Madhav Rajan has been the Dean of Chicago Booth since July 1, 2017, as well as the George Pratt Shultz Professor of Accounting.
Before joining Booth, Rajan spent 16 years on the faculty of the Stanford University Graduate School of Business where he was the Robert K. Jaedicke Professor of Accounting.
Previously, he served on the faculty at the Wharton School of the University of Pennsylvania, from 1990-2001. Rajan is a commerce graduate of Vivekananda College, Chennai, and holds an MS in Accounting, an MS in Industrial Administration, and a PhD in Accounting from Carnegie Mellon University
Prof Rajan was back in his hometown, Chennai, recently and interacted with a cross-section of industry leaders at an exclusive session. Bloncampus caught up with Prof Rajan for an interview, where he talks about the future of the MBA.
What are the big changes happening in management education post-Covid, especially in pedagogy, the delivery of education et al?
The big one is that post-Covid people learnt that you could actually do online education.
If you look at a school like Chicago, most faculty were very opposed to online education, but we had to switch instantly, and within ten days everybody were teaching online.
So I think the big thing of the experiment is faculty learning how to do good online teaching. And they also realise that in the future they may have to keep doing it.
Now, some schools have gone to the extreme mode of saying, we’ll just do an online MBA. That’s a very big, bold, and risky move because you’re essentially diluting your brand in some sense that these students have no connection to you. They’re taking a class remotely, sitting at home.
Have the top B-schools done these, purely online courses?
Just last year, Berkeley started an online executive MBA. I don’t think a school like Stanford or Harvard would ever do it. They were viewed as very brand dilutive.
But you’re seeing that everybody up to that level is now starting to because I think that’s the future. How do you incorporate online into what you’re doing without necessarily becoming an online business school? It’s a big question for everyone.
Many are not seeing the value of an MBA and prefer to just enter the job market. So what are B-schools doing so that they see value?
What is happening is that they don’t want to give up their jobs to come and do an MBA. They’re giving up an income for two years while paying tuition. Instead, they want to keep a job and do more like an evening programme or a weekend one or some online combination programme.
I think that’s where the big numbers are going.
So for a school like ours, we have a full-time programme that’s very robust. But the question is, how else do you try to engage with students? What do you do online or evenings or weekends to sort of connect with them? I think that’s the place to go. I think the full-time MBA market is not going to ever grow.
You look at the US schools like Iowa, Illinois, they’ve all given up their full-time MBA programmes just because it’s just not worth it for them to have a class of students.
They’ve gone basically to teaching undergraduates and to teaching part-time MBAs. So that’s where the mass market is going. The really top schools will always have a full-time programme, but more and more, they’re trying to do other things to generate revenue.
So you’re saying the MBA is being pushed more to the executive MBA?
More to executive MBA, part-time MBA online type modalities as opposed to the standard full-time two years MBA.
So, you’re seeing those changes happening in India as well?
I think it will. Everybody has had to teach remotely for two years, so everybody has gone through the same experience. And the price point is obviously lower.
So it’s really a question of what is a degree from a great institution if you never actually went to the great institution and you just sat at home and did it online. Do they get the same degree that somebody who came and spent two years does?
And that’s a strategic decision that all of these schools have to make what is their brand value and how much are they willing to sort of trade on it to generate more revenue as opposed to insisting on a particular educational experience? But that’s a decision for each school to make.
So what’s Booth doing?
We haven’t done an online MBA and I don’t think we will do one. During Covid, we had to, but now that Covid is done we’re back to in-person. But we will over time offer more flexibility to students.
So Chicago has terrible weather in the winter, for example. So I could see a model that says, look, you have to do 20 classes to get to an MBA, but maybe we allow you to do six of them online.
Also read: Mahindra University starts MBA programme
And so a student who is living somewhere else and doesn’t want to travel during winter, they don’t come. They take those classes online. So I think it helps schools like ours. And I think that’s the future.
Booth always had a strong India connection. So is that continuing?
It is continuing. We have a very good alumni group here. They do meetings every year. So we have a lot of students who come from India. And obviously, that number dipped a lot, when Trump was president. That has sort of come back.
We also have many Indian students who do our executive MBA programme in Hong Kong or London. And I think that that’s been very strong for us.
So we have lots of faculty of Indian origin who are very famous like Raghuram Rajan, of course, Pradeep Chintagunta, Sendhil Mullainathan, and so on. And we have a centre in Delhi that we use to help faculty do research in India. So it’s a very important market for us.
So you have a centre that does research, but you don’t have one where you offer programmes?
No, we don’t. We don’t do any programmes in India. The only places we do programmes are London and Hong Kong. But we have a centre in Beijing and a centre in Delhi to support faculty research.
So would that be a natural extension where you may offer programmes here eventually?
The economics aren’t that clear whether that would work for us. When I was at Stanford, we did a bunch of executive programmes outside the US.
We ended up having to shut down, just given the price points that we charge. It’s very hard to charge that in India or, in the Philippines or Indonesia, to make it work.
So I don’t think economically it would be viable for us. I think we’ll still do research here. We’d love to attract students from India, but I don’t think we’ll ever come to India physically and set up an institution for teaching.
Most senior people in an office have learnt the basics of management or marketing in a certain way, but today everything is topsy-turvy. You have social media, influencer marketing, LinkedIn et al in all the various aspects of marketing. Not so much maybe in finance where the traditional principles may apply. So much has transformed. So how are you incorporating all this into your curriculum?
It’s funny, in many ways, it’s been an advantage for us because if you look at our field like marketing, we never were known for marketing. But over time what’s happening is marketing has become as data-driven, as finance, for example. And really that’s when people ask me what is Chicago Booth, I tell them, we’re ultimately a data school.
We are great in finance because we applied data to finance before anybody else did. Similarly, as marketing has moved to become data-driven, that’s been great for us.
We have the best marketing faculty in the world now because many of the faculty are economists who do data-driven marketing and the others specialise in consumer behaviour, which is psychology-driven marketing.
And so it’s helped us sort of disrupt the field of marketing and become the best simply because we were not part of that legacy field in marketing.
That’s interesting! So all that esoteric economics is now coming in handy?
If you look at, say, doing search engine optimisation or you’re looking at like scanner data, or you’re looking at pricing, that’s completely data-driven nowadays and that’s what our faculty are best at. It’s been a plus for us.