The author is former director- general, National Council for Applied Economic Research, and chairman, Central Electricity Regulatory Commission

The early Seventies saw frequent comment that MBAs (all post-graduate management diplomas and degrees) were arrogant, demanding of quick upward movement, unable to relate to non-MBA older colleagues, lacking in loyalty, and so on. The head of a management institute said that his students had four job offers even before they had finished their programme. Someone pointed out that there were fewer MBAs than the jobs available and hence this was not surprising. I remember saying that the management schools attracted the best and brightest in the country. The institutes did the difficult job of funnelling the best out of them; something that companies otherwise would have to do.

Selection from among graduated MBAs was much easier since they were the few selected from the many who applied. The recent survey of recruiters and students for rating business schools in the Economic Times of December 20, 2002 confirms this. Recruiters are attracted by the quality of the students. Students apply to one and not the other school for the better prospect of a well-paid job in a good company. It is a self-fulfilling prophecy, recruiters have for years come to, say, Indian Institute of Management (Ahmedabad), and the best candidates keep applying there.

This says something about the fundamental problem for management education in India. Good placement record is paramount in the minds of students and only a little less so of recruiters. Other factors that make for a sound academic institution, namely the extent and quality of research and publications, are neglected. According to the All India Management Association survey, good placement records of institutions may make them popular among students despite poor research and publication records of the faculty. Well-managed business schools are now offering incentives, rewards, and time for research and publications. These have helped raise the credibility of the faculty and of the institute. It is bound to reflect in better teaching.

“Recognition” by the All India Council of Technical Education is supposed to be based on the institution meeting a minimum set of norms in number of full-time faculty members, campus space, library, computers, and so on. But the understaffed and under-funded AICTE cannot inspect all or do it thoroughly. Many institutions get recognition without having the bare minimum prescribed by the norms. And yet, the fact that the government, that is, the AICTE, has recognized them misleads students into applying for admission to them. Many of these institutions are moneymaking rackets, with money sometimes being made under the table as extra charges for granting admission. The AICTE recognition misdirects the ignorant young community of students who depend on it for guidance. Conflicts of interest within the AICTE do not help. Management specialists, not engineers as in the AICTE, should oversee management education.

There was a rationale for universities setting up management departments (now amounting to three-quarters of the total). It was that universities could enable interaction with other social sciences. But such interaction never takes place. Management departments are set up because it is the done thing, management is a subject in which the best students are interested, opportunities for promotion are relatively easy for the faculty, and despite the low fees compared to independent schools, the university makes sizeable profits.

In any good university, despite the havoc wrought by caste considerations and automatic promotions, becoming professor in the natural or social sciences calls for some academic distinction. Not so in management, even in a university department and even less in others. Promotions are easy since there are so many professorial vacancies to be filled. With over 800 recognized management institutions, a mobile teacher, within three years of starting to teach, can expect to achieve a professorship and then a directorship. Despite such easy opportunities for promotion and for making money that other academic disciplines do not offer, management faculties in the larger institutions have low work loads, rare adherence to work norms and sparse research and publication. “Consultancy”, many times meaning teaching in-company programmes for high fees, is what they are all after. The mercenary instinct is dominant.

Education entrepreneurs abound, making excellent returns on investment (above and under the table) by setting up a deemed or private university or a “recognized” institution offering courses in management, information technology and engineering. Bachelor programmes in management are offered in universities which already have bachelor programmes in commerce. All over the world it is believed that management courses are best taught to people with some work experience, not to teenagers. But the University Grants Commission and the AICTE have permitted this attempt to follow the market instead of leading it.

Management is a subject that is experience-based. It must interact closely with the sector that it is teaching — whether industry, hospitals, arts or any other — how to manage. Management institutions that are unable to ensure this live interaction for students through the visits of practitioners, summer assignments, faculty research projects and so on, are not doing their job properly. Hence management institutions that have neither a substantial core faculty nor are situated close to the sector that they are teaching how to manage are unlikely to be offering useful teaching.

India has based its management curriculum and pedagogy on the American experience. Many skills and techniques in management learning are universal and applicable in any society or market. The American system is of great use in teaching these. But elements unique to individual societies must be taken into account in the teaching. For example, it is a common belief in marketing that consumers would pay extra for value. But in a country that consists of as many poor people as India, either we assume that the poor have no aspiration to consume, or we break the paradigm and consider how we can design the product for the consumer, offering him functional value but within his reach. Or there is the peculiar mixture of rationality, lateral thinking, superstition, and looking up to elders that is the make-up of almost any Indian. How must we modify teaching human resource development or organizational behaviour in order to take these peculiarities into consideration?

Managing governments is not unique to India. But India has a dominant culture of state-owned enterprises. These are not going to disappear for many years. All managers must expect that they will have to engage with such enterprises at work, even find employment in them. There is little American experience that is relevant to these differences. We must develop our own materials for the purpose. But there is little effort to do so after almost forty years of management education, and despite the fact that India has the second largest number of management schools in the world after the United States of America.

It is as true today as it was in the early days of management education in India that it is the calibre of students and not what is taught that makes for high placement records. That is a shame. We have developed an industry (management schools) that does little education but provides employment to faculties, makes selections easier for large companies, and is of no use to medium and small companies. Students come to management education, the industry knows the student quality and trusts the selection process to funnel the best from them.

Unfortunately, the integrity of the selection process itself is now being subverted in an increasing number of institutions. This is another cause for worry about the value of the institution for prospective students. Unlike technical education through the Indian Institutes of Technology, management education does not offer the best education to the best students. It has so far offered only the best students. Recruiters must select not only on the basis of a placement record but also on the quality of the teaching. Independent ratings are of use in doing so.