The Indian Institutes of Managements (IIMs) Globalization:
Are They Really Ready for It?

Bahrain , Feb 10, 2006
By Dr. Prem Lal Joshi - Professor of Accounting, University of Bahrain

"If you are a religious Guru, you command PPM (power, prestige, and money) ! If you are educated but not making much money then you often are looked down upon. In India, only rich people are respected but not Professors, our society should know better"

Hottest News: "Government of India has agreed ( Feb 1, 2006) to allow IIMs to go global after meeting certain conditions e.g. modifying their MOU, enhancing intake of students etc."

Introduction

The premier management schools of India are located in the cities of Ahmedabad, Bangalore, Kolkata, Lucknow, Indore, and Kozhikode. They award post-graduate diplomas in management with various specializations. The CAT (Common Admission Test) conducted by the IIMs and is considered one of the toughest in the world as competitive test for admission to the numerous graduate programmess in Management at the six campuses.

According to the Economist Intellence Unit, IIM(A) is considered to be the toughest Business School in the world for gaining admission in its MBA programmes. The graduates especially of IIM (A), have great reputation in companies and abroad and they have been considered as the brand ambassadors of Indian management.

Recently, there has been a spate of controversies over the refusal by the Government of India to permit one of the IIMs open a branch in Singapore. There have been arguments both in favor of and against this decision of the government However, the debate still goes on and we need to carefully examine the issue in its entirety and on merit. A deserving institution should not be refused to globalize its venture if it has resources, brand name, and competent faculty to start management programmes abroad which will benefit both Indian community and Indian interests.

Some intellectuals and public critiques would ask what is wrong in it if government argues that India needs more prestigious Business Schools in order to meet the emerging challenges of the business world and believes that we should improve them and increase the strength and infrastructure here itself before aiming to set up campuses abroad. Undoubtedly, this country surely needs more skilled managers to compete with global competition and emerging challenges.

This article intends to cover certain queries and issues pertaining to IIMs research contributions, potential for developing an international journal, teaching quality and local case development, admittance of students and methods of expanding the student cohort, and setting up overseas. The analysis is provided by looking at the websites of some of the IIMs, interactions with some of academic friends and other scholars.

Research Contributions

The contributions being made by IIMs are without doubt laudable, whether we use Indian or Asian or many of the Western yardsticks of judging their quality of programmes, reputation, teaching and training competencies of faculty members, research contributions, community services, etc. However, if we are to label them as world-class institutions, they should also meet certain comparable parameters. Take the case of research publications in the top reputed international journals. In 2003, Dr. Pankaj Chandra in his working paper "Elements of a world class management school," argues

What distinguishes a world class school from others is their very strong research programme as it enables them to develop very vibrant, dynamic and rigorous educational programmes. The research is valued by peers and published by respectable journals/publishers.

Except IIM (A), IIM (B), and even IIM (C), by and large the faculty members from other IIMs do not seem to have been very much successful in contributing quality research of world class and got them published in the top international journals.

The website of IIM (A) states following about the importance of faculty research :

"research is at the core of IIMA and provides a major interface with the wider academic and business world. It provides new theoretical frameworks that enable reassessment and refinement of current practices and thinking. Groundbreaking interdisciplinary research by the faculty feeds directly into an enhanced learning environment at the Institute and indirectly to a wider audience of practicing managers and teachers of management".

A majority of the faculty members from IIM (A) certainly have a rich record of publications in Indian and regional journals. At the same time, a very good number of them also have their research work published in reputable top tier journals in the world e.g. Management Sciences, Marketing Science, International Journal of Consumer Marketing, Journal of Statistical Planning & Interfaces, International Transactions in Operations Research, Journal of Insurance & Risk Management, Journal of Global Information Management, Journal of International Business Studies, Accounting Review, Columbia Journal of World Business, etc.

However, it seems that about 40% to 50% of publications in reputable international journals may be contributed alone by scholars from Production and Quantitative Methods, and Information Technology, which is not surprising because Indians are globally well known for their expertise in these areas. One scholar from elsewhere argues that “Production and Operation Research is an analytical discipline that is more akin to engineering, perhaps that may be one of the reasons for this. At the same time, research also depends on intra- faculty collaboration based on the chemistry of attitudes and aptitudes apart from complementary knowledge of the collaborators”. Some of the leading scholars from IIM(A) who seem to have contributed significantly in the reputable international journals are: Prof. Goutam Datta, Prof. T. Bandyopadhaya, Prof. N. Ravichandran, Prof. Rekha Jain, etc.

On the other hand, the faculty in the core management areas e.g. finance and accounting, marketing, behavioral sciences, etc. do have an excellent record of publications but comparatively less in top international journals. Researchers who seem to have made significant contributions in such journals include Prof. D’Cruz Premilla, Prof. N. Vohra, Prof. Pandey, Prof. B. Banerjee, Prof. D. Bhatnagar, Prof. J. Chhokar and many more. In 2001, the Organizational Behavoiur (OB) area was ranked fifth for its research achievements by "EIU Survey Results on Global MBA Programmes".

Furthermore, the faculty of IIM(A) seems to have large research projects (perhaps running into few crore rupees) funded by international and national agencies e.g., Ford Foundation, UNO, World Bank, NCERT, Planning Commission, Central and State ministries, and industrial agencies etc. At the same time, there is excellent participation by its faculty at national and international conferences, in which about 2,300 papers were presented .

Similarly, other names from IIM (B) who have contributions in reputed international journals are Prof. B. Mahadevan, Prof. B. Shekar, Prof. Rahul De, Prof. S. Ramesh Kumar, Prof. Narayanaswamy, Prof. Prakash Apte, etc. From IIM (C), the names include Prof. Rahul Mukerjee, Prof. Raghavendra Chattopadhyay, Prof. Amitav Bagchi, Prof. Alok Ray, and Prof. Annapurna Shaw.

However, these achievements are not common across all other IIMs and the faculty members from the recently started IIMs perhaps may have a long way to go in this regard. It seems that their participation in national and international conferences have been increasing in recent years. Some may also argue that the recently established institutions should not be compared univariately with institutions having decades old history of glory. This may be true but if such institutions are aiming to have world class tag, it is always appropriate to have focused research on their top priorities and their faculty members should not be getting involved simply in institutions routine mundane work.

Factors Limiting Publications

Based on my interactions with some scholars, it seems that importance of research is definitely realized but may not have a very high priority in some of the institutions perhaps owing of a cohesive mission that guides their research. Many of them may have rather passive attitudes to research. For example, Dr. Pankaj Chandra in his working paper states that "most Indian management schools believe research is not that important activity for them as it can be done by others and teaching can be done without research". Resource constraints, lack of motivation and interactive environment are possibly other reasons. Other times, it may be left to the individual faculty members to pursue their own research agenda. Professor Asish K Bhattacharyya from IIM (C) states in the regard.

"Lack of publications in international journals does not necessary reflect the quality of research output by faculty members in IIMs. An international journal is reluctant to publish an article which is relevant and contextual in the Indian environment. While saying so, I agree that IIMS has no institutional focus on research. The research depends on the interest of an individual faculty. However, the management does not create any hurdle in research activities. IIMA, IIMB, and IIMC have some faculty members who publish regularly in top class international journals. I have no idea about other IIMs."

He further states "I do not think that resource constraint is the prime reason for lack of quality research output. The main reason is that research publication in Indian journal is not viewed as a high quality research and publication in international journals is extremely difficult, particularly in the areas of management subjects. Therefore, in absence of external motivation (either in terms of reward or punishment), huge inner motivation is required to pursue research interest. Most faculty members lack such motivation".

One faculty member from another IIM remarks on this issue "not much publications recently in international journals because I got lost in certain mundane things".

Potential for Developing An International Journal.

My one concern may be that why IIMs could not establish their own world- class research journal in management? Most of them have their own home journals but they may not be really considered international journals though they do publish some scholarly articles. All IIMs, in collaboration, should consider starting a world-class journal in management with a very rigorous international refereeing. Vikalpa (IIM (A) is one of such journals which could be definitely lifted to a world-class level with some effort. International scholars like to publish their papers in those journals that are accepted by their universities/institutions for the purpose of carrying significant weight for their promotion. "I have no answer. I agree with you that all IIMs should come together and publish a strong international journal", was the reply by Bhattacharyya.

Teaching Quality

IIMs have reputable teachers and their teaching quality may be of high class. However, outside of their territories who knows that one is an excellent teacher or an average teacher (only their final products carry this information or it may show when they lecture in other institutions around the world)? The outside world would perceive the reputation of an institution and its faculty through their quality research published in reputed international journals. Universities and institutions in HK and Singapore are the glaring examples of this, despite of the fact that the quality of students may not be as high as in IIMs. It is time to nudge a little bit more toward this side. The reaction of Prof. Bhattacharyya in this regard was as follows:

"I agree that research is an important component of an academic job. But all publications in international journal do not reflect innovative thoughts or even new ideas. Many researchers use screw driver technology and replicate what is already produced. Therefore, mere publications in international journals do not reflect the intellectual ability of an individual. The academic community has decided to use that as a parameter to measure the reputation of an individual and in USA faculty is rewarded for their publications. Many faculty members in IIMs do not find the use of screw driver technology more stimulating than teaching. Therefore, in the absence of any tangible benefits, they do not make undue efforts to publish papers in international journals. I expect that in future, research will be rewarded in IIMs."

Local Case Development, Broadening the Case Base Away from the US Cases:

Cases studies are considered an important pedagogical tool in teaching and training in management programmes because they sharpen the analytical, communication skills and critical thinking of the students. Most of the IIMs have established case development cells. For example, the IIM (B) website mentions that its Centre for Development of Cases and Teaching Aids publishes GLEANINGS, a bi-monthly abstract service providing current information on case studies and case leads from leading business and other dailies and periodicals. These are excellent attempts by these premier institutions. Similarly, IIM (A) has a very rich stock of cases . There are claims that IIM (A) alone have developed about 3,000 cases, written 500 books and 400 monographs by its faculty members. These achievements surely warrant them being labeled as world-class institutions. Similar may be the achievements by IIM (C) too.

Despite of all these, why are there some arguments and criticisms by many students, mostly from recently opened IIMs that they are fed with American or Harvard cases in most of their courses taught to them?. As all the times in the world, we claim that such cases do not reflect Indian culture, scenario, etc, though this claim might be undermined to some extent due to the entry of MNCs. Once I was trying to find a case study on target costing but no IIM had one. One Indian Professor from the US states "We have rarely heard of IIMs cases. Do they have a distribution center? We would like to subscribe some of them."

For example, the Casebook in Financial Management written by well known Professor IM Pandey may not be the hot one now because most of the cases were written prior to the economic liberalization. Where are the cases developed after economic liberalization?

Professor Bhattacharyya argues over the case development issue as follows, "Some faculty members in IIMs write case studies. The main reason for lack of enthusiasm in writing cases is the lack of interactions between the industry and academia. Indian business enterprises are not open in providing information to academia for writing cases. The situation is changing slowly. The environment in India and in most countries is different from that in USA, where industry provides full support (including financial support) for research and for writing cases. In Indian industries which are the most important beneficiary of IIMs’ activities, do not provide support for research and case writing".

What is the quality of teaching materials produced by IIMs? How are they updated unless the faculty members conduct and produce high quality-research materials? For example, in certain disciplines that students have to be grounded in, such as marketing, finance, behavior and many more, the goal may be to teach powerful new ideas as so many things that will come up in the next 5-10 years and we may not able to anticipate. The students have to be exposed to rigorous methods of thinking about new problems, unstructured problems etc.

Three scholars from IIMs including the learned Professor from IIM (C) have similar opinions and they believe that "IIMs faculty members are in close touch with recent developments in their own areas of specialization. Therefore, updating material is not an issue. Usually researchers work in a very specialized area and they update course material based on work of others".

Student Quality and Admittance: Question of Elitism

It seems that IIMs ' policies have been to admit through CAT the cream inputs of the country, most of who come from the elite class of the society. But students who come from less privileged societies and less known colleges/universities like UP, Bihar, Uttaranchal, Himachal Pradesh, Rajsthan, Jharkhand, and MP may not be able to pass this test that easily owing to language problems as Hindi is the medium of instruction in most of the institutions. At the same time, most of the students from various colleges and universities still read third class low quality question-answer type books and pass out their exams. How do IIMs expect such graduates to pass their CAT test?

The CAT result is less than 2% of the applicants who appear in this test, which means that only elite sages get admission into the IIMs programmes. It also means that the specialized knowledge of faculties is kept secret which is a waste. They should disseminate it and it would grow. Another dimension of it is that the IIMs are producing management graduates for the elite industries and financial institutions and now for MNCs.

Brilliant students will remain brilliant anywhere they go, though IIMs are polishing their skills. Once the late ex-Prime Minister Mr. Narishma Rao, while awarding degrees to the engineering graduates in a reputed national Institution, commented on a claim by the Director of the institute that the it admits students with a GATE score of 99 percent, by saying "then I doubt what your faculty is doing here".

Again Bhattacharyya from IIM (C) reacted to the issue of elitism. He argues that "It is a debatable point. I believe that higher education has always been viewed as some sort of academic elitism. IIMs are no different. Indian Government should improve opportunities for quality primary and secondary education to build capabilities among more students to participate in opportunities for higher education. It may not be appropriate for IIMs to lower its academic level to give opportunities to those who could not build capabilities in their early stages of education, may be for reasons beyond their control".

If the management graduates, for example, from IIM (A) and other IIMs, join an elite industry or MNC, why don’t the IIMs charge Rs 5-10 lakhs for each of their graduate (brand) as a contributory fund. Having done this, then the institutions could utilize that fund for scholarships to those students who can't pay heavy fees. Alternatively, such funds could be utilized in conducting programmes for the management graduates of less known institutions in order to enhance their skills and bring them up to the level of IIMs (remember, I am not talking about the faculty improvement programme for other institutions). "IIMs charge fees from enterprises that participate in placement. IIMs also have merit-cum-means scholarships," says Prof. Bhattacharyya.

Methods of Expanding the Student Cohort

Perhaps IIMs should start a two-tier programme: (i) Pre-MBA, and (ii) MBA. Those students, who score less in CAT but have potential to be groomed as managers, could be admitted in Pre-MBA programme. After successful completion of this programme then they could be admitted to the main MBA stream. This would ensure that the admitted students have developed their understanding and knowledge, communication skills, analytical, and intellectual approach to be eligible in a quality MBA programme. The MBA programme of Kellogg School of Management could be considered as a model in this case. This would ensure that quality managers are available in the booming Indian market. Lessons could also be drawn from current Chinese model on how fast Chinese are reshaping their B-Schools which were lagging behind 5-10 years ago. In a survey by Business Week (Chinese B-Schools Boom, January, 2006) reports:

"Walk into any classroom at one of China's elite business schools and what you're likely to see isn't all that different from what you would find at Harvard, Wharton, or MIT's Sloan School. True, there's a preponderance of Asian faces and the occasional smattering of Mandarin. But the classes, course materials, subject matter, and even the teachers are virtually identical to their U.S. counterparts". The report further states "With demand for management talent outstripping supply, elite Chinese universities have rushed to fill the gap. Top schools, such as Tsinghua University in Beijing and Fudan University in Shanghai, have joined forces with Western partners to offer state-approved MBA programs that have grown more than tenfold since 1991, when the government began licensing them."

Furthermore, some of the social responsibilities of IIMs would be fulfilled and save them from many of the public and intellectual criticisms. Two scholars from IIMs suggest that separate institutes may be established to meet the need of SMEs. They point out that recently, many private business schools have started catering to those needs.

If IIMs educational programmes are of high quality (I am not casting doubts rather giving reasoning), why thousands of Indian students still prefer to go to Western countries to get their management degrees? Of course, one cannot rule out other reasons for this, as some of them would like to work and settle in Western countries. However, it seems odd to me that IIM (A), for example, has 100 faculty members and it is producing less than 300 management graduates. Why should IIMs not double or triple their number of places?

It is to be noted that students going abroad for their MBA results in a significant flow of precious foreign exchange out of the country and also in millions of rupees loss to India. It has been argued, "When IIMs cannot meet the growing numbers of intake of students in India itself then it doesn’t make sense to open branches in other parts of the world. If IIMs can create a world-class MBA program in their hometowns then students would not try to seek admission outside India."

The Professor from IIM (C) remarks in this context : "There are many reasons for Indian students pursuing MBA course in universities abroad. Therefore, it does not lead to the conclusion that the quality of education in IIMs is not world- class. It is a matter of debate whether IIMs should set up campuses abroad. The spill over effect of establishing campuses abroad might be significant and will contribute in improving the quality of education in campuses in India. However, I agree with you that the priority should be to increase the intake in their Indian campuses".

Ease of Management Graduates Getting Jobs

Many IIMs and even the Management Faculty of Delhi University claim that their graduates receive 400% placement. Well, management students may be very happy with that claim but not the agents and intellectuals of educational reforms with that claim. India being a huge market with a population of 1.1 billion and anything can be easily sold out or absorbed in this market. Furthermore, by not increasing the intake in their institutions might have resulted in a big demand-supply gap. One issue here would be what percentage of IIMs graduates really join the public sector or government? Dr. MM Joshi recently remarks in this regard "India needs good managers in all fields. Our electricity, water supply, health, education, everything is mismanaged. Therefore, the IIMs must focus on these areas of social relevance first" before going global govt-restricts-iims-expansion-plans.html - 24k.

Setting up Overseas

By tapping the global market for management education, IIMs will generate extra revenues to fund their domestic expansion and reduce government grants and subsidies. At the same time, by offering incentives, IIMs may also attract talented faculty to improve the quality of teaching and research at home and providing a very conducive interactive environment for learning and development. This overseas expansion by these institutions will only add to their global brand equity without impairing their domestic expansion. At the same time, the global involvement of IIMs would help them tremendously in developing and updating better management curriculum and research. Further, this expansion will also promote the Indian social, cultural and educational values and skills overseas, resulting in high respect and pride for the country. Some one strongly argues that :

"We have to ride a wave visioning the future management needs in booming India and Asia. Indians are failing in top management offices as we lack global exposure even though we are highly capable. We dont want to handover all the top executive positions to Harvard graduates for no reason and keep working for their agenda in our companies" (Does India need more IIMs?).

On the other hand, some people argue that higher education may not be a commodity to be traded in international markets like steel and vegetables. Instead of currently opening its branches abroad to meet the requirements of NRI students and employees, IIMs, could design Distance Education to prove their quality education to the international world. India needs to emulate the IIM model across the country for business education rather than allowing them to open branches abroad at this juncture.

One scholar, Dr. Deshmukh from the US cautiously remarks in this regard :

"The expansion of IIMs is held as a global conquest of IIMs. I believe that IIMs may be in for a rude shock as they expand. Their lack of resources, lack of mission, and lack of research will stand out in the international arena. They may not get the best students and what they get may have alternate institutions for comparison (unlike captive Indian market). The lack of quality faculty may also become a major problem".

If IIMs are permitted to open branches in foreign land, there may also be a risk involved in the sense that, instead of attracting competent faculty staff, in fact the institutions may lose some of their existing faculty who will be moving out there. One may not rule out the possibility that local institutions and companies in those other countries may offer lucrative jobs to them because of their known qualities and competencies and some of the faculty members may leave IIMs. If they resign, how can IIMs or government stop them? Consequently, there may be a danger of exodus of competent faculty members from IIMs. This cannot not be ruled out when one considers the existing compensation packages paid to IIMs faculties. What safeguards are there to ensure that such things may not happen?

Again the learned Professor Bhattacharyya comments on the above apprehensions:

"The possibility of faculty leaving IIMs does not enhance by IIMs' opening branches abroad. Many of our faculty members visit abroad on assignments for periods ranging from three months to two years. More over, most faculty members have friends working abroad. Therefore, they come to know about opportunities there. Even if, the risk of IIMs losing faculty members enhances, the government has no means to mitigate the risk".

Other Issues

Now the time has come for all IIMs to adopt a four-level progression for the promotion of their professors and the salaries or compensation should be fixed according to these levels. The recently introduced new pay, grading and career structure system by the UK universities (Professorship Assimilation Process) could be considered as a model by all IIMs and the Government of India for the promotion of professors. At least, three international experts should examine their credentials for a rigorous evaluation. This would ensure a high quality of faculty promotion and not just depend on the traditional methodologies of conducting interview and/or a presentation before an audience.

Some argue that these suggestions are good, however, they need to be examined in detail and should be debated before implementation.

For the continuous education and training of the faculty members of IIMs, there should be several collaborations with international institutions both from Asia and West. Very liberal rules for the faculty mobility will ensure their updated knowledge and exposure to current trends and issues of interest to them. However, bureaucratic attitudes and outdated rules often create constraints in such mobility. I was a victim of these attitudes, before I left India.

Conclusions:

A review of the above discussions perhaps leads us to believe that it may be an injustice or unfair to some of the IIMs, such as IIM(A) and IIM(B) which have proven records of an excellent overall performance, that they should not be provided opportunities to open branches abroad specifically in Asia Pacific, Middle East and Eastern Europe. Hence, the Government of India should reconsider its policy on a rational basis, allowing selected IIMs to open branches. The wisest advice to the government would be that it should not throw the spanner in the works of some IIMs globalization plans rather may set certain parameters for this purpose: Don’t run them like government departments, value education and educators and be proud of their achievements. In this regard, very recently, Mr. N.R. Narayana Murthy, Chairman, Infosys remarks "India had failed to build world-class educational institutions due to government regulation in the higher education system giving limited opportunities to colleges and universities to adapt and change. The government must encourage competition through autonomy and independence from state funding. Institutes must place a stronger emphasis on innovation, R&D and the creation of new knowledge" Murthy on why India has few world-class colleges ?

Further, I would like to quote Dr. A. Deshmukh who teaches in a very reputable Business School in the US:

"For all the hype about India, we still remain a third world country. There are pockets of brilliance and our size gives us advantage. But do we have visionary leaders? Do we have a plan as to where we are going? I think these problems affect IIMs also, on top of it, we think that we are perfect! If we continue to grow with 8% rate, it may take us decades or even a century before we reach where US is today (per capita income )."

Dr. Prem Lal Joshi: The author is also Editor-in-Chief: IJAAPE, UK., Member of BOD, World Accounting Forum, USA. He is listed in Marquis Who’s Who in the World (23rd ed.) and International Who’s Who (2005).

• Professor (Dr.) Prem Lal Joshi, University of Bahrain . The author is also Editor-in-Chief: IJAAPE, UK and on the Board of Directors of World Accounting Forum. He is listed in Maquis Who's Who in the World (23rd ed.) and International Who's Who (2005-06)

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