The Hindu Business Line : What do the IIMs `do'?

The Human Resource Development Minister, Mr Murli Manohar Joshi, has justifiably raised important issues pertinent to the contribution of the IIMs. His assertion that the quality of the six business schools is independent of the fees is defensible, says G. Ramachandran, looking at the fees and the way and outcome of IIM education.

IT IS difficult to reject the claim that the Indian Institutes of Management (IIMs) are a national and international brand in graduate education in business and management. Institutions of higher learning gain their impeccable reputations through the focus on excellence in problem solving and hypothesis testing.

Both professors and students participate in the exercises, experiments and exchanges of ideas and results. Some institutions gain their semi-permanent acceptance because of their students. Some gain their long-term reputations through the efforts of their faculty. Others pursue more enduring dominance by enabling collaborative effort.

The IIMs belong to the first of the three classes. The brand equity and reputation of the IIMs are tightly bound to the quality of the incoming students and the quality of the graduating classes. Student enrolment is based on the Common Admission Test (CAT). The CAT is an intensely contested battlefield. More than 125,000 aspirants appeared for the CAT on February 15. About 1,500 of these aspirants will enrol into the six IIMs in late June or early July. They will unqualifiedly represent the best among the intellectually sharp.

The CAT is the principal tool that identifies such talent. With such a powerful tool in place and in play, the quality of the incoming students is nearly unsurpassable. Thereafter, it does not require much effort by the IIMs to ensure that the quality of the graduating class is as good. The IIMs award the postgraduate diploma in management or business administration and the fellow in management citation.

It would be reasonable to argue that the IIMs have built their significant reputations on their ability to enable the graduation of high-quality students. The postgraduate diploma is reputed to be as constructive as the masters in business administration (MBA) degree.

The fellow in management award is reputed to be as comprehensive as the doctor of philosophy (PhD) award in management. Yet, it is difficult to separate the reputation of the two programmes from the extraordinary quality of the students who qualify for enrolment.

Silence in the roar

The national and the global economies have since April 1991 been through tumultuous and epochal changes in the way businesses are managed and in the way managers in the private and public sectors allocate resources.

But a survey of news, case studies, research papers and constituents of task forces appointed by the Central and State governments in this period shows that IIM professors have not taken an active part in problem solving and hypothesis testing pertinent to businesses and economies.

IIM professors have been cited infrequently and only a few had participated in the exchange of cutting-edge ideas. By contrast, professors from universities, say, in the United States have been cited more frequently and have participated more often in the exchange of ideas pertinent to India.

There could be a national bias towards those who teach in the US, but professors from the IIMs may have chosen to stay away from the frontlines.

Given that institutions of higher learning depend on their students and professors towards building their relevance and reputation, it is difficult to reject the hypothesis that the boards of governors of the IIMs have not done much towards pushing their faculty to the interesting frontlines in economic decision-making, corporate finance, brand building and global business modelling.

Both faculty and the boards of governors may have chosen the silence and the calm of uncontroversial and uninteresting pursuits while avoiding the turbulence and the roar of the world around them. Faculty and the boards of governors of the IIMs may have `left themselves too alone'.

Hence, they did not foresee some of the principal sources of unsettlement in the context of the CAT and student fees. It is also difficult to reason why they did not subject their activities and positions to the rigours of simple risk analysis.

Core competence

Business school aspirants know that the CAT is the principal tool that identifies top talent in the context of admissions to the IIMs.

They also understand that the admission teams comprising faculty from the IIMs have the uncompromising integrity, patience, tact and the experience to use the power of interviews and group discussions to select only the very best from those who score above the threshold in the CAT.

In other words, aspirants trust the admissions process so much that they know that they would enrol into the IIMs along with the brightest.

The opportunity that the IIMs offer to MBA aspirants to go to graduate school along with peers with a record of accomplishment is very valuable from such a perspective.

The value is revealed and acknowledged because everyone trusts the admissions process to bring together competent and competitive students.

And they are all rivals too because they have the opportunity to compete for `prestigious' offers from dominant global corporations, banks and consulting firms. Rivalry improves competence and competitiveness, especially when the contestants are from the top drawer. That is, value is publicly revealed and acknowledged once more.

What, then, is the core competence of the IIMs? They design a great test, stick to integrity while interviewing applicants and then set up and maintain an environment that spurs rivalry among students — at least for a while — so that they can demonstrate their competence and competitiveness to prospective employers.

In short, the IIMs make the market for competence and competitiveness.

They then gain their reputation from the two-step process that picks competent and competitive students who then choose to become competent and competitive employees, employers and entrepreneurs.

This assessment of the core competence of the IIMs does not in any manner discredit the pedagogy and the assiduity with which the `IIM establishment' sets up and maintains the academic environment that first spurs rivalry among students and then enables the demonstration of contemporary competence and competitiveness.

It is certainly not easy to replicate their core competence, but students are at the core of the overall reputation of the IIMs.

Soaring students

Therefore, graduating students of the IIMs have a global market for their talent. They head numerous nationally prominent companies in India and globally dominant companies in other parts of Asia, Australia and New Zealand, Africa, Europe, and North and South America.

More significantly, more than a thousand alumni of the IIMs teach at reputed graduate schools of business and management around the world, though only about 40 of these teach at the IIMs. A very small percentage of IIM professors are graduates of the IIMs. By contrast, reputed professors of, say, US universities are often doctoral graduates of other reputed business schools.

For example, professors with PhDs from the Wharton School of the University of Pennsylvania may choose to teach at the Sloan School of Management of the Massachusetts Institute of Technology, and vice versa.

US universities allow significant scope for large-scale rivalry among faculty to thrive. They also make possible the simultaneous cross fertilisation of ideas. It is not surprising that the councils of economic advisors of heads of governments include such faculty.

From such a perspective, the IIMs do not wield significant influence. If the spurring and sustenance of rivalries among students define the core competence of the IIMs, then their faculty have limited participatory experience in such rivalries.

It is, then, difficult to reason why and how the level of fees could make a difference to the spurring and sustenance of rivalries. Fees and the outcomes of education at the IIMs are not joint issues.

The Human Resource Development Minister, Mr Murli Manohar Joshi, has justifiably raised important issues pertinent to the contribution of the six IIMs. Mr Joshi's assertion that the quality of the six business schools is independent of the fees is defensible.

(The author is a financial analyst. Feedback may be sent to indiagrow@sify.com)

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