Outlook-ICARE India MBA Rankings 2023: Rethinking Business School

The demand for business education has surged worldwide to the apparent benefit of business schools. In response to that demand, and because of the relatively low cost of entry into the business education sector, many business schools have been established worldwide. Whether this growth will continue, slow down or even reverse shortly is a question confronting business school administrators. Irrespective of medium-term variability, however, the long-term trend in demand for business education worldwide should remain on an upward ­path, assuming the world economy continues to expand, driven by faster-growing ­developing countries.

This favourable global environment provides an excellent opportunity for business schools, particularly those in high-growth economies. But it also raises several challenging issues, particularly for developing countries. It will have to evolve in developing countries to satisfy a more complex environment with peculiar demands from students and employers. The implication is clear: In developing markets, top business schools will either transform themselves to meet those demands or cede some of the terrains to alt­ernative business education providers.

Challenges and Opportunities

There are several pressing issues facing business schools. They include (1) the effects of globalisation on business education and how to respond to this phenomenon; (2) the shortage of highly qualified faculty and what to do to make up for the shortfall; (3) the need to introduce softer skills into the curriculum while preserving the more analytical and concept-based courses; (4) the effects of information and communication technologies on teaching and learning methods; (5) the need to achieve financial balance and whether current or alternative funding models are sustainable; (6) the need to adopt more effective governance structures and to make the appropriate strategic choices that will allow the school to better cope with competitive pressures; and, finally, (7) the need to strengthen reputation and build up the school brand to sec­ure its long term competitive position.

All these challenges, if met successfully, create opportunities for business schools to differentiate themselves from the crowd of business education providers. For example, schools that globalise successfully and offer innovative programs will strengthen their competitive position. And schools that successfully leverage their investment in information and communication technologies could overcome faculty shortages and reach a significant number of students more effectively and efficiently.

The Internationalisation of Business Education

As many companies internationalise and face global competition, students and employers dem­and a business education with a solid international dimension. In response, most business schools have adapted their structure and offerings to satisfy that request, and many now claim to be global. There are several ways for a school to internationalise its curriculum, student body, faculty and presence.

The first model of internationalisation aims at “bringing the world to the school”, that is, att­racting students, faculty and staff from around the world to the school’s campus with a maximum number of nationalities represented in the school’s programs, its faculty, its administration as well as its governing body. However, transforming a “national” school into a global one is challenging because national roots and the local context are usually strong enough to prevent a successful conversion. The few schools that have been able to achieve this obj­ective have not done so through a radical transformation. They were created as international schools from the outset and opened up to the world over time while slowly reducing the local or regional dimension. Creating an international business school from scratch may be easier than turning an existing local school into a world-class international institution.

The second model of internationalisation consists in sending abroad faculty and students. The faculty deliver courses off-site, but the school’s original campus remains at the centre of the entire system. These off-site courses are usually provided in rented facilities to students located in the host country and may include students from the original campus. This app­roach’s main advantage is exposing the faculty to other countries and cultures, thus enriching their knowledge and experience, which they can transfer back to the main campus. It also all­ows students to study abroad and mix with other countries. To increase this student experience, many schools have established exchange programs with many institutions worldwide. Students from one school spend part of their program attending courses in one or more partner institutions. As the number of schools inv­olved in such programs rises, managing the exchange, ascertaining consistency between systems, and monitoring standards across schools become increasingly complex. The danger is that the exchange program becomes a routine with little added value beyond the opp­ortunity for students to visit another country and mix with international students. Successful exchange schemes generally have a minimal number of partners (usually fewer than five) who work closely together around a well-des- igned program.

The third model, the most progressive approach to globalising a business school, seeks to create a multiple-site institution with full-fledged campuses in different regions worldwide; Ideally, one campus in each of the world’s leading economic areas, America, Asia and Europe. The challenge here is to keep the campuses tightly connected and avoid turning the structure into a multi- local school with quasi-autonomous sites. The weakness of the multi-local system is twofold. The school either ends up replicating itself abroad (its campuses may be connected but they are all the same) with little added value to the system as a whole beyond an increase in size and revenues, or it ends up creating a set of unconnected local schools (its campuses may be different but they are not linked to one another), again with little added value to the whole system beyond an increase in reach and revenues. The problem in the first case is that the school misses the opportunity to learn from each of the local settings in which its campuses are located since, in effect, the school “clones” itself abroad. The problem in the second case is that the school misses the opportunity to transfer the knowledge in each local setting between its campuses.

A truly international school is one with complementary and interconnected campuses located in the three major economic regions of the world. Within such a structure, the knowledge and learning gathered in each location circulate freely between the campuses to benefit the entire system. Through the movement of students, faculty and staff, ideas between the school’s campuses help learn from each other and compare the experience in a structured way. Likewise, faculty can do research based on local data and go further by “melding tog­e­ther” the local learning acquired in each location to create new insights and knowledge.

Not every school should aim to become a global knowledge and learning network. Many will continue to serve their local market while others will adopt a more regional scope, and a few will be truly global. But the local and regional schools will have, to some degree, to internationalise their student body, faculty and curriculum by combining some elements of both models if they wish to remain relevant in a world that is becoming tightly connected.

Faculty Shortage

Recruiting top faculty is a significant challenge for newer schools and established institutions. Even though the demand for business education has been growing steadily over the last decade, the number of faculty with PhD has not risen to satisfy that demand. On the contrary, it has been declining, making it increasingly difficult for business schools to increase their faculty to meet the demand for business programs. This can be attributed to the programme structure offered at business schools.

As the MBA program became more attractive during the eighties and nineties, fewer candidates applied to doctoral programs. Those who had completed their MBA program found it more attractive to re-enter the job market rather than apply for a doctoral program. Furthermore, upon graduation, nearly 40% of PhD graduates opt for a career in industry, where compensation packages are often higher, and the risk of failing to achieve promotion is lower. In other words, as the demand for highly-qualified faculty went up, the supply went down, producing upward pressure on compensation packages for newly hired and existing faculty, particularly those with a strong record.

The solution is to increase the incentive for students to enter a PhD program, although this may not increase the supply significantly and rapidly enough. Most qualified candidates usually receive full support to finance their doctoral studies. As mentioned earlier, compensation upon graduation is relatively high due to the shortage of graduates in the face of strong demand from schools for Ph.D.-trained faculty. Only non-monetary inc­entives, such as shorter and less demanding programs, may increase the number of candidates, but this would come at the expense of ade­quately trained graduates.

One approach to alleviate the faculty shortage is to hire faculty trained in fields closely associated with business administration, such as economics, statistics, computer science and psychology and help them refocus their res­earch and teaching interests on management studies. In a somewhat similar approach, some universities with broader doctoral programs have encouraged students to enroll in the business-related disciplines mentioned above to do part of their PhD program in business administration, thus facilitating their transition into business schools. Another approach is to attract qualified practitioners and outstanding teachers who may or may not have a doctorate in business administration. Special postgraduate programs in business administration could be established and explicitly designed to train practising managers who wish to switch to an academic career. The latter approach will alleviate some of the shortage of qualified faculty. Still, it will present another set of challenges for business school administrators: how to manage a faculty with two distinct tracks those with a standard PhD degree and little or no business experience but a solid academic profile, and those with no PhD degree, or with a specifically designed doctorate in the practice of management, with significant business and managerial experience and a primary interest in teaching, case writing and clinical research. Schools that manage that process well will have the edge over their peers, as well as other providers of business education that have eschewed the more academic, research-based model adopted by top-tier business schools around the world.

Softer Skills Curricula

The typical business school course imparts quantitative management skills and techniques. But employers, alumni and even students are increasingly demanding so-called softer skills of two types: behavioural and societal. Behavioural skills include working with others, communicating effectively, displaying multicultural awareness, and exhibiting entrepreneurial and leadership qualities. In general, these skills have been relatively well integrated into the curriculum of most business schools and do not raise fundamental issues. The term societal skills or, more precisely, societal values refers to the ability to make business decisions that are ethical and which take into account corporate social responsibility and sustainable development. The emerging consensus is that these subjects can be taught and that business schools should teach them. Core courses in production, marketing,finance or strategy should have one or two sessions devoted to understanding how ethics and corporate social responsibility may affect decision-making and the firm’s ability to create value over the long term.

This approach will have significant implications for faculty. Rather than having faculty specialising in business ethics or corporate
social responsibility, schools should consider how to train their faculty, who teach normal business subjects, to incorporate social issues into their curriculum. In other words, before schools can teach societal matters to their students, they should start teaching them to their regular faculty, who are the most credible conveyors of such principles. With this approach, societal issues will be imparted within an actual business context and without significantly enlarging already crowded curricula.

Information and communication technologies

The first wave of advances in information and communication technologies (ICT) hit schools in the late 1990s. The primary concern was that all business school activities would eventually become virtual, displacing the traditional, classroom-based education model, which has continued to date. The current respite provides schools with a window of opportunity to better understand and integrate technology into their processes and curricula and how they deliver their programs.

The need to respond to the globalisation of business education, the shortage of faculty, increasingly demanding students and the need to provide global learning solutions with faster delivery time, the traditional educational model of direct interaction between students and teachers within the confines of a single physical classroom will have to evolve. A professor in a school with multiple campuses or a school with partner institutions around the world may offer a course via video-conferencing to students from different campuses around the world. Alternatively, an instructor may simultaneously deliver a standard course or a business simulation via the internet to students located in different places or to subgroups of students over different periods of time. Students can also take an online course at their own pace without the presence of a teacher. Facilitators can orchestrate online learning communities connecting students worldwide to share their learning experiences.

All these new forms of teaching and learning are still being tested and developed. They will not completely replace the traditional classroom model but will complement it. They will allow some schools to reach a more significant number of students worldwide and satisfy the surging demand for business education, particularly in developing countries. They will also provide the opportunity for business schools to respond to the new needs of companies for tailor-made management development programs.

The potential benefits of integrating ICT into a school’s systems and programs can be significant. If implemented successfully, it can help streamline operations, control the rising cost of administrative support, enhance internal and external communications, leverage the limited faculty resources, increase the productivity of R&D investments, reach out to students and alumni around the world and respond to the need of companies and individuals for lifelong learning.

Funding models

Most public business schools worldwide receive some form of government support to complement income from tuition. In contrast, private business schools rely primarily on revenues from program fees, particularly from specialised degree programs. Governments worldwide are seeking to reduce their support to higher education institutions and encouraging them to look for alternative sources of funds. Financing investment in intellectual capital, exceptionally highly qualified faculty with lighter teaching loads and those who can get generous research budgets, is a way to self-sustain business schools. The supply of philanthropic funds to educational institutions is minimal. It will have to be stimulated by “educating” potential donors about the importance of financial support to schools. They will also have to acquire the required fundraising skills and commit significant management and faculty time to develop the relationships that will generate alumni and corporate funds.

Governance and Strategic Choices Schools, mostly those outside the US, will have to modify their governance structure for at least two reasons. Suppose schools want their alumni and potential corporate sponsors to contribute significantly to their operating budgets and help them build up the endowments they will have to involve them in the school’s governance on multiple levels. The second reason is that the business of business education is becoming more complex and faces an increasingly uncertain and competitive environment. Consequently, it is attracting more attention and increasing scrutiny from outsiders. To protect themselves against making significant errors of judgment on financial and strategic matters, schools will not only have to improve their management structure and practice but also benefit from boards made up of experienced business people and administrators. One aspect of good management is for the school faculty and board to identify the school’s strategic choices, select the most appropriate strategy and execute that strategy as flawlessly as possible.

Two important criteria for selecting the appropriate strategy are whether the school has the resources to carry out the chosen strategy successfully and whether the chosen strategy is aligned with the school’s academic model. Whatever the choice, the school will have to design its programs in such a way as to differentiate itself from other schools in the segment in which it has decided to compete, which leads us to brand building and reputation.

Brand Building

A strong brand is more likely the outcome of a successful business model than the other way around. For a business school, the brand is thus the manifestation of that school’s successful strategy, which allows it to distinguish itself from similar or competing schools in the mind of the general public and the subset of people and companies that have a relationship with the school students, faculty, staff, alumni, corporate sponsors.

In the case of a business school, the brand is partly supported by the school’s reputation as well as the visibility and success of its alumni. Clearly, schools with a strong brand will attract and retain the best students, faculty, staff and corporate sponsors within their targeted market segment.

As business education becomes increasingly crowded, and competition between providers intensifies, top schools must strengthen their brands to differentiate themselves if they want to continue to attract the best talent and receive donations. Differentiation will produce a growing variety of offerings and programs, making the business school standard model less and less common and leading to a lack of clarity in the market.

The Business School of the Future

Business schools have been around for over a century and still operate today under the same basic model as they did a decade ago. At the risk of over-simplifying, the basic model of the business school consists of a physical location where we assemble faculty, attract students, deliver courses and produce graduates. The process of this fact is likened to a production-based model whereby a selected input (qualified students) arrives at a manufacturing plant (called a school) where it is “processed” by knowledge professionals (called the faculty) to deliver an output (the knowledge-certified graduates) who are then distributed (through placement services) to jobs around the world. One of the significant drawbacks of this notion is that, once those graduates depart, there is minimal ongoing contact between them and the school.

As the forces of globalisation and communication and information technologies converge, much of this will have to change, and the production-based model of the business school will have to evolve into one where the school becomes a knowledge and learning network. The school of the future will consist of multiple, interconnected locations worldwide. They will join a network and will do so for lifelong learning and contact building. This transformation, in effect, moves the production-based model towards a much more student-centric model.

The network school will also have to rethink its relationship with its faculty. In the traditional educational model, a faculty member must live and work within a short radius of the school campus. This model will have to evolve and adapt to the business school’s concept as a network. In the future, faculty will increasingly see themselves as quasi- autonomous knowledge professionals. Some of these professionals will need the flexibility to live and work away from their primary school campus, in places that are closer to where their research material is found, which may or may not be on one of the multiple campuses that make up the global knowledge and learning network of the future. They may also want to be associated with a small number of international institutions linked together through a common educational and research project. This phenomenon may eventually lead to a new practice: faculty appointment to more than one institution.

Several challenges present themselves once we shift our thinking away from the concept of the school as a location toward one where it becomes a lifelong learning network. Increasingly, the traditional face-to-face course on campus will be just the first step as an entry point into the learning network. But to be a genuine lifelong proposition, the business school of the future will have to find ways to keep its alumni in the network once they leave the physical campus and to sustain that network by providing its members with the information, contacts,
interactions, knowledge and learning that they need. Technology is the critical facilitator; schools must build the infrastructure required to distribute knowledge continuously in time and space and create a global online community for learning and experience sharing. Over time, the forces of globalisation will further strengthen the learning network.
 
Outlook-ICARE India’s Best Business School Ranking

Keeping the roadmap mentioned above for business schools, Outlook-ICARE India’s Business School Ranking attempts to assess the efforts of business schools to buidling a dynamic knowledge environment.

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Methodology

The Higher Education Institutes are measured by five criteria: Faculty Student Ratio, Research, Employability, Faculty Quality and Inclusiveness & Diversity. These five broad parameters are then broken down into several sub-parameters/indicators, each leading to an overall weightage. The criteria scores are then normalised; scores for each measure are weighted to arrive at a final overall score of 100. The methodology is the product of years of research. It is continuously refined based on user feedback, discussions with academic leaders and higher education experts, literature reviews, trends in data, availability of new data, and engaging with vice-chancellors, deans, researchers, academicians and prominent educationists.

Observations from the result show that Indian Business schools are evolving and addressing the problem from the 3E framework of education, i.e. Experiential Learning, Experimental Approach and Entrepreneurial spirit. They are also facilitating world-class education for next-gen leaders by using online content, unique teaching tools, and case-based interactive learning that allows students to access advanced courses like Disruptive Strategy, Negotiation Mastery, Business Analytics, etc. It can also be concluded that they will seek to transform this current state of affairs and reshape the business school experience in India by promoting conscious capitalism. Therefore, the schools are putting actions behind their words on well-being, diversity, equity, and inclusion targets.

Dr Karthick Sridhar is Vice Chairman of ­Indian Centre for ­Academic Rankings & Excellence (ICARE), and one of the ­architects of India’s first ­government-approved Academic Audit & Rating Agency