Business Standard Best B-Schools Survey does not rank the management institutes but puts them in hierarchical categories which help aspiring students to compare.
The Indian Institutes of Management in Ahmedabad and Kolkata, Indian Institute of Foreign Trade in New Delhi, Institute of Management Technology at Ghaziabad, Management Development Institute at Gurgaon, National Institute of Industrial Engineering in Mumbai and Xavier Labour Relation Institute at Jamshedpur are the country’s top business schools, according to the Business Standard Best Business Schools Survey 2010. These business schools fall in the Super League category of the annual listing.
Last year, the category had ten business schools. All seven on this year’s list were there. In addition, there were Faculty of Management Studies of the Delhi University and the Indian Institutes of Management in Bangalore and Lucknow. In this year’s survey, the three institutes could not participate.
In the next category — A1 — there are nine business schools: The Indian Institutes of Management at Indore and Kozhikode, Department of Management Studies at the Indian Institute of Technology in New Delhi, Shailesh J Mehta School of Management at the Indian Institute of Technology in Mumbai, Nirma University’s School of Management in Ahmedabad, International Management Institute in New Delhi, KJ Somaiya Institute of Management Studies & Research in Mumbai, Mudra Institute of Communication at Ahmedabad and Xavier Institute of Management at Bhubaneswar. Nirma University is the new entrant to this list this year.
There are close to 2,000 business schools in India, more than anywhere else in the world. The reason is not far to seek. The entry barriers are low — it really doesn’t take much to set up a business school in the country. While it has no doubt increased the managerial bandwidth in the country, it also poses some serious problems for the key stakeholders — aspiring students as well as employers. Take aspiring students first. How do they choose the right business school? How are two schools different from each other? What is the strength and weakness of each? It is not an easy choice, given the vast number of business schools in the country.
The task is not easy for companies either who hire from these business schools. It is not easy to screen each and every student thoroughly. Thus, the reputation of the business school becomes all important. There are several questions that matter here. How good is the school’s infrastructure? Is its faculty any good? Do companies tap it regularly for consultancy assignments? There are no easy answers, thanks to the large numbers. It is not possible for a company to scan all the business schools in the country.
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There is a third set of problems. Most business schools work in isolation. There is no structured feedback mechanism that tells them which are the areas where they need to improve. Is their infrastructure up to the mark? Is the faculty best in class? Such benchmarks are absolutely essential if a business school wants to upgrade itself.
The Business Standard way
This is where Business Standard’s Best Business Schools Survey fits in. The survey has come out for over a decade now. The idea is to help students who want to get management education and companies who plan to recruit fresh managerial talent to make the right choice. The survey also gives a platform for business schools to benchmark themselves against each other — how do they compare with others. This is important. In the absence of such a comprehensive survey, most schools wouldn’t know what corrective action to take.
There are several business school surveys done every year. But these are all perception surveys and limited to the top schools. Obviously, they touch upon a small part of the universe. This also runs the danger of excluding the actual information about the business schools. Such perception-based surveys have another associated risk — the assumption that respondents (aspirants, students and executives from companies) are well-informed about all the institutes. This might not always be true.
The Business Standard survey, in contrast, is not based on perceptions but on rigorous analysis of everything that goes into making a business school. All business schools are rated on five parameters: Intellectual capital, admissions & placements, infrastructure, industry interface and governance. Each of these can be measured objectively. There is hence no scope for subjectivity or any bias. Of course, each of the five parameters has a different weight which is decided by an expert committee. The survey does not rank the institutes but puts them in various hierarchical categories. This helps aspiring students to compare institutes.
The survey is open to business schools across India. The eligibility criterion is simple: They should be approved by the All India Council for Technical Education or the government or a university. Also, at least two batches of students should have passed out of the institute. This is to assess the placements that happen at the campus. Questionnaires are sent out to the business schools. The responses are tabulated and double-checked by IMRB. Inflated claims and discrepancies are thus weeded out. As many as 50 of these business schools were visited by IMRB executives to verify the information they had submitted. This includes all those institutes that showed huge variation in scores between 2009 and 2010. All participating institutes are then put in seven categories: Super League, A1, A2, A3, A4, B1 and B2.
For the 2010 edition of the survey, questionnaires were sent to more than 1,500 business schools. Out of these, 255 sent their entries within the time limit (see chart 1). The response sent by IRMA, Ahemdabad, reached late. Another four — Acharya’s Bangalore B-School, Mumbai School of Business (Navi Mumbai), JK Padampat Singhania Institute of Management & Technology (Gurgaon) and New Horizon Leadership Institute (Bangalore) could not be rated because they were all established in 2008 two batches of students are yet to pass out from them.
Three per cent made it to the Super league, 85 per cent were in the A categories (A1, A2, A3 and A4), and the rest were in the categories B1 and B2 (chart 2). Thirty-three per cent of the business schools covered in the survey are from the South, 27 per cent from North, 25 per cent from West and 13 per cent from East (chart 3). As many as 39 business schools each were from the National Capital Region of Delhi, 32 from Maharashtra, 30 from Karnataka and 29 from Tamil Nadu (chart 4).
Trends and issues
How has the last one year been for business education? A slowdown is a good time for people to re-skill themselves, a good time to get business education. But the slowdown that started in 2008 is almost distant history now. On the flip side, how have the business schools done in the last one year? The overall marks of the average business school improved a bit from 542 in 2009 to 544 in 2010 (chart 6). For the top business schools, the score actually dipped sharply from 839 in 2009 to 786 in 2010. However, the other business schools showed a sharp improvement in score - from 482 in 2009 to 505 in 2010. Since such schools are more in number, they are responsible for the increase in the overall score.
For the average business school, the score on intellectual capital has fallen from 487 in 2009 to 452 in 2010, admissions & placements have improved from 580 in 2009 to 633 in 2010, infrastructure has gone down slightly from 633 in 2009 to 627 in 2010 and industry interface has slid from 390 in 2009 to 368 in 2010 (chart 7). This shows that the infrastructure and resources of the average business school are stretched, but they have done well in admissions and placements. This can perhaps be attributed to the strong demand for managerial talent from industry. The story is somewhat similar for the top business schools in the Super League, A1 and A2 categories. Their performance on all parameters is down, except admissions and placements (chart 8).
But when the others (categories A3, A4, B1 and B2) are taken into consideration, the picture begins to change dramatically. Their intellectual capital score may have dipped slightly from 412 in 2009 to 407 in 2010, but they have improved their score in all the other parameters of admissions & placements, infrastructure and industry interface (chart 9). The reason perhaps could be that these business schools are conscious of the fact that they need to upgrade rapidly if they want to get students and good companies to recruit in their campuses. They have therefore made an attempt to improve their resource pool and infrastructure in the last one year. It is a fight back.
Analysis of the data shows that the faculty is strongest in the Super League category (chart 10 and chart 11). There are two ways to measure the quality of a business school’s faculty: One, the percentage of teachers with PhD degrees, and two, the faculty-student ratio. Eighty-five per cent of the faculty of Super League business schools had a PhD degree in 2010 — the same as in 2009. The good news here is that in all the other categories, except A1 and B1, the percentage of teachers with a PhD degree has gone up between 2009 and 2010. The faculty-student ratio has deteriorated between 2009 and 2010 for all categories except B1 and B2. This is more proof that business schools lower on the list are striving hard to improve.
Another measure of quality is the paper and articles published by the faculty (chart 12 & chart 13). Here the trends are mixed. While the score of business schools in the Super League category fell sharply from 62 in 2009 to 51 in 2010, the score of the A1 category slipped from 45 in 2009 to 40 in 2010 and B1 slipped from 6 in 2009 to 5 in 2010. In contrast, the score of the A2 category improved sharply from 33 in 2009 to 43 in 2010, A3 jumped from 19 to 27, and B2 improved from 2 in 2009 to 3 in 2010. The A4 category stayed at last year’s level of 9. In terms of the number of articles, all the categories have declines sharply, except A2 (35 in 2009, 36 in 2010) and B2 (1 in 2009. 3 in 2010).
The ultimate test of any business school is the salary offered by recruiters to its students. Business schools across categories have seen an uptrend in 2010 (chart 14). The average for Super League business schools was Rs 11.9 lakh per annum, while it was Rs 9 lakh for A1 business schools. After that, salaries continue to be low: The average was Rs 5 lakh in the A2 category, Rs 3.4 lakh in the A3 category, Rs 2.8 lakh in the A4 category, Rs 2.4 lakh in the B1 category and Rs 2 lakh in the B2 category. In percentage terms, the sharpest rise in the average salary can be seen in the B2 category: Almost 43 per cent from Rs 1.4 lakh in 2009 to Rs 2 lakh in 2010. But this is perhaps because of the low base. The difference between the average Super League salary and the average B2 salary was Rs 9.2 lakh in 2009; it increased to Rs 9.9 lakh in 2010. Clearly, companies are willing to pay more for top-quality talent.
Another important factor to measure the success, or otherwise, of a business school is its interaction with industry. Is the education that it imparts restricted to the classroom or does it go and out and interact with industry? This is important. Unless students get to see business at work, they will gain little practical experience. Nobody in today’s world wants managers who are mere bookworms. It so happens that there aren’t enough Indian case studies around. Most business schools make do with Western case studies. This is a huge gap which looks worse when you realise that most business school graduates have to work within the country. This makes interface with industry crucial. One way to look at it is the number of consultancy assignments that a business school lands during the year. Unfortunately, the score between 2009 and 2010 has declined for the Super League, A1, A2 and B1 categories, has stayed at the same level for the A3 and A4 categories and has improved only for the B2 categories (chart 15).
The reason could be that 2009 was an exceptional year. Companies were still grappling with the economic slowdown and needed advice across functions like production, human resources, finance and marketing. But the slowdown proved to be real short, and markets are booming one more time. Automobile sales are on the fast track, there is no stopping the mobile telephony market, retailers are reporting brisk sales, fast-moving consumer goods companies are on a roll, to name a few examples. This perhaps has dampened the demand for consultancy from companies. A slowdown, conventional wisdom tells us, is the best time to be a consultant.