Sunday, February 19, 2012

Business dull, 65 B-schools across India to shut down

On the academic floor, the MBA programme was once supreme. Arrogantly and unambiguously, it became the final sign-off to schooling, attracting not only those interested in business but also all those who wanted to master the tools of management.

That hubris, thanks to its own profligacy, is now being shaken. The Indian management education sector grew so wildly when demand was rampant (today there are 3,900 management schools with close to 350,000 seats) that supply overshot demand by a long shot. And now comes the fallout.

In a dramatic, though not entirely unexpected, development, as many as 65 business management colleges across India are planning to close down; these institutes no longer see business sense in offering an MBA course, preferring to use the land for more lucrative ventures. Experts predict that many more management colleges will close down in the days to come. As S S Mantha, Chairman of the All-India Council for Technical Education (AICTE), puts it, "Colleges in remote India and institutes of poor quality are not getting students."

Bust after Boom
There are 3,900 management schools in India with close to 350,000 seats, indicating supply overshot demand Experts question quality of many colleges in remote areas. With no job offers, students shun them, prompting many to contemplate closure. Curriculum is far from reality. For the students who choose not to apply to any of these lesser-known colleges, the decision is a no-brainer: the curriculum is far from business reality, faculty is minimal and, most importantly, very few respectable companies participate in the course-end recruitment drives. At one time, the archetypal Indian MBA did join anonymous business colleges. But now with no job offer at the end, the decision is no longer complicated: a young graduate would rather take up a job or prepare harder for another shot at an entrance exam which is the gate to a better B-school, says Stephen D'silva, Director, Jamnalal Bajaj Institute of Management Studies.

However, while the lower-rung management schools are being bypassed, there are still tens of thousands who make a beeline to join an IIM (Indian Institute of Management). Pankaj Chandra, Director of IIM-Bangalore, boasts of the hundreds of thousands of students who sign up to take the Common Admission Test (CAT) for close to 3,000 seats that the IIMs have on offer. "It is a great time to do an MBA. The brightest ones still want to do an MBA," he adds.

Having said that, the manner in which India's business education sector has developed poses a vital question: Is the MBA for everyone? Across the country, academics, irrespective of the institute they are affiliated to, are relating to Henry Mintzberg of McGill University, Montreal, who devoted a book to his contention that "conventional MBA programs train the wrong people in the wrong ways with the wrong consequences". Mintzberg's line 'Warning: Not Prepared to Manage' has become a popular catch phrase in internal meetings that B-school boards and faculty members hold.

Source: The Economic Times (Online Edition), February 19, 2012

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