From V-Schools to B-Schools : A Research Agenda

With an obsession with placements, Business schools in India -- IIMs not excluded -- have degenerated into thinly disguised placement agencies or at best glorified vocational schools. The compartmentalisation of B-school curriculum into the four principal management functions, namely Finance, Marketing, Human Resources and Systems and Operations reflects this mindset. These are the four principal kinds of tasks that a manager is expected to perform and B-schools pat themselves on the back if they can teach these four skills to the satisfaction of the recruiting companies. [ Though in reality, companies that hire from B-Schools do not seem to care for even this skill ...] Unfortunately, this puts B-schools in the category of vocational schools or V-schools

If we draw an analogy with engineering schools, this approach would mean that students are taught workshop practice -- chipping, fitting, foundry, welding -- assembling circuit boards or laying out wires for electrical circuits ! But an engineering school teaches much more ! From mechanics, through thermodynamics, control systems, logic gates all the way up to engineering mathematics and algorithms. This is the kind of knowledge that separates an engineer from a technician and by extension the kind of approach that separates an IIT from an ITI !!

So if we wish to move from an ITI to an IIT, a V-School to a B-School, what is it that that should be on the curriculum ? One approach would be replace the current four areas with four other more fundamental ones : Leadership, Mathematics, Psychology and Technology.



But before we adopt this approach we need to understand how these four things map into and support the more traditional areas. To do so, let us dig deeper into what is meant by these four areas.

Leadership in the context of B-schools consists of Entrepreneurship -- which could be traditional entrepreneurship as in setting up new businesses but should also extend to entrepreneurship within a firm, or intrapreneurship, where each business unit operates on its own risk-reward model. However this entrepreneurship should be tempered with Ethical behaviour and a strong focus on Equity -- that ensures that the rights of all stakeholders are adequately protected. So Leadership can be defined in terms of Ethics, Equity and Entrepreneurship.

Managing a business calls for both analytical -- or left brain, and emotional -- or right brain, skills. That is why managers are expected to have both IQ as well as EQ. Mathematics in general, represents the core analytical ability and in a B-school context can be translated into modelling techniques that apply to financial models, optimisation models that lead to operational efficiency and models that apply to marketing and sales. On the right brain side, where one has to deal with human beings, the core skill is Psychology that can be used to understand Consumer Behaviour, Organisational ( and employee ) Behaviour and of helps us to understand the laws that lead to the resolution of disputes.

But in today's business environment, the biggest driver is the development and deployment of new technology. What are the key technologies that a B-school should focus on ? Ever since the discovery of fire, Energy is recognised as the key to growth. Food security and health issues force us to focus on the Life Sciences in general and Bio science and bio engineering in particular and Habitat requirements lead us to seek breakthroughs in Materials and Manufacturing. The last, but not the least, that ties all this together is Communication and Collaboration technology that has traditionally been referred to as Information Systems.



This sixteen areas (a) Leadership, Ethics, Equity, Entrepreneurship (b) Mathematical Modelling, Financial Models, Operational and Optimisation Models, Marketing Models (c) Psychology, Consumer Behaviour, Organisational Behaviour, Dispute Resolution and (d) Communication and Collaboration, Life Sciences, Materials & Manufacturing and Energy could represent the core set of knowledge that any Manager ( as opposed to a supervisor ) should possess or build upon. With this model, it is not at all difficult to accommodate all the four traditional disciplines, namely Finance, Marketing, HR and Operations, quite easily within one or more of these sixteen areas.

Interestingly enough, these 16 areas can be grouped into a traditional Magic Quadrant where the left half represents left brain activities and right half represents right brain activities and as we move from bottom to top we move from specific topics to more general ones.



A typical B-School curriculum consists of 32 courses spread across 4 semesters. 16 of these courses could come from these areas while the other 16 could be distributed across specific electives that delve deeper into one or more of these areas.

In an era when a B-school is judged on the basis of its Industry interface and in its ability to turn our "industry ready" managers, this model may be questioned and criticised on being too theoretical and divorced from what the industry needs. However let us understand that just as industry needs both engineers and technicians for engineering functions, it also need supervisors and managers for business functions. IITs provide engineers, ITIs provide technicians. Similarly high end B-schools should build Managers who can provide leadership in thought and action -- not supervisors who know how to calculate loan EMIs.

B-Schools and the Placement Syndrome

Why do students queue up to get into B-Schools, especially the more well known ones ? And why are some B-Schools more well known than the others ? Both questions are in fact two sides of a more fundamental question - what value does a B-School bring to the table ? and the answer to both questions can be found in the placement history of B-Schools in general and specific schools in particular.

Students join B-Schools because they believe -- and in many cases, quite rightly, that it is a ticket to a high paying job and some B-Schools are more well known than others because their students end up with more, better or higher-paying jobs.

But why blame B-Schools for this trend. In the 70s, 80s and even as late as the 90s when unemployment was the dominant feature of the economic landscape of India, students would throng the gates of the Engineering schools because because that was seen as the most sure shot ticket to a good job. Students who had neither the inclination nor the aptitude for engineering scrambled to become engineers because of the job prospects. Today, when other opportunities exist in the field of finance, retail, media, life sciences, entertainment, the collective memory of the Indian psyche still drives students to engineering -- but the craze could be ebbing somewhat.

But the craze for a badge from a B-School continues unabated and to keep up with this demand we have an increase in the supply of B-School seats, both at private schools as well as at public sector schools like the IIMs and IIT, plus of course the corresponding expansion in the ancillary industry of CAT-coaching classes.

Which brings us back to the question ... what role does a B-School play ? or rather let us ask a related question : what role should a B-School play ?

Does a B-School add value to a student ? Is he or she taught anything that is of use to the company that hires the student. Any B-School would like to believe that it is adding a lot of value to the student in terms of knowledge and capability but a quiet and anonymous questionnaire among students might reveal some startling facts. Quite a few students tend to have a very poor view of most of their teachers and view the fact that they have to sit through their classes as the price they must pay for getting that ticket to that great job !

So is the view in many of the companies that recruit these B-School students. But if they do not really care for what is taught in B-Schools why do they pay higher salaries to these students ? One widely accepted answer is that these B-Schools provide a good screening tool ! Students who have managed to crack the CAT, JMAT, XAT or similar tests -- whether by aptitude or by hard work -- are just the kind of people who are likely to thrive and prosper in the corporate world. Thus the B-School is not a place that adds value to a student but an effective screening tool that makes the job of selecting employees easier !

Thus from both perspectives -- that of the student and of the recruiter -- the B-School is nothing but a placement agency, but is that what it should be ? Placements are important no doubt but should B-Schools not raise themselves above this mundane role of screening-and-placing students and consider something more substantial for themselves ? For example should B-Schools not play a role in creating new knowledge ? in terms of business models, best practices and in terms of new technology. Should they not establish themselves as centres of thought leadership and guide the national debate on economic and social matters ?

Unfortunately, each and every B-School in India today, including the best known ones, have reduced themselves themselves to the level of placement agencies. At best some of them have managed to elevate themselves to the level of teaching shops -- that teach some tools of the trade, like linear programming and balance sheets.

What is really missing is the big leap of imagination, of innovation, of ideas. Is it not the time for some of the B-Schools to step forward and plug this gap ? And strangely enough once this happens, once we take our eyes off placement and salaries and focus on genuine thought leadership, placements and salaries will fall in place, on their own -- and not be the tail that wagged the dog !

Modelling Education Reforms on the Financial Sector

Pratap Bhanu Mehta's article in the Indian Express on the devil being in the detail of educational reforms is very interesting. It makes us look around for successful models and one that strikes the eye is obviously the Stock Exchange mechanism -- that is perhaps one of the most successful model that has emerged from Indian reform process. To see if this model can be used as a reference, let us see some of the regulatory issues that a "company" needs to address before it can transact business and earn money.

At its minimum, a company must adhere to the conditions of the Companies Act and register itself with the Registrar of Companies. We note that the RoC does not really approve or reject the application on the basis of the quality of the companies products or that of its promoters. All that the RoC ensures is that the company meets certain basic disclosure norms in terms of ownership and financial issues. The focus is on accurate disclosure -- or transparency -- not on the actual facts and figures that are being disclosed.

As the company gets bigger and needs access to more funds, it seeks listing in a stock exchange. A stock exchange is not a monopoly government organisation -- it is run by its members as per rules that dictate a certain minimum level of financial competence and ensures a far more rigorous level of financial and administrative transparency. Once again, the focus is on transparency of the organisation, not on the quality of products or services offered. A stock exchange has two interesting aspects : first there can be more than one stock exchange, so there is no threat of a monopoly and second they are supervised by SEBI to ensure compliance with the laws of the land.

However the stock exchanges do not provide financial support to any company. That is done by individual investors in the capital market based on their personal or institutional perception of the company's performance.

So the three components of financial sector are (a) Registrar of Companies and the Companies Act (b) Listing in the Stock Exchange under SEBI supervision and (c) Funds from the Capital Markets. For foreign companies wanting to do business there is the fourth agency -- FIPB that has a wider mandate of protecting India's strategic interests.

Let us now map these components into the Education sector.

First the role of the Registrar of Companies can be performed very well by the AICTE -- provided we remove its authority to approve or accredit institutions. This authority used with malafide intentions has been the bane of education in India because it has kept out the best and allowed in the worst operators. The powers of the AICTE should be restrictively defined in a new Education Act and should be modelled on that of the RoC.

Any institution registered with the AICTE should be allowed to offer any educational services subject to the Consumer Protection legislation in the country. Consumers in India are quite conscious of their rights and if they have the choice -- as they now have in telecom or air travel, not to mention on soaps, shampoos or cars -- there is no fear that educational service providers will be able to cheat them. Let us have some respect for the Indian customer.

But if an institute wants to move into the next, higher league, we need a self-managed organisation like the industry association that will ensure discipline and transparency in its members. One or two leading institutes -- some from the government sector like IIT, IIM and some from the private sector like BITS, ISB -- can take the initiative to form these associations. Initially this might lead to multiple organisation -- like multiple stock exchanges -- but in the long run, through a natural process we might end up with two or three, similar to the BSE/NSE model that we have today. These associations would ensure transparency and consistency in the behaviour of its members and could be supervised by a government body like the AICTE. Institutes accredited through these associations would be ranked higher in the perception of students -- who are the customers of educational services.

Finally funds ! And this is where both the government and private organisations must step in with generous support -- but we must use a market driven approach. Both the government and the private sector should set up multiple funding organisations each with its own goals and objectives. The UGC is an obvious candidate but the Department of Space could provide separate funding for programs leading to astrophysics and the Department of Minority Affairs could have a separate funding for Muslims. Similarly Tata Steel could fund institutes operating within 50 kms of Jamshedpur and an NRI in California could fund institutions in his native Bankura district -- to each his own !

Whatever may be the source and intent for funds we need transparency on two fronts (a) the criteria for funding and (b) the actual distribution of funds in each year. Each funding agency could have its own criteria publicly available and any "registered" institute can in principle apply for funding provided it meets the requirements of the funding agencies. Agencies would distribute funds to eligible institutes based on their perception of how "good" the institute is -- in terms of how published criteria. This is where metrics like "student-teacher ratio", "placements", adherence to social goals in terms of gender and caste equity, quality of research, patents can be introduced. All funding agencies may not have the same set of criteria -- each should have the liberty to specify its requirements and institutes will have to compete for funds.

Some of the funding may be automatic and statutory – for example HRD funds to IITs and IIMs – while others may be discretionary based on the extent to which an institute meets the criteria. However all funding agencies , especially those based on tax payer's money, must make available to the public all information on funds disbursed to each institute AND the justification for the same in terms of the adherence to the funding criteria.

Potential students can study the pattern of fund disbursals and draw their own conclusions about how good or bad an institute is as perceived by funding experts who have voted with their purse ! In a sense, market forces will drive both funding and students to the best institutes in the country.

In fact honest competition is what is completely missing in the education sector and this has led to an immense complacency in the public sector education system in the country. What makes it worse is that public sector institutes are so dependent on the bureaucrats in the HRD ministry for money that they have no option but to toe the sarkari line. Both these issues can addressed through the structure that is proposed here.

And finally what about foreign universities ? If as a nation we are brave enough we can allow them to come and operate through this route but otherwise we can have the equivalent of an FIPB to ensure that trashy organisations are kept out -- but this is neither necessary nor sufficient for quality and is best kept in abeyance for the time being.

As a part of the Prime Ministers 100 day program, may I request Mr Kapil Sibal to organise a conference on Higher Education where ideas like these – and those from other, more eminent people – can be formally considered for speedy execution.

Reforming Higher Education

With the departure of the control-and-caste-conscious (3C) politicians from the Ministry of Human Resources Development there is a window of opportunity for Mr Kapil Sibal, the new incumbent, to finally get India going on the road to high quality education. Newspaper editorials written by sane and civilized people have made numerous suggestions and -- not surprisingly -- most of these would like to see a sharply diminished role of the AICTE and similar sarkari inspectors. Let me add my 2-paise worth of ideas to this great melting pot.

Education policy in India has been motivated crass crony capitalism masquerading as concern for the customer. We are asked to believe that if the government -- consisting of the corrupt neta and the inefficient babu -- does not control all aspects of a service then the poor customer would be fleeced by the unscrupulous businessman. This is the same set of lies that kept preserved government monopolies and government supported oligopolies in telecom, aviation, postage, steel until the great bankruptcy of the 1980s forced the government to liberalise and the results are there for all to see.

Going forward we need the government to play two kinds of roles -- that of a lean regulator and of an honest financier.

While SEBI and TRAI have often been showcased as instances of positive regulation, I would suggest that we go even further and take the Registrar of Companies as a model. The Registrar of Education ( why just Higher Education ) should be the nodal agency for simply registering -- and not approving -- any educational entity in India. All that this body needs to do is to keep track of who the owners are and whether they are in compliance with the laws of the land. The Registrar of Companies does not go about the evaluating or approving the goods or services that a company provides ... it simply ensures adherence to the Companies Act. In the same vein, we could have an Educational Institutes Act and the Registrar of Education should ensure compliance with the same.

What should be there in the Educational Institutes Act ? As little as possible to ensure that Institutes declare who they are, what they offer and how much they charge. Nothing in the Act should allow the Registrar to decide who should offer what course and how much should they charge -- just as the Companies Act does not specify what goods or services are offered by any company nor how much should they charge for the same. The Act and the statutory disclosures under the Act should ensure total transparency in terms of ownership and financial status.

The second role that the Government can and should play with far more vigour is that of financial support. Here we should have bodies like the UGC that would lay down funding criteria an decide how much money should go to each Institute. All Institutes -- private or government owned -- can apply for funds and all allocations should be based on a appropriate guidelines and made visible on appropriate public platforms like websites.

We can have a multiplicity of funding bodies -- for example, in addition to the UGC, there can be state level bodies, bodies funded by specific government departments like Biotechnology or Space, or even public-private bodies set up with private participation. Each funding body can have its own criteria -- based on courses, locations, caste status of students or any other condition that is not in violation of Constitution of India -- but the information about their disbursements should be in the public domain. This will reduce arbitrariness and unfair discrimination.

The Institutes, on the other hand, by having to publicly compete for these funds will have to make sure that they meet and exceed the various criteria and this to an extent will improve the quality of education that is delivered.

This two track approach -- with a lean regulatory framework supporting a robust financial support mechanism -- would need to be thought through in greater detail but if established and operated honestly will ensure a solid foundation for higher education in India.

Save the JEE, Kill the KEE

The IIT system, that was born in the early, optimistic years of the young Indian state, was truly one of kind. It articulated the scientific and technological aspirations of a nation, that had just found its feet in the global community, and exemplified -- what Thomas Friedman would later refer to as -- the process of "drilling for talent" : the search for the best and finest minds in the country -- irrespective of where they came from and who they were related to. By raising the bar on exclusivity and fairness, the JEE, that guarded the portals of the IIT system from the general mediocrity of the population, has become such a legend in itself that Brand JEE dominates Brand IIT by miles ! This is evident in the difference in the market esteem ( if not market value ) between IIT students who have cracked the JEE ( undergraduates) and those who have not ( for example the M.Techs, PhDs and what not ).

But like all other institutions in the country, the JEE is under attack and is in mortal danger of being subverted by the poisonous ambience of what Nirad Chaudhury referred to as the Continent of Circe. "India" has a way of debilitating people -- from the Aryaputra's of yore, through the Huns, Kushans and Turks right upto the British, whose conquest of the country spelled the doom of their Empire. Killing the JEE, and the excellence that it embodies, is KEE, the Kota Examination Enhancer, the Rajasthan based set of coaching classes that converts dross into (fool's) gold.

With due respect to the 10000+ youngsters who have cracked JEE-2009 ( and that includes my son) we observe that there is a marked difference in the success rates in different parts of the country. Success is highest in the western region -- which includes Kota, where most of the KEE coaching classes are located -- and lowest in the east. At the risk of being politically incorrect and possibly chauvinistic, we do know that the Residents of Rajasthan are not exceptionally brilliant ! In the absence of any firm evidence of foul play, once is forced to admit that it is the ultra-rigorous, possibly brutal, practice regime enforced in these coaching classes that equip otherwise mediocre students with the skills to somehow crack the JEE and lay claim to the value of a brand that has been built by far smarter predecessors.

Can sheer practice help ? I am sure it does -- under high pressure and temperature, graphite does get converted into diamond, but never of the quality that is used in jewellery. If you rub a brick long enough and hard enough it just might shine like a slab of marble ! But are we interested in bricks that look like marble and diamonds made from graphite ? Or are we interested in actual marbles and gem quality diamonds ?

The answer is obvious : we would like the JEE to help locate the gems, and reaffirm our faith in the brand. But the BIG QUESTION is HOW ?

Should we bring in ham handed legislation and ban coaching schools ? That would be patently illegal and unfair (though such lofty considerations have hardly deterred our legislators from passing obnoxious laws )

Should we consider Class XII marks for IIT entrance ? Obviously not because all state boards are manipulated by local politicians to push through politically correct candidates ( In West Bengal, it used to be "rural" candidates who would get high marks and now, after the Sachar Revelations, it is "muslims" who are seen to be successful)

Should we change the pattern of questions so that they reveal more of the innate ability than rote learning ? Of course we should but AGAIN, HOW ? I am sure the JEE organisers have agonised over this but have not found a way to do this. So there is no hope for an immediate breakthrough on this front.

Perhaps PAN-IIT, the umbrella organisation for all IIT alumni should take this up a subject for intense debate and deliberations. If the best and brightest in the land cannot come up with a way to protect and preserve their own brand equity then who will ? Such a debate could throw up interesting ideas ...

For example : can we consider percentile ranks ( not percentage ) in Class X and Class XII examinations, convert the raw JEE rank into a corresponding percentile and then define a modified JEE rank based on the weighted average of the percentiles in Class X, Class XII and the JEE ? There is some research that indicates that the average of Class X and Class XII marks is a good indicator of a persons ability and this scheme is an extension of this line of thought.

This is one suggestion. I am sure that there will be other ways by which we can save the JEE and kill the KEE !