Indian B-Schools’ Race to Be Global Best

IN THE QS World University Rankings, IIM-A, IIM-B and IIM-C are in the 22nd, 32nd and 50th positions, respectively (the toppers of the QS list are Harvard University, INSEAD and London Business School).

The 2024 edition of the Financial Times Masters in Management global rankings, meanwhile, has 14 Indian business schools in top 100, three of them in top 50 (SPJIMR at 35, IIM Ahmedabad at 39 and IIM Bangalore at 41). These schools have made it to the FT list by virtue of their AACSB (Association to Advance Collegiate Schools of Business, a U.S. accreditation body) and EQUIS (European Quality Improvement System) accreditations.

India being among the world’s largest economies, business schools are also vying for a place among the top globally with aggressive efforts to meet international accreditation standards such as curriculums that offer the right balance of knowledge and skill acquisition, a strong emphasis on research, an environment which appeals to international students and faculty, and a strong focus on purpose and impact.

While IIM Calcutta, IIM Indore, IIM Kozhikode and Indian School of Business (ISB) have Triple Crown international accreditations with AACSB, AMBA (Association of MBAs) and EQUIS, the likes of IMI Kolkata and Delhi, SPJIMR and XIM University have two international accreditations each. Mumbai-based NMIMS (Narsee Monjee Institute of Management Studies) recently got accredited by EQUIS.

“It’s high time Indian B-Schools internationalise themselves. The first step should be to make the curriculum global. We have to start programmes that are geared for the global market,” says Bharat Bhasker, director, IIM-A.

“There is scope to transform India into a global education hub for which schools need to create an international environment,” agrees Justin Paul, dean and provost, NMIMS. Positioning Indian business schools globally would require having faculty as well as students from across the world. Over 60% of the classroom strength in Harvard Business School includes non-Americans. Attracting global students and faculty would also enable schools to increase tuition fees that could translate into higher revenues. Faculty with international expertise could help offer robust executive education programmes, an important criterion for international accreditation, as well as a revenue-generating tool.

According to Debashis Chatterjee, director, IIM Kozhikode, the Kerala-based IIM was the first in the country to start the global accreditation process in 2012, when it got recognised by AMBA. “We now have all the three global accreditations. This gives us the ability to set global benchmarks and promote international networking. It also provides international perspectives whereby our students understand the nuances of the global economy,” says Chatterjee.

“It is very important to have international accreditation,” says Ram Kumar Kakani, director, IIM Raipur. “Most B-Schools looking to be part of the long game are focused towards, having both internationalisation of curriculum and international accreditation.”

No Cake-walk

Though the intent seems to be there, globalising has been tough. India has 3,200-odd business schools and even the top-ranked ones find it a challenge to attract global faculty as well as students from other parts of the world. According to Fortune India’s Best Business Schools study 2024, despite being on top of the game in the NIRF (National Institutional Ranking Framework) rankings, 89% of schools don’t have a single international accreditation. “Students from developed markets such as the U.S. don’t want to come to Indian business schools as they still consider India to be a third world country,” points out Himanshu Rai, director, IIM Indore.

Schools, therefore, don’t have much choice but to enter into partnership with their global counterparts for exchange programmes, wherein students come in for studying one semester in the country. IIM Indore recently launched a rural engagement programme where international students live in the villages of Madhya Pradesh for a week, understand their problems and try to come up with solutions. “There are 12 students who are coming from the University of Glasgow to do this programme,” says Rai. Similarly, NMIMS has launched the ‘Incredible India immersion Programmme’ to attract students from foreign B-Schools for three-four weeks to acquire academic, industry and cultural insights. It has been able to attract around 20 students this year from various universities in France. “We are also in talks with researchers in foreign universities to join us, which will help bring in diversity in knowledge and thoughts,” says Paul.

IIM-A is even considering opening an off-shore campus in its bid to internationalise. The school is evaluating options in Africa, MENA region, south-east Asia and Australia.

The challenge for top business schools in India is not so much financial, but more to do with not having the right mindset to change. Producing high quality research is an important requirement for globalisation, but India is far behind compared to the rest of the world. The NIRF ranking may give a 30% weightage to research, but it is not obsessed with quality.

“Many business schools that are on top in global rankings are way down in NIRF rankings and that is because there is emphasis on quantity of research and not quality. You can actually pay and get papers published in journals. Your paper may have been published in a journal ranking 1,700 and you may be the third or fourth author, but it still helps push up your ranking,” explains Varun Nagaraj, dean, SPJIMR.

Having a research pedigree also means a strong faculty and Indian business schools have, to date, largely been teaching focused. ISB Hyderabad is the only B-school where over 50% of the faculty is research-led. “ISB puts a lot of emphasis on research. Most of the faculty we get are trained in the West, where research is a priority,” says Madan M. Pillutla, dean, ISB.

Indian B-Schools need deans or directors who have been trained globally, says the HR head of a leading consumer goods company. “Only a handful of institutes have faculty who have had global exposure,” she adds.

The top 100-200 business schools in India probably have the wherewithal to internationalise, but for the lower-rung institutions, the challenge is survival. These are the ones that find it difficult to fill seats because they don’t have a good faculty and are not able to attract companies for campus placements. Therefore, a consolidation of lower-rung business schools could well be in the offing. To add to this is the National Education Policy, which allows global universities to set up campuses in India. They don’t have capital issues and could pose a threat to the lower-rung business schools.

“None of the top universities have established campuses in India, but when they do, the lower-rung institutes would definitely get impacted,” agrees Bhasker of IIM-A.

The Business Of B-schools

Bhasker believes IIM-A attracts the best-in-class research faculty. “They are returning Indian PhDs and post-doctorates... Research needs investment. Most schools don’t have that kind of investment. We have 10 research centres, of which eight are running on funding from alumnus or firms. The NSE is running a centre, while the top three executives of Kotak have funded a centre here.”

While Bhasker feels most business schools are over-dependent on tuition fees, Nagraj of SPJIMR says the need of the hour is to reinvent the business model. “The old funding model of tuition fee will not cover costs,” says Nagaraj.

The urge to globalise has forced B-Schools to invest at least 15-20% of their revenue on research, hiring research-active faculty, and investing on social impact. Nagaraj agrees with Bhasker that most are not lucky enough to get financial backing from alumni.

“There is a mismatch between new requirements and the old business model. The new model has to incorporate new sources of funds, which have to come from corporate partners,” explains Nagaraj.

“Revenue can be obtained either by increasing the number of seats or the price of the seats. Seat increase is limited by the approvals you get from the regulator... You also don’t want to increase seats indiscriminately as your quality of admissions would fall. The only differentiator is the median salary. If you can up your game on that you can increase the number of seats as more students would aspire to come to you,” explains Himadri Das, dean, IMI.

Tuition fee is linked with the CTC a student gets during placement. The fee of a two-year PGDM programme could be anywhere between ₹20-28 lakh. A student has to get a CTC of at least ₹20-25 lakh per annum to be able to comfortably pay off the education loan. “Students see the average salary they will get and the average money they have to spend. If average salaries go up every year, it allows institutions to increase fees in a favourable way,” explains Das of IMI.

Digitisation, The Way Ahead

The news of Amitabh Bachchan’s granddaughter, Navya Naveli Nanda, getting into IIM-A went viral on social media. Navya, however, is part of the institute’s recently launched two-year online MBA programme, which is hybrid. Students need to be present on campus for only 30 days. “You start every term with five days of physical classes, and then you have live classes online. The faculty will be the same and our curriculum is 85% similar to our two-year campus programme,” says Bhasker.

Many top-ranked business schools in India are looking at offering digital courses as a source of revenue. IIM-A, for instance, has the Online@iima platform, which offers a host of short digital courses. IIM Indore has partnered with IIT Indore for a digital masters course on data science and management. It is also in talks with AIIMS to launch a programme on health management.

Online programmes have become a source of additional revenue generation for most business schools, says Mayank Kumar, MD of online learning platform UpGrad. “They (B-Schools) can’t increase the number of seats as quality gets impacted. Online gives them that additional income.”

Globalisation is definitely the topmost agenda of most B-Schools, but it’s still work in progress.