300,000.
That is the approximate number of aspiring managers who want to join India’s business schools every year.
After a roller-coaster ride during the Covid-19 years when hybrid and blended learning modes kept business schools busy, MBA is at an inflexion point in India. As businesses are dealing with new and emergent contexts, India’s leading business schools—from Ahmedabad to Kozhikode—are initiating conversations on reimagining and rethinking the coveted postgraduate degree in business management.
This comes at a time when, globally, the charm of MBA is fading. In 2023, the number of applications to graduate business schools fell by 5%, over 2022, according to the Graduate Management Admission Council, which owns and administers the Graduate Management Admission Test (GMAT). Meanwhile, India is going in the opposite direction. It had a record 3.3 lakh students registering for the Common Admission Test (CAT)—the highest in the history of the entrance examination, which started in 1977. Around 2.88 lakh candidates wrote the exam in November.
An MBA degree is as pricey as it is prized. The tuition fee for a two-year MBA course at a leading Indian Institute of Management (IIM) comes to about Rs 25 lakh. For the 2023-25 batch, the fee is Rs 20.5 lakh at IIM-Kozhikode, and Rs 24.5 lakh at IIM-Bangalore.
Indians are lapping up online business degrees as well. India has the second highest number of learners enrolling in business degrees on Coursera, next only to the US. In 2023, there was a 30% year-on-year rise in enrolments in business courses among Indian learners, shows data from Coursera. Globally, this was 18%. IIM-Ahmedabad’s courses on Leadership Skills and Pre-MBA Statistics on Coursera saw over 200,000 learners within seven months of the launch —of them, 172,000 were from India.
There is also a consistent clamor from India for Ivy League degrees despite concerns about the high cost of their top MBA programmes—tuition fee for a two-year MBA at the Harvard Business School is upwards of $150,000 (Rs 1.25 crore). Last year, Admissions Gateway, an education consultancy focused on foreign universities, saw over 140 Indian students going to the M7 business schools—Harvard, Stanford, Wharton, Kellogg, Chicago Booth, Columbia and MIT.
Rajdeep Chimni, cofounder of Admissions Gateway, says often the demand for top MBA programmes runs contrary to the strength of an economy. When the economy is strong, less people go to B-schools because there are better job prospects. When the economy is weak, more people go for MBA in the hope that the economy would recover by the time they graduate. “Top 15 programmes globally remain popular but beyond them, students are showing preference for flexible formats like hybrid or part-time MBA,” says Chimni.
Vibha Kagzi, founder of education advisory firm ReachIvy, is getting a steady flow of queries and sign-ups for foreign MBA programmes. “Students understand the value of an MBA from top global schools. The networking opportunities and placements are the best in the industry.”
Degree of Separation
Why is the India story different from the rest when it comes to MBA?
Rishikesha T Krishnan, director and professor of strategy, Ram Charan Chair in Innovation and Leadership, IIM-Bangalore, says, in the context of management education, the outlook in India may be different from that of the developed world. “India is well placed to strive for at least 7-8% economic growth per year for the next two decades. Such rapid growth will need significant managerial capacity and capability. Management education, specifically MBA programmes, has a critical role to play in making this capacity available.”
Says IIM-Ahmedabad director Bharat Bhasker: “India stands at a vantage point with its demographic dividend and its soaring economic growth curve. Our government is working towards realising the dream of becoming a $5 trillion economy in the next few years, which opens up innumerable avenuesfor young talent to grow and thrive.” Another major factor that has come into play is that Indian businesses are increasingly going global, which means there is a surge in the requirement for efficient managers and leaders who understand the global industry, adds Bhasker.
Hence the rush to acquire management skills. The trend will sustain, says Debashis Chatterjee, director, IIM-Kozhikode. While the GDP of US and China is $25 trillion and $18 trillion in 2022, respectively, the economies are growing slower than India. India stands fifth in world economies with a GDP of $3.39 trillion in 2022. In terms of trajectory, the growth of the Indian economy is comparable to that of the Chinese economy in 2000-10, says Chatterjee. “There is a need for greater managerial talent to support this growth. Hence, you see a significant rise in the number of applicants for an MBA programme,” he adds.
Moreover, Indians put great emphasis on competitive exams like CAT, says Arvind Sahay, director, MDI Gurgaon. The rigorous selection process and the aspirational value attached to securing admission to top-tier institutions fuel the high number of applicants.
Recruiters at top companies say MBA grads are key to their business strategies. However, they have a wish list for what their future managers would look like.
Across B-schools, fast moving consumer goods bellwether Hindustan Unilever Limited, also known as CEO factory, is one of the most sought-after companies to work for. Anuradha Razdan, executive director, HR, HUL, says, “The foundational skills built at a business school enable students to land successfully in their early careers and the big roles we assign them. However, I do see scope for the curriculum to be more sharply focused on two fronts—in enabling students to have a better appreciation of sociopolitical and macroeconomic trends that impact business realities, and in embedding digital literacy that will help students stay ahead of the curve.”
The company already has a flagship management trainee programme (Unilever Future Leaders Programme), which offers students an accelerated learning environment. “We see digitisation, premiumisation and sustainability as the three big trends that will have a lasting impact on the FMCG industry, and we have already pivoted our programme to have electives and differentiated track around these, thereby ensuring we are building the right talent pools for our business,” says Razdan.
Richard Lobo, chief people officer, Tech Mahindra, says while MBA programmes have been successful in providing a strong foundation in traditional business principles, there is a need to enhance the curriculum to meet the demands of the modern business world. “To be more effective, MBA programmes should focus on incorporating interdisciplinary approaches that bridge the gap between business and technology, emphasising real-world problem-solving with a focus on new-age technologies, ESG, sustainability and climate change. By doing so, the programme can equip future leaders with the necessary skills, perspectives and knowledge to navigate the complexities of the modern business environment.”
This is something business school leaders have started to hear often. Recently, a technology leader at a retail bank told IIM-Kozhikode’s Chatterjee that he was trying to drive an artificial intelligence (AI) mindset in his organisation. Hand-in-hand with this were education investments towards the same. The expectation? MBA grads would bring these skills and mindsets to the table.
“He was looking for value creation rather than just knowledge of AI and analytics. How do you apply tech to accelerate value creation? The creative application of that is more important than the knowledge of AI,” says Chatterjee. “That’s where an MBA can come in—to preempt the impact of change. That’s what the industry wants.”
Course Correction Business schools are stepping up to the challenge, and rebooting what they teach and how they teach. Indian School of Business, which has campuses in Hyderabad and Mohali, is working on pedagogical innovations so that students will have a lot more hands-on and experiential learning. “The curriculum is designed to prepare students on how to learn to learn where the learning continues beyond just one year in the programme,” says Ramabhadran Thirumalai, deputy dean, academic programmes, ISB.IIM-Kozhikode is making two types of changes. First, it plans to use multiple channels, including immersive experiences and simulated environments, apart from classrooms, to strengthen learning. Second, there is a shift in focus in the curriculum towards AI, sustainability, business models for digital economy and leadership in uncertain environments.
IIM-Indore now offers electives in cryptocurrency, metaverse and cybersecurity, along with an elective in technology management and innovation in organisations. It has also joined forces with IIT-Indore to offer a master of science in Data Science and Management. Says Himanshu Rai, director, IIM-Indore: “Today, business models are being rapidly transformed by technology, data analytics and AI. Therefore, B-schools must adapt by incorporating courses in digital transformation, innovation and digital marketing to equip students with the skills needed to navigate and thrive in the digital economy.”
Technology is only one part of what companies are looking for. S Venkatesh, group president-HR, RPG Enterprises, says not all MBA students have the skill sets to hit the ground running. “We are looking for MBA programmes to teach them the softer aspects: ethics, how to be more resilient, how to manage people from different socioeconomic backgrounds, etc. Campuses need to focus on that,” he says.
B-schools also need to interact much more with corporates, he says. “Right now there is too much focus on placing students and getting the right salaries. They need to get industry leaders to visit more often, speak about their journeys and give more feedback. Such interactions will help institutes understand the gap and figure out what they need to do better,” says Venkatesh. Daljeet Singh, director, Centre for Management Services, All India Management Association, says the curriculum is not changing as fast as it should nor is it really happening beyond Tier-1 and -2 institutes.
Education experts like Narayanan Ramaswamy, national leader (education and skill development), KPMG India, predict there will be two parts of management studies. “One part is where you are creating managerial talent—which is where IIMs and other such reputed management institutions come in. The other part is more like specialised training courses—which are also very important because they fulfil the need for employable resources and help create genuine management cadre people. In my opinion, specialised MBAs—without a strong part 1—are a bit of a fad,” he says.
By Sreeradha Basu & Saumya Bhattacharya
https://economictimes.indiatimes.com/jobs/fresher/makeover-of-business-administration-indian-b-schools-adapt-for-tomorrows-challenges/articleshow/108736609.cms
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