not ‘employable’. The poor quality of education in those schools came into focus, and as the placement scenario of management graduates plummeted (mainly due to lack of proper education caused by absence of quality faculty), enrolment of students dropped sharply. Many such schools found it difficult to continue their business and had to close down.

The management education landscape has changed significantly post 2007. Projections made by various agencies about the demand for management graduates in the country have all gone wrong. The badly-hit financial and telecom sectors in India have almost stopped recruiting management graduates. Companies have started recruiting graduates from technical institutions (ISIs and IITs) and even some top-rated undergraduate colleges are providing them on-the-job training on certain management skills to meet their requirements. Management schools are today facing multiple challenges — huge quality gap between top 20 schools and the rest, poor PhD programmes in the Indian universities in the areas of management and bleak job prospects for management graduates.

While the present job market scenario is a transient problem, other concerns are quite serious. UGC is concerned about the quality of doctoral programmes being offered at Indian universities and it is believed that the regulator is trying to address this issue. But the problem of huge variations in teaching quality at different management schools and the lack of quality faculty are to be addressed by the business schools themselves. IIMs and a few select private business schools have a role to play in this respect.

Technological intervention could be one way of addressing the challenges. Today, many IIMs (and other schools) are aggressively using satellite and internet-based technology to offer executive education programmes to the working population. The long-duration programmes of IIM-Calcutta could be one such example. These programmes are designed for people who cannot undergo full-time management programmes but are in a position of responsibility in the industry that requires them to use management skills.

Similarly, the Khan Academy experiment (essentially for secondary schools) has now been emulated in management education pedagogy. Top business schools around the globe (pioneered mainly by the schools from North America) have started experimenting with massive online open courses (popularly known as MOOCs), where courses are offered free of cost for the public at large. In addition to traditional course materials, MOOCs provide interactive user forums that help build a community for students and professors. Students are asked to go through the basic concepts/philosophy of a course (through MOOCs) before attending the same course in the class. The results of the experiment are encouraging — classroom sessions have become more participative and more time is spent in critiquing a concept rather than understanding the concept. The attention span of participants has increased.

Realising the importance of technology-enhanced learning, the human resources development (HRD) ministry has set up the National Mission on Education through Information and Communication Technology (ICT), mainly to improve enrolment ratios in schools and colleges.

However, top management schools should look at MOOCs to help solve two problems — improve student participation in the class and to some extent bridge the gap in the quality of education between top management schools and others. IIMs should take the lead in developing online course materials for the core courses that are taught in the first year of an MBA programme. Such interactive materials should be developed by top-class faculty and should be made easily accessible through websites.

Management schools in India would be encouraged to enroll to such site(s) and provide access to those online courses to their students. That way, IIMs will help a social cause — improve the overall quality of management education. Also, students who are not fortunate enough to get into IIMs would have the opportunity to ‘attend’ to the lectures of the top-rated faculty from IIMs. This will also help the ‘local’ faculty of the participating management schools to attend those classes and gradually improve their teaching quality. The ‘local’ faculty can devote more time to clarifying doubts/queries of the students and to developing elective courses.