India’s MBA Story: the Evolution of Business Schools

On the other hand, India’s developing market and post-recession buoyancy has fuelled a rising demand for professional managerial talent. Companies are thronging to business school campuses in search of skilled candidates to take on managerial roles within the organization.

“Large companies generally zero in on leading business schools such as the IIMs and ISB when they are conducting recruitment interviews,” says Kris Lakshmikanth. Lakshmikanth is the founder CEO and chairman of Bangalore-based recruitment firm, Headhunters India. “It is a well-known fact that there is a large pool of talent at these institutes and corporations do not want to compromise on quality when it comes to hiring people.”

Ariff Kachra, strategy professor and director of India development at the Richard Ivey School of Business, The University of Western Ontario adds: “In the Indian job market, employers have to hire based on aspiration. This is very different from recruitment trends in North America.”

Kachra explains that in North America, companies often hire executives who have already done the job at another organization. “That’s okay in a region that is growing slowly, but in a region like India which is seeing rapid growth, executives are hired who have the ability to grow into that position.” From a recruitment point of view, having an MBA degree from a good business school certainly enhances a candidate’s ability to ‘grow.’

It is here that a slew of private players have sensed a business opportunity. With the demand for quality management education outstripping supply and a shortage of seats at leading institutes such as the IIMs and ISB, there has been an astonishing growth in the number of private business schools being set up in the country. The current count has 2000 business schools operating in India but according to the All India Council for Technical Education (AICTE), an advisory and statutory body for the regulation of technical education, only 1600 are accredited.

“Many of these private institutes, unfortunately, are not concerned about quality,” notes Professor Sougata Ray, dean of program initiatives at the Indian Institute of Management, Calcutta. “Without proper regulation, the institutes flourish at the expense of students.”

Kumar agrees: “The private colleges offering MBA programs have limited focus on course delivery, industry interaction and proper infrastructure. As a result, students from these institutes do not have the necessary skills required for a managerial position, and often end up with lower level positions in sales or retail.”

Lakshmikanth explains that the rigorous admissions process at top business schools in India are a huge attraction for MBA employers. “The admission criteria at institutes such as the IIMs acts like a filtration process. The competitive entrance examination and group discussions ensure that students with the right mix of academic credentials and job experience are chosen. The education they receive at the institute grooms them for management positions in industry.”

With the government opening up the higher education space to foreign universities through the Foreign Universities Bill, the problem of shortage of seats at Indian business schools will be somewhat diminished. With a number of foreign business schools offering their programs in India, students will have more MBA options to choose from. An MBA degree from an international business school would help students gain first-hand experience of global management methods and multinationals value this exposure from a recruitment perspective.

For more information please sign up for our newsletter, or you can discuss this topic on our Facebook page.