IMC 2013 Theme - Enhancing the Value of MBA: Read Theme Paper, Watch Keynote Addresses

Indian MBA education: Mega Trends & Emerging ‘Solutions’
India is perhaps the world’s largest MBA market with about 3,850 B-schools, including 283 PGDM Institutes, offering a whopping 3.85 lakh seats. However, the grim reality is that barring top 25 MBA institutes, most of the B-school face a huge demand-crunch, with more than 50% seats going vacant. Even at the top, we lag much behind our Asian peers like China and even Singapore.

A lot of negative press has painted a doomsday scenario for our B-schools. Indeed, it’s the bad news that gets all the media headlines!

There are several reasons for the current crisis, including the policy conundrum and inadequate focus on core product by the B-schools which mushroomed in the hey-days of 90s and have eroded credibility of the MBA education. We have explored the reasons for the current state in some detail in this theme paper.

However, there are also a lot of changes, and green shoots visible for those who wish to see the glass as half-full, and not half-empty. Many agile B-schools have quickly adapted to the changing landscape, updating their curricula, placement efforts, and adding a lot more strength to their marketing plans to cope with the challenges.

As only by looking beyond the current crisis lies the future of MBA education, we have chosen the theme for the 4th Indian Management Conclave Awards 2013 as “Enhancing the Value of MBA”. The theme explores the possible solutions to the continuing crisis.

But how does an organization like MBAUniverse.com offer ‘solutions’, which are relevant to our Indian market and can be replicated by B-schools & MBA Departments willing to change and improve?

It was apparent to us that the best ideas on the challenges that are facing Indian MBA education do not lie on a single place, or single organization or an individual. So we decided to create a robust platform for researching, documenting and highlighting the Best-Practices from all our B-schools & MBA departments at Universities who are doing good work, and ready to share it for the benefit of the larger community.

The process of researching and documenting the best-practices led to Indian Management Conclave (IMC) Awards. More on IMC Awards is described in the later part of this theme paper. But suffice it to say that the awards for and documentation of the ‘solution’ for improving the Indian MBA product has truly begun to shape the IMC Awards.

This theme paper for 4th IMC draws on the rich learning material analysed for the IMC Awards. The paper is organized into two parts: Part A deals with the state of current MBA education, and Part B offers a structure and an overview of the best-practices.

The Crisis Continues
The Indian MBA education is indeed passing through a turbulent period. While top B-schools are expanding capacity through addition of seats and new campuses, as many as 108 B-schools closed down in just 12 months in 2012–13.

The crisis is multifold: how to get filled up, what to teach and how, and finally, how to place the students.

In spite of the hype and expectations, well known foreign B-schools who dared to enter Indian market in last 3–4 years have burnt their hands. Many players like UK-based Strathclyde University’s B-school have closed down, and some are just waiting for tide to arrest. Even corporate-sponsored B-schools which have scale and insights, are facing tough challenges of admissions and placements.

Clearly, there is a lot of churn in the Indian MBA market.

What lead to this scenario? Let’s examine this crisis more closely.

Increase in supply:

Despite the concern on demand–supply mismatch, there has been a steady increase in the supply of MBA/PGDM seats. According to the AICTE, B-schools intake capacity has increased steadily over the past seven years, with number of seats in management education increasing more than four-fold. While the total seats approved by AICTE stood at 94,704 in 2006–07, the number went up to 3,85,008 for admission year 2012–13.

Is the demand for MBA also growing at the same pace? As the economy has slowed down since 2008, that’s clearly not the case.

Commoditization of MBA: Numbers vs Quality
According to the AICTE, in 2013, the number of PGDM institutes in the country is just 238, compared with 3,561 MBA institutes. So, the number of MBA institutes is almost 13 times the number of PGDM institutes.

This raises the question — how are 95% of MBA institutes performing on quality and output dimensions? Going by the top B-school rankings, the University MBA programs are unable to match up with their peers like IIMs or even PGDM B-schools.

If we keep IIMs & IIT B-schools aside, in spite of low numbers, PGDM institutes capture almost all of the top 100 spots in any reliable B-school ranking. FMS and JBIMS are the only exceptions.

This large universe of MBA departments faces twin challenges of deterioration in quality of “input” and “process”, which have led to a drop in employability of the MBAs being churned out by vast majority of B-schools.

Too many cooks spoil the broth? Need for a National MBA Education policy
If we classify 3,500 MBA institutions in the country, they will all come under two or three categories, with different types of MBA institutions. These different types of MBAs, offered under many institutional and regulatory frameworks, end up working in silos and sometimes at cross-purposes.