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Three Harvard Business School (HBS) professors led by Srikant Datar have researched and written a new book aptly titled, rethinking the MBA: Business Education at a Crossroads. The three pundits have studied in leading US and European business schools and have identified the challenges. Mercifully, no Indian B-school came under their microscope. Although their perspectives are essentially Western, many of the challenges they recognised are also true for our country. Of course, as always, there are twists in the tale, when we look at the Indian scene.

In this piece, we will look at business education from an Indian perspective. The first challenge is the proliferation of “bad mangoes” in the MBA basket. The classical MBA model in India is the two-year PGDM (post graduate diploma in management) programme. It was pioneered by the IIMs with a stringent CAT filter. The PGDMs are considered to be a “VIP pass” in the corporate recruitment market. In recent years, a variety of shorter programmes from bottom-tier institutions have mushroomed. Some of them boast of loose links with “foreign” institutions with dubious merit. This avalanche of MBA courses has created a hollowing out effect. The same trend is discernible in the West. Thankfully, the industry has declined to recruit from these shoddy institutions and there are signs that they are sputtering.

The second challenge is the curricula. Most B-schools have not kept pace with the changing times. Simplistically, the MBA courses focus on three things: knowing, doing and being. Because most professors are from research and academics, the scale is heavily tilted towards knowing. The curriculum is typically light on both doing and being. Some B-schools are experimenting even with knowing. Yale, for instance, is not teaching traditional functions such as marketing, finance and strategy any more. The new courses are built around external stakeholders like competitors, customers and internal stakeholders like employees and innovators. IIM-Calcutta has done a complete rethink and refresh of its curriculum. Its pedagogy is now being fine-tuned to adapt to the new thinking and curriculum. There is a clear need to rebalance. More focus is needed on doing and being.

The third challenge is in the ethos. How are B-schools ranked? How do MBA students rank prospective employers and recruiters? Most serious rankings place a disproportionate weight to salaries offered at campuses. This in turn drives the students to focus on this single metric to improve the ranking of their institution. Unless one takes a holistic view and looks at parameters like career advancement, life-cycle earnings, richness of experience and contribution to society — the mercenary allegation will not go away easily.

The fourth challenge is in the by-pass route that many companies are taking globally. Traditionally, the largest recruiters of MBAs are two sectors: financial services and consulting. Many of them are recruiting graduate engineers, chartered accountants and others and grooming them for the top job, recruiting fewer and fewer MBAs. The director of a leading consulting firm told Datar, “We now hire a very large number of non-MBAs into our Associate roles. In fact, our income mix is 50 per cent MBA and 50 per cent non-MBA”. An investment banker put it even more bluntly: “You are three times as likely to become a managing director at our firm if you are an associate who came up through the ranks than if you are an associate hired after an MBA.”

The fifth challenge is the ability to attract top quality talent with the right experience into teaching. This is a particularly acute problem in India, where the brand of an institution is defined more by the quality of its students than by its faculty. If students are to be skilled in being (ethical leadership and innovation) and in doing (execution and managing skills) then a way must be found to bring in the rich experience of the trench and the “corporate war stories” into the classroom.

The last and most critical challenge is to convince the society at large that MBA schools are producing ethical leaders and not mercenary soldiers. There is a belief, however unfair, that all that matters to a fresh MBA is compensation. That may not be true, but that is the perception.

Unlike other professions, the management profession never had a code of conduct. It did not have, for instance, anything remotely similar to the Hippocratic oath that doctors take, which gives them some guidance about their role in society. Nitin Nohria, now dean of HBS, and Rakesh Khurana also of HBS wrote an article in the Harvard Business Review which contained the seeds of the now famous “MBA oath.”

Last year, half the graduating students at HBS took the oath. The MBA oath movement is not limited to HBS. The oath is voluntary. It covers a variety of issues: integrity and ethics, safeguarding the interests of all stakeholders, putting the long-term interests of the enterprise above narrow self-interest, not indulging in corruption, complying with laws in letter and spirit among others.

B-schools must practice what they preach: they must embrace change. As Paul Valery famously said, “The trouble with our times is that the future is not what it used to be.” Therefore, B-schools must not only find new answers to old questions, they must also think up new questions and provide answers ahead of the curve.

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