India's Top-Ranking B-Schools Are at a Crossroads

Young entrepreneurs at the Indian School of Business (I.S.B.) speak with President George W. Bush at a roundtable discussion held during Bush's three-day visit to India in March. (Photo: Mandel Ngan / AFP-Getty Images)

Academicians and industry captains are cognizant of India's emergence as an economic power due to globalization strategies, which are transforming various sectors of the economy including the fast developing sector of higher education. India is undergoing a paradigm shift, which is reflected in the present economic boom and growth rate. For example, stock exchanges are considered the barometer of economic growth and the Bombay Stock Exchange stock index has touched a historical peak of 12k, placing it among the top five stock exchanges of the world. There have been fundamental and irreversible changes in the economy, in government policies, in the outlook of business and industry, and in the mindset of Indians.

India has become a surplus nation in food and foreign exchange earnings, currently up to $1.3 trillion from a meager $4 billion to $5 billion in 1991. This unprecedented increase has been partly due to direct investment by foreign companies and partly due to outsourcing activities. The modernization of industry is now a front-runner in the emerging knowledge-based economy with a diversified and large industrial base, which is becoming globally competitive. For example, Tata Steel and National Aluminum Company Limited (NALCO) are the lowest-cost manufacturers of steel and aluminum in the world. Some Indian companies have gone global with a presence in 60 countries, including the United States, Europe and China. India is one of the top ten producers of bulk drugs in the world and 60 percent of its bulk drugs production is exported. India is the second-largest cement producer in the world with 110 million tons. The auto parts industry has emerged as one of the country's fastest-growing manufacturing sectors; this is expected to reach $8 billion in 2006. India's services sector growth rate has been very high too.

A large and growing market of 1.1 billion people, out of which, 300 million are middle-class consumers, has been attracting investment in India by world-class companies because of the high profit-making potential. Furthermore, because India has stable, mature, vibrant and exemplary democratic governance, institutions and transparency, it has a great potential to build world-class intellectual capital. For example, the rise of India as an innovation hub has attracted great admirers of Indian prowess in the I.T. area at a global level. All these new developments have increased the confidence of India on the international level, and its ability to decrease the level of poverty. These factors indicate that India's new economic policies are working. It is emerging as a global economic power and having an impact on the fast growth of the educational sector. Based on certain parameters and issues, this article attempts to evaluate whether India's top ranking B-schools are emerging as world giants.

Business Schools in India

In line with the changing economic scenarios, B-schools are also diversifying their programs to attract the world market and thus contributing to this transformation process as they are run in a businesslike fashion. There are over 950 B-schools approved by the All India Council for Technical Education (A.I.C.T.E.) in various categories including the Indian Institutes of Management (I.I.M.'s), university departments and autonomous private institutes. However, the sudden spurt in these B-schools has also raised concerns about quality and the need for regulatory mechanisms among academia and industry captains. In India, ranking surveys come out with different sets of rankings for B-schools. The following table lists the top 10 ranked B-schools in 2005 from one such survey, all of which have the potential to emerge as world giants in the future.

Rank in 2005 Management Institution
1 Indian Institute of Management, Ahmedabad
2 Indian Institute of Management, Bangalore
3 Faculty of Management Studies, New Delhi
4 Indian Institute of Management, Calcutta
5 Xavier Labor Relations Institute, Jamshedpur
6 Indian Institute of Management, Lucknow
7 Indian Institute of Foreign Trade, New Delhi
8 Symbiosis, Pune
9 Jamnalal Bajaj Institute of Management Studies, Mumbai
10 Narsee Monjee Institute of Management Studies, Mumbai

Source: Business Today

Indian School of Business (I.S.B.)

Among B-schools, the Indian School of Business (I.S.B.) in Hyderabad comes first to mind when we talk about emerging world-class institutions in India. It was set up in 2001 as a private B-school with the blessings of Fortune 500 companies and top Indian organizations. I.S.B. is considered a world-class institution because it meets a number of established parameters, for example, quality teaching and qualified faculty, quality research published in reputable international journals, admittance of quality students (G.M.A.T. and not C.A.T.), innovative curriculum, excellent infrastructure and library resources, intensive industry-interface, international association with top schools of the world, rich placement, dynamic dean and so on.

It collaborates with the world's leading business schools like the Kellogg School of Management and the Wharton School in the United States and the London Business School. It offers an innovative post graduate and executive development curriculum. Its faculty is drawn from top B-schools across the world. It has an ideal mix of resident and visiting faculty that gives students the benefit of international exposure while providing content that is contemporary and global in its perspective and at the same time giving students a flavor of Indian management practices. It offers a one-year Post Graduate Program, a Post Doctoral Research Fellowship Program and the short-term Open and Customized Executive Program. For 2006, in its post-graduate program, it had around 350 intakes, over 70 of whom are foreign students from all over the world.

Indian Institutes of Management (I.I.M.'s)

An emerging world-class B-school seeks to impact the management profession by offering high quality learning to students and executives from all parts of the world. Their programs are expected to be delivered by faculty who are recognized for their dedication to teaching and high quality research, and who have close ties with the international business community. The six government-funded I.I.M.'s (located in Ahmedabad, Bangalore, Calcutta, Lucknow, Indore and Kozhikode) are considered elite and privileged B-schools as every youth dreams of graduating from one of them. They all together admit about 2,000 students, and faculty numbers around 500. Among the six, I.I.M.A., I.I.M.B. and I.I.M.C. are among the top ranked in India as well as also highly ranked among institutions in the Asia-Pacific region. This status increases their potential to become world-class institutions. Furthermore, they have adequate resources as the director of one of the I.I.M.'s stated in a recent interview to Press Trust of India, "All the top B-schools are large in terms of their size, have diverse activities, world class infrastructure and a focus on research and consultancy." At the same time, I.I.M.'s pursue a business model in which they admit high quality students, nurture them under a management philosophy and promote the pinnacle of success as a "brand."

Program Curriculum and Teaching

I.I.M.A., I.I.M.B. and I.I.M.C. offer M.B.A., Doctoral and other programs. It has been claimed that their M.B.A. program nurtures world-class managers by exposing them to real life unstructured situations along with analytical tools and business philosophies. I.I.M.A. has also initiated exchange programs with more than 25 foreign institutions of equal repute. Every year, the Institute selects close to a quarter of its students and gives them a chance to spend one term at some of these other institutions.

In an endeavor to seek global recognition by enhancing their world ranking, I.I.M.A. and I.I.M.C. have started an innovative program, P.G.P.X.: a one-year Postgraduate Program in Management for Executives from all nationalities. I.I.M.A. has a tie up with University of British Columbia, Canada for the international immersion module. For the first time, G.M.A.T. will be one of the criteria for admittance of students. However, this was a long felt need as they started collaborations with H.B.S. and M.I.T. in the 1960's. The question is why these institutions realized this need for global recognition just recently. Why not at inception in the 1960's?

Some Salient Features

A perusal of the course structure of these B-schools shows a well-knitted component in core as well as elective courses from different areas of concentrations. They are also assisted by their international affiliates in the design and update of the curriculum. For example, the I.S.B. curriculum is designed by the associate schools (L.B.S., Kellogg, Wharton) emphasizing a global approach. Others may also receive input from industry stalwarts and alumni-turned-recruiters in order to incorporate practice-oriented materials including emphasis on communication skills. It appears that the need for offering a course on "Business Ethics" is not realized by them. Does this mean that M.B.A. students have been developing a negative attitude towards learning behavioral courses? Courses like International Accounting, Government or Public Sector Accounting, and so on are also not offered.

In these B-schools, students come from different spheres of life with various educational backgrounds such as commerce, management, economics, science, engineering and humanities, which bring with them all the advantages, disadvantages, fairness and prejudice of centuries of cultural heritage. A multicultural institute with a multi-disciplinary approach enhances the scope for a deep participatory learning approach.

One main bane of their education is less appreciation of Indian management ethos and practices and more use of American case studies, management theories and philosophy. Furthermore, it looks as if students are taught a great deal of generic strategies, which may lead students to perceive that management is largely analytic and generic which may not be true.

From certain quarters, it is also argued that the teaching approach of many Indian B-schools give students a compartmentalized view of management by function — finance, marketing, human resource development, production, and so on — and only a few give them an integrative approach to management education. In actual practice, all of them in one way or another are related.

In academic literature a number of teaching strategies and learning techniques have been suggested, such as enhanced (modified) lectures, questioning and discussions, writing in cases, problem-based learning: cases and guided design, group learning-teamwork, group learning-cooperative learning, drama, simulation games, technology-visual and computer-based instruction, technology-based delivery, fieldwork-service learning, and fieldwork internship and project work. Effective teaching not only implies pedagogic achievements, but also means sensitization in many areas for enlarging vision that is critical for attaining effectiveness. Self-learning is very important and an instructor would know how to motivate a student for self-learning. These days, I.S.B. and the I.I.M.'s widely use technology-based teaching in their M.B.A. and business executive education. Even World Bank offers online noncredit courses to the students of I.S.B.

The B-schools use the lecture-cum-case studies as a dominant method for transmission of knowledge. They rely heavily on American or Harvard cases that only provide students with past stories and scenarios and this may hinder the students' critical and lateral thinking in dealing with unstructured business situations. American culture, theories, levels of motivation and methods of doing businesses are largely guided by a culture of individualism and high uncertainty avoidance, which is different from the cultural values and business environment of India. Top ranked I.I.M.'s claim to have developed thousands of Indian cases. But why haven't such cases been popular?

Industry captains often argue that a few of the faculty in B-schools work on consultancy assignments but lack the cutting edge to drill deep as most assignments are either training programs or low-intensity workshops. Hence, there is some lack of exposure to real-life working environments. To gain this experience, the better method would be to intern with accounting companies for a limited period.

Students' Admittance and the Label of Elitism

To be admitted to an M.B.A. program, students have to go through a selection process, which includes entrance/admission tests, a group discussion and an interview if the candidate is successful in the written test. The aim of the test is to evaluate, under stress, a candidate's general verbal, mathematical and analytical abilities. Passing the management entrance test in India will require a superior command of the English language, quantities skills and a sharp mind.

The policy of the I.I.M.'s has been to admit students through the Common Admission Test (C.A.T.) and not the G.M.A.T. The C.A.T. result is less than 2 percent of the applicants who take this test, which means that only elite sages gain admission into the I.I.M.'s programs. But students who come from less privileged societies and less known colleges/universities — Uttar Pradesh (U.P.), Bihar, Uttaranchal, Rajsthan, Jharkhand and Madhya Pradesh (M.P.), for example — may not be able to pass this test easily due to language problems as Hindi is the medium of instruction in most of these institutions. How do I.I.M.'s expect such graduates to pass their C.A.T.? Furthermore, one can argue that in a changing society, talent is not the only monopoly of a small section. Therefore, talent from less-represented sections must get an equal opportunity to study in these institutions, which were created and funded by the government. This leads us to the debatable issue of creating reservations for other backward castes (O.B.C.'s) in these institutions.

Faculty Research

It is generally seen that top B-schools around the world have a very strong research base and flavor with their deep impact on industry and society. Publication of high quality research in prominent internal journals is a prerequisite for a B-school to be considered an international institution. In the past, several committees appointed in India (for example, the Nanda Committee 1981, the Kurien Committee 1992, the Ishwar Dayal Committee 1995 and the Management Education Review Committee 2003), recommended efforts to promote a strong research culture in management institutions. However, rapid progress has not been achieved in this regard. According to a joint survey conducted by COSMODE Management Research Center and Business World-India (COSMODE-B.W.), in 2002 there were only 3,600 Ph.D.'s in Indian B-schools. "What they really need is 11,000," the survey said. "The gap is not going to be closed anytime soon: the Top 100 B-schools produce around 110 doctorates annually while an additional 20-24 come from overseas every year."

When it comes to publishing their research in Indian and regional journals, the faculty from the I.I.M.'s have a record of accomplishment. A few of them also have their research published in reputable journals around the world. However, it seems that scholars from two fields in particular — Production and Quantitative Methods, and Information Technology — contribute about half of the Indian articles published in international journals, which is not surprising to us because Indians are known globally for their expertise in these areas. On the other hand, faculty in the core management areas — finance and accounting, marketing, behavioral sciences and so on — publish comparatively few articles in international journals. Compared to the publishing output of faculty at top B-schools like McCombs School of Business in Texas or the Tuck School of Business at Dartmouth in New Hampshire, I.I.M.'s faculty members have a long way to go.

C. K. Prahlad of Michigan University once remarked, "The lack of a research culture also feeds back into the system as a lack of quality faculty. If the number of publications in … [reputable international] journals is any indication, the B-schools' faculty has miles to go. It is no wonder that there is a dearth of good role models in business management research in the country. One hopes that business schools and businesses are slowly realizing the need to strengthen research. The software giant Infosys has been supporting doctoral research at various I.I.M.'s. The Bharati Telecom has initiated similar funding at I.I.M. Lucknow."

Furthermore, the faculty of I.I.M.A. seems to have large research projects funded by international and national agencies. There is a good participation by its faculty at national and international conferences. However, I have not come across any accounting and finance faculty participating in the world congress of either the European Accounting Association (E.A.A.) or the American Accounting Association (A.A.A.).

On the other hand, most of I.S.B.'s faculty publications are in top journals, which give it a slight edge compared to other B-schools. However, according to Jayant Sinha of McKinsey, there is room for improvement:

"Even I.S.B., which gets an all-star visiting faculty from some of the best global B-schools every year, needs the physical presence of faculty for a longer period if it has to get research going. From the perspective of making I.S.B. known for thought leadership, we need to have research, and for that we need permanent faculty," Sinha says.

Some time back, in order to promote and encourage Indian accounting researchers to review and publish papers in international journals, I sent a few manuscripts to them for a rigorous review. The quality of the reviews (of those who responded) was worse than that of the manuscripts.

Faculty members from Western B-schools sit on the international committees of the World Bank, UNESCO, U.N.D.P., the Association of Commonwealth Universities and accreditation boards. They act as external referees on the evaluation boards that recommend the promotion of professors in other universities and institutes. They are invited by international journals to be guest editors of special issues. Unfortunately, not many people from Indian B-schools can claim that honor.

Job Placement and Industry Interface

Management experts forecast that businesses in the 21st century will be composed of groups of specialists who work together on a specific project and then disband. Management education offers all the necessary tools to handle successfully various business and management related issues in a fast changing global economy. Consequently, according to one estimate, about 10,000 M.B.A.'s are churned out by I.I.M.'s and a host of other universities and recognized institutes every year in India. A graduate with a good M.B.A. degree has no problem getting a good job. An M.B.A. degree is considered ideal by job seekers as well as employers. Recent graduates are generally inducted as management trainees for limited periods before being absorbed in regular scales.

Job placement is the impetus for Indian B-school rankings. The I.I.M.A. claims that when it comes to recognition by major recruiters worldwide, there is an increased global recognition to job placement and job diversity. For 2006, I.I.M.A.'s 235 M.B.A. graduates had, on average, three job offers per graduate. The majority of the placements came from multinational enterprises (M.N.E.'s) and elite industries. Other I.I.M. cases were more or less similar. However, not increasing the intake in their institutions may have resulted in a big demand-supply gap, as R. K. Gupta argues:

"Placement is the excuse they have found to create hype and cover their weakness as they have made little contribution to management theories. On the same coin, they use public grants but cater to a niche market of capitalists and multinational enterprises," Gupta says.

What percentage of their graduates joins the public or social sector? Electricity, health, education, transport, urban planning and rural development sectors are mostly mismanaged and this in need of qualified managers. However, it seems that the aim of current management graduates is to earn money for themselves in order to cover the expenses they have incurred acquiring their skills.

"The placement mania makes M.B.A. students regard jobs and salaries as the be-all and end-all of things," say Vivek Kaul and Hasan Ahmed. "This attitude is inculcated in very bright, young and impressionable students, right from the time they enter the B-schools. Instead of imbibing a spirit of idealism and developing a strong desire to change the world for the better, students leave their B-school after graduation totally obsessed with making money and progressing in their career."

As can be seen from the above, B-schools have a good rapport and interface with industries. Many of them also receive sponsored projects, consultancy assignments and internship for their students. Many of their former graduates are C.E.O.'s. As a result, some members of the faculty, especially those from I.I.M.A., are external members on the boards of many companies. This may also help them gain their practical knowledge.

Setting Up Overseas

After a great deal of public debate, on Feb. 2, 2006, the government of India allowed I.I.M.'s to open branches overseas after meeting certain criteria. I.I.M.B. is the first institute to open a branch in Singapore. The S.P. Jain Institute of Management and Research, in Mumbai, has had a campus running at Dubai since 2005 and a new Singapore campus is expected to be functional by 2006. Furthermore, the Institute of Management Technology (I.M.T.) in Ghaziabad announced that it would open a branch in Dubai this year. This overseas expansion is expected to generate extra revenues, resulting in a reduction of government grants especially for I.I.M.'s. Furthermore, by offering incentives, I.I.M.'s and non-I.I.M.'s alike may also attract talented faculty to improve the quality of teaching and research. Faculty will get good exposure to how business is conducted in other parts of the world and conduct quality research in a different culture. Globalization will promote Indian social, cultural and educational values and skills overseas, resulting in great respect and pride for the country.

World Ranking

The I.I.M.'s at Ahmedabad, Bangalore and Kolkata consistently have been ranked among the top by almost all surveys. Presently, Indian B-schools are ranked in India and Asia-Pacific, but when compared to global rankings, they fail to appear in the top 100 global B-schools in the ranking surveys of Business Week, Financial Times and Forbes. Even Chinese B-schools figure among the first 40 in these surveys. There is a strong feeling that the I.I.M. is a highly coveted brand and its M.B.A. program is overrated, especially that of the I.I.M.A.

Currently, no Indian B-school has international accreditation from the Association to Advance Collegiate Schools of Business (A.A.C.S.B.) or the European Quality Improvement System (E.Q.U.I.S.). The I.S.B. is currently just getting underway with the A.A.C.S.B. It is a long process but the I.S.B. is on track to be the first A.A.C.S.B.-accredited B-school in India. However, very recently, Management Development Institute (M.D.I.) Gurgaon has been accredited by the Association of M.B.A.'s (A.M.B.A.) in Britain, making it the first B-school to receive an international accreditation.


Certain critical issues face Indian B-schools in their quest to mold students using a holistic and fully integrated approach based on academic rigor, building character, and nurturing values and a curriculum for meeting industry expectations and the external environment. Among them, the I.S.B. has greater autonomy and flexibility because it is in the private sector and can pursue the goal of being the first world-class Indian B-school very soon compared to the I.I.M.'s, which are in the government's domain. The I.I.M.'s face frequent interference in their governance and autonomy matters, which throws a wrench in their functions, impedes rapid growth and creates barriers to raising the level of India's intellectual capital in the new era of the 21st century. Only by raising the level of intellectual capital, can I.I.M.'s achieve their dream. They must hold to the advice of F. D. S. Choi, emeritus dean of the Stern School of Business:

"The key ingredients to be a world-class institution are: (1) faculty commitment to research and teaching excellence; not one or the other; (2) a committed professional staff who understand higher education, (3) quality of students admitted; (4) financial resources and (5) leadership of the dean/director. If any one of these is missing, becoming a recognized world-class institution is not in the cards."

Prem Lal Joshi is a professor of accounting at the University of Bahrain and editor-in-chief of the International Journal of Accounting Auditing and Performance Evaluation.

View the Worldpress Desk’s profile for Prem Lal Joshi.