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Management education is one of the latest disciplines to arrive in the world of academia, just 100 years worldwide and less than 50 years on the Indian scene. It has emerged as a vibrant field for professional education, and is today one of the most preferred choice for higher education among the young men and women of our country. Owing to the huge leaps that India is making on the economic front, its demand will rise further, and hence its qualitative growth needs serious attention.
The paper begins with providing the current context in which management institutions are operating, and uses this context as well as inputs from senior industry executives to identify the most important and valued qualities that a manager passing out from the management institutes needs to possess in the present scenario.
Further, the paper lists a series of reforms that are needed in order to ensure that management education in India remains relevant, accessible, and competitive while at the same time, to prevent deterioration in the quality of education and facilities provided. Given the confusion and debates around the role of the Government in management education, the paper goes on to chalk out the regulatory and funding role that the government must play, without transcending the autonomy of the management institutions. While the global context has been taken into account while formulating the reforms, special care has been taken to ensure that the products of these management institutes are sensitized to, aware of, willing to and able to operate successfully in the Indian scenario. Re-kindling the spirit of entrepreneurship among budding managers is also one of the major challenges that the paper attempts to overcome through the suggested reforms.
The reforms suggested through this paper aim at resolving the challenges and problems plaguing management education from the point of views of all the stakeholders involved - students, institutes, regulators, government, hiring companies and the society at large), thus resulting in a higher level of ubiquitous stakeholder satisfaction.
A roadmap has also been suggested for the purpose of implementation of these reforms. The roadmap classifies the suggested reforms into "Macro Level" reforms and "Micro Level" reforms, and presents the roadmap for the implementation of both these sets of reforms.
The paper concludes by outlining the prospective benefits that the implementation of the reforms shall yield, the possible roadblocks that could be encountered and also the plausible limitations of the reforms suggested.
MANAGEMENT EDUCATION IN TODAY'S DYNAMIC GLOBAL CONTEXT
Management education, even more than other courses needs to be highly context-driven. This becomes especially challenging in the current dynamic global context, which entails wide and highly interconnected global trends, whose impacts are beginning to surface. Some of the most prominent such trends include the demographic change, an impending eastward shift in the power axis, urbanisation, rising inequality, degradation of corporate governance and business ethics, increasing scarcity of natural resources and also the degradation of ecosystems - water systems, forests and the climate.
A large part of our economy as well as the various industrial processes are still stuck within the context of the technological innovations of a period when we looked around and saw abundant natural resources and proclaimed 'man's triumph over nature'. This mindset has seeped deep into the roots of all the business processes as well as associated business models, leading to exploitation of these now fast depleting and extremely fragile ecosystems. The new narrative of this context that is now emerging, is that of sustainable development, and businesses as well as industries have already taken heed to and are acting upon this change in context.
Globalization is another phenomenon which has drastically impacted the context of business as well as management, having further broadened the context - from national to global horizons. This has resulted in globalized capital flows, access to global markets, breaking down of trade barriers and protective legislation leading to increasing competition from global players, a highly interconnected world where the decisions taken in one part of the world do have far reaching impacts on the lives and actions of millions in a distant land. The advent of radical innovations in the field of technology and communication has resulted in the 'death of distance'; which has again had a drastic impact on the processes and functioning of businesses.
In a bid to survive in this dynamic global context, we see organizations adopting new business models, new products and services being offered by the businesses, as well as new operational practices in order to cope with the increased competition and changing customer mindsets. Management education institutes, which are the breeding ground for future thought leaders of businesses, need to be attuned to these changes that are occurring in the business environment and need to be flexible enough to alter their offerings, making them more in conjunction with the global context and the emerging trends.
In order to make sense of the dynamic environment as well as to operate successfully within it, apart from the need for ethical and value-led behaviour, the following three clusters of additional learning are essential for managers entering the business world today.
Source: Developing the Global Leader of Tomorrow, Ashridge and EABIS for the UN PRME, 2009
Managers entering business need this, in order to understand and to be able to respond to changes in the external environment. An understanding of business risks and opportunities of social, political, cultural and environmental trends is essential, along with understanding how the other stakeholders - suppliers, customers, investors, regulators and competitors - are responding to as well as influencing these trends. This awareness needs to be integrated into the decision-making of these managers. As seen from the narrative above, there is also a need to align the environmental and social objectives with the financial goals of the organizations.
This learning is essential for managers, since it enables them to engage and to build effective relationships with external partners as well as stakeholders, to understand the reciprocity of the relationship that they share with the organization as well as to share a personal connect with diverse social communities and networks, as is essential in the highly interconnected context today.
Given the dynamic nature of the operating environment, this learning needs to be ingrained in managers in order to ensure that they possess the skills to survive as well as to thrive in situations of high uncertainty and low agreement. This includes the ability of managers to be flexible in their approach as well as to be responsive to change. The ability to balance short-term and long-term considerations needs to be developed and honed, as well as the ability to find creative, original and innovative solutions to problems.
Thus, management education and business schools have a significant role to play in accelerating the adaptation to a global context, by ensuring that the managers entering the business world are well-equipped with the aforementioned arsenal in order to enable them to survive as well as thrive in such a dynamic environment.
MAJOR REFORM AREAS - INDIA CENTRIC FRAMEWORK
Curriculum & Pedagogy
"Education with inert ideas is not only useless: it is above all things, harmful" - Whitehead 1932
In the absence of other accurate, reliable and relevant data; students, faculty and employers judge management institutions on the basis of the placement figures and salaries offered. This has forced bright young minds to look at earnings and wealth as the true barometer of worth and this has an indelible impact on their perspectives and decision making in the future when their decisions have large repercussions. On the face of it, the content and quality of the teaching and the pedagogy has lost its relative importance for the stakeholders of management education.
Management education, as it is currently taught in business schools, took birth in the United States and though quite a few of the concepts can be universally applied (and these are becoming even more important given the waves of globalization), there are certain aspects which need to be tailored in order to form a better fit for management in the Indian scenario. This is where most business schools have been lacking thus far. We need to identify a way in which Indian managers are taught management concepts that are congruent with the cultural contexts of the society in which they will operate. The managers in the Indian business schools need to be exposed to the reality of Indian markets with the differential development of consumers such that they are also sensitized to the consumption patterns as well as the needs of the rural poor, who are increasingly been looked at as the next growth drivers across industries.
In order to build in the Indian perspective into the curriculum of business schools, one of the most potent solutions would be to undertake massive case writing and teaching programmes so that experiences from the Indian industry are studied in the classroom. In order to conduct programmes on such a scale, funding can be sought from the government, in a bid to making the management curriculum relevant for India.
Business schools must also be wary of the fact that post-crisis the world will not return to normal and thus they must make a critical estimate of the behavioural as well as structural dimensions of this profound change that is occurring in the global economy and prepare a curriculum that accordingly fits the times. The challenge for business educators is to prepare students in order to see these possibilities for the future.
Given the preponderance of sustainability in the business context, it needs to be incorporated within the curriculum of business schools. However, superficial teaching about the ecological risk is not sufficient, and faculty should focus on shaping the new systems thinking that is an essential aspect of tomorrow's business. The importance of sustainability in the corporate world today, in the views of the CEOs is evidenced by the graph below:
The pedagogy in business schools also needs to be revisited. The focus is often on honing the ability of the student to retain knowledge rather than practical application of the concepts and learning. This approach works well in the formative years of schooling, however in the case of higher education, and especially with this being the information age, where any information that we desire is available at the click of a button, the need is to move away from this model and opt for a more hands-on approach to learning.
Despite the lure of lucrative salaries and an intellectually stimulating career, there is a dearth of top quality research coming out from business schools in India. A sad truth that emerges is that there is very little original conceptual or applied work that is being produced by the more than 5000 management faculty in the country. At the same time, it is ironic that Indians are also the management gurus of the world, with C.K. Prahalad, Ram Charan, Jagdish Seth and many others are in great demand by the largest and most successful companies in the world. All these management thinkers are however working outside India. Faculty members in most Indian business schools do not have comparable reputations. One of the main reasons for this is that there is little pressure on them to conduct and publish original research and cases. Another plausible reason for this is that there is very little funding available for this purpose. Thus, large funds need to be allocated to upgrading the skills of faculty through regular training, testing, research funding and case writing.
Role of the Government - Regulation & Funding
Management education in India has developed thanks to the vision of the governments in the past that took the lead by setting up the IIMs. However, some time back, there was great furore in the media when the Central Government decided to intervene and to try and force the top management institutes in the country to reduce the 'exorbitant' fees that they charged. The argument put forth that such a tall fee structure made these institutes inaccessible for the financially less privileged. This debate over the fees, particularly in the case of the high-profile IIMs, diverted attention from the more basic issues facing management education in India, in which the government has a leading role to play. With the huge demand for the pass-outs from these management schools, the salaries that are offered to them are more than sufficient to pay off any loans (which are again offered on a platter to the students that get into these institutes). The government rather needs to spend the resources at its disposal address the problem of bright, young students from socially/economically backward classes lacking the confidence in their ability to compete in English as well as the lack of social skills of the young from these backgrounds. The government needs to scour the country for such talent and give them remedial training to ensure a level playing field.
At present, the management cadre being produced by the business schools are predominantly focussed on the very traditional and 'safe' specializations, resulting in a neglect and gross lack of management expertise in other sectors. Some prominent stand-outs in this regard are the non-governmental organizations, co-operatives and organizations in art and culture. Since these sectors do not offer high salaries, the students find it financially unviable to pay such high fees in order to pursue a management course in such sectors. The government can step in and use its funds to support these courses by offering scholarships for tuition fees, boarding and lodging.
The role of the government in management education should be that of an active regulator, with the ability to take hard decisions as and when needed. It should however not interfere with the operational part of running business schools, since this autonomy will enable the schools to rapidly adapt and tailor their offerings to any changes in the dynamic global context that the businesses of today are operating in. However, the government has performed this role as a regulator very poorly thus far. More than 80% of the business schools recognized by the AICTE are not accredited by the National Board of Accreditation (NBA), which is a clear indication of overall poor quality in terms of non-existent libraries, poor computer availability, faculty that is quite unsuited for the work, high fees and poor industry linkages. The AICTE however, has taken no action to de-recognize these institutions, often succumbing to the pressures from well-connected promoters.
Given the plethora of management institutions across the country, students have minimal academic information about the quality of the institutions and the facilities they provide, only having the placement records which are highly deceptive at their disposal, which makes it impossible to make an informed decision, the uncertainty resulting in the brand affiliation that the IIMs enjoy. The AICTE has this data, and must be funded by the government to make this data available to the students to enable them to take a rational decision.
Thus, the government does have a vital role to play in the field of management education, but it must do so as a concerned external stakeholder and a strong, fair and stringent regulator adopting a holistic approach and must distance itself from the functioning of the institutions.
The following aspects also need to be incorporated as part of the curriculum in business schools:
Management skills that emerge as the greatest need and deficiency of business curricula after detailed interactions with alumni and corporate recruiters
Curriculum should place greater emphasis on skill development for global assignments including the sensitivity and flexibility in responding to local conditions; as well as managerial effectiveness in dispersed operations.
Need to set up a task force of business and academic leaders to identify core management skills that span traditional functional areas of expertise and can prepare managers for global adaptability.
Boundary-spanning content, diversity of participants and deliverers, and, alternative pedagogical approaches, and ensuring that business school structures continuously evolve from closer discourse between schools and their business and local market constituencies.
Most business schools in India have a compulsory 2 month internship incorporated as part of the curriculum. The idea behind this internship is for the students to get exposure to the corporate culture and to the work that they would be doing in their field of choice. While the thought process behind this idea is correct, the exercise falters because the period of 2 months is too short a duration for the student to actually experience the work and the corporate environment. Moreover, even for the company to truly assess the true worth of an individual, it becomes essential to have the intern on board for a longer period. A large number of business schools in Europe incorporate a 6-month internship period at the end of the course, which can then be extended depending upon the mutual agreement of the intern and the company concerned. This also enables the company to offer some meaningful, substantive and real-world projects to the interns, which prove beneficial for both the company as well as the intern.
Source: Developing the Global Leader of Tomorrow, Ashridge and EABIS for the UN PRME, 2009
As is evident from the graph above, CEOs and senior executives send the clear message that a broad range of learning approaches are needed. From interviews with these senior executives, it was gathered that in order to confront, analyse and resolve complex issues, the most effective learning and skills development comes through practical experience, be it on-the-job, project based or experiential. This is where internships for prolonged durations (at least 6 months) play a crucial role in enhancing the skill set of the students, making them job-ready.
Fostering Entrepreneurial Spirit - Get "Jugaad" to the fore
For a rapidly developing country like India, there is an urgent need to generate employment. This is a need that can be fulfilled by students passing out from business schools, who have acquired the requisite business know-how. Programs must be developed to demonstrate new ways to integrate the social and the economic mission. It has been seen that less than 2% of students in business schools in India opt for entrepreneurship as a career. The reasons cited for this is the high risk factor associated with these business ventures. This when coupled with the prospect of paying off astronomical educational loans and increasing peer and social pressure to earn huge salaries, forces many budding entrepreneurs in business schools to give up their dreams and to settle for a mundane job.
India is a country which is known for "Jugaad" - the ability to innovate and come up with creative, workable and inexpensive solutions to problems. The educational system, including that in business schools is stifling this inherent quality of Jugaad amongst the bright young minds of our nation. Instead, the business schools should work towards fostering, supporting as well as honing / polishing these skills through specialized courses in entrepreneurship, so that they can be of use to the society as well as for the growth and success of the entrepreneur himself. This has been started in some of the business schools within the country which are hosts to incubation cells where these entrepreneurs can initiate their ventures as well as have access to all the amenities required.
This entrepreneurial spirit in business school students is ironically a much desired trait when companies come to recruit students. During interactions with the Prof. Jacqueline Fendt, Chair in Entrepreneurship at ESCP Europe, it emerged that companies are looking to recruit people with this entrepreneurial drive, since they act as "change agents" within the company that they enter, constantly striving to challenge the norm and their drive and energy towards causes that they believe in can be infectious. Thus, the students which are the products of such courses in business schools will be much sought after within the corporate world as well, where they will function as "intra-preneurs". These specially designed courses must encourage students to move away from the traditionally re-enforced "Resource Based Thinking" to "Opportunity Based Thinking".
Centralized Screening Test
Currently, there are far too many admission tests for management education. These tests impose a heavy burden on the young students who need to appear in many such tests in order to ensure admission into some institution of their preference. Through these tests, the state governments or private institutions that run them do make tidy profits, however that is no reason for letting students be so over burdened. Moreover, the structure and content of these tests is heavily skewed towards the quantitative perspective, which offers a clear advantage to engineers. Thus, the make-up of the classrooms in business schools is indicative of this selection bias that sets in at the screening stage. This defeats one of the primary sources of learning for students at a business school which is "peer learning", since the diversity in classrooms is not maintained. More emphasis must be laid on the soft skills and other non-quantitative skills of students as selection criteria for entering business schools, since man-management is one of the primary tasks of a manager.
De-Commoditize Management Institutes
As is illustrated by the diagram below, management institutes have mushroomed in India owing to the lax eligibility criteria for the same set by the AICTE. This criteria since then has been made more stringent however, it has led to a vast sea of management institutions with minimal differentiation in the minds of the students seeking admissions or the companies looking to recruit, owing to lack of data at their disposal. The confusion that results, leads to companies relying on the brand of the institution to make the selection decision, which explains why marketing and branding of management institutes plays a vital role in determining their success.
In order to ensure that the correct perceptions of business schools are developed in the minds of the stakeholders mentioned above, there is a pressing need to introduce a single, transparent and credible ranking encompassing all factors, would help in making the stakeholders take an informed and rational decision. Accreditations also go a long way in establishing the credibility of business schools and once this singular nationally applied ranking system is in place, it will ensure that the business schools work towards this effect.
Diversity Through Global Exposure
Though some of the top business schools have initiated Exchange Programs with partner universities across the globe, the phenomenon is yet to percolate down to all the business schools in the country. As we had seen in the context, global exposure is a must since the managers that leave business schools will be operating in a globalized environment, regularly interacting and working with people from all across the world and from different cultures. Thus, there is a need to develop the requisite skills for the same during the years one spends in a business school. Thus, business schools must be encouraged and cajoled (incorporating global diversity as a parameter in the rankings will provide incentive) to initiate tie-ups with other business schools around the world, for student and faculty exchanges as well as collaborative development of intellectual capital through research in shared teams.
ANALYSIS OF SUGGESTED FRAMEWORK - BENEFITS & SHORTCOMINGS
One of the major advantages of the reforms suggested above are that, once implemented, over a span of time, it will lead to a consolidation in the management education industry in India and also a resultant marked improvement in the quality of education imparted in the institutes that survive; since owing to the transparent and fair ranking systems and stringent regulations, fewer business schools will be able to attract and shape the aspirations of the brightest of minds. Since there is a huge demand for management students however, we shall see the larger institutions expanding domestically by creating multiple campuses and some may also go in for campuses abroad; leveraging their brand and reputation.
Also, the strategy to globalize through diversity in faculty and students will enable the business schools to forge effective networks among institutions across the world. This networking will enable the business schools to be globally oriented; however care must be taken while partnering with the foreign institutes to ensure that the institutes do bring some distinct value-additions as part of the partnership.
The reform that aims at limiting the number of screening tests - probably only one centralized screening test for all management institutions to act as the first selection filter - will apart from reducing the burden on the students, also provide quality testing service, rooted in rigorous research and establishing a causal relationship between test performance and performance in the MBA course.
With the Indian economy growing at a rapid pace, the demand for management education will consistently remain high. However, the nature of this demand will undergo a change. A trend that the framework provided in this paper does not account for, is that of large corporations asking the management education institutes to customize their course offerings, tailored to the specific needs of the particular needs of the organization. Also, in case the trend of online education being imparted in management institutes catches on (highly unlikely given that peer learning and participation is such an integral part), then the reforms suggested with respect to diversity in class and globalization, becomes redundant.
ROADMAP FOR IMPLEMENTATION
The reforms that have been suggested can be categorised as those that need to be implemented on the macro level by management institutes and associated bodies and those reforms that need to be implemented at the micro level by individual institutes by themselves.
The IIMs and other top management institutes in the country need to take the lead in implementing the macro reforms mentioned above, since the other institutes in the country will follow their lead, as they have done in the past. The IIM brand will lend credibility to the efficacy of the suggested reforms, thus setting off waves of acceptance by the other institutes as well, in order to try and model their structure and curricula on the lines of that followed by the highly successful IIMs. Since the IIMs do not have complete autonomy yet and might not be able to implement the entire set of reforms at one go, some of the leading private institutions like S.P. Jain, XLRI, MDI etc. can take the lead in implementing these.
The Micro Level reforms will need to be taken up individually by the management institutions on their accord, since the same depend upon the local conditions that prevail.