Branching out: Have our B-Schools got it wrong?

Blog | Premchand Palety

India’s premier business schools, which have set up campuses in Singapore and Dubai as partbof their growth strategy, seem to have made some wrong operational calculations. For starters, they appear to have overestimated their brand equity. Instead of attracting foreign students, as was expected, majority of students they are getting are Indian who otherwise couldn’t make it to top B-schools in India and are willing to shell out about Rs10 lakh for a two-year programme abroad.

Xavier Labour Relations Institute (XLRI) has scrapped its intended full-time programme in Singapore reportedly for not getting sufficient number of “quality” students. The institute even got itself embroiled in a controversy for not returning the application fee to some of the prospective students. Now, it is running only a part-time programme there. This kind of branching out has resulted not only in flight of money but has also led to flight of faculty from Indian campuses, further accentuating pressure on our limited faculty pool.

The late 1990s and the beginning of the present century threw up opportunities for our top B-schools in Dubai and Singapore. Both the countries wanted to transform themselves into international education hubs. The Dubai government was responding to the need of Gulf countries to reduce dependence on oil and develop competencies in other ­sectors.

The 9/11 terrorist attack in the US hastened the process. Due to visa hassles and other restrictions, the youth of West Asia stopped looking at the US for higher education. In 2003, the Dubai government set up Knowledge Village in the Dubai Technology and Media Free Zone. Here, unlike in the rest of Dubai, international institutes are allowed to open stand-alone centres, instead of having to tie up with a local partner.

Singapore government, too, offered many sops to top-rated educational institutions for starting a campus there.

Making use of this opportunity, many colleges and universities across the globe, including Indian B-schools such as XLRI, SP Jain and IMT Ghaziabad, entered these countries. The Indian Institute of Management Bangalore (IIM-B) also made similar plans which were stalled by the human resource development ministry. The expectations were that these branches would be truly international in terms of student and faculty profile.

After speaking with some faculty members teaching there, the feedback I got is that the students admitted for the full-time programme there are mostly Indians, who got low marks in entrance tests back home in India. As expected, those campuses are facing faculty shortage, too.

The operational model of this kind of branching abroad is not appropriate. If, after spending almost Rs10 lakh, a student gets to study in an institute with Indian faculty and students, though in a different country, it’s no big deal from a return on investment perspective. If the same campus had been set up in some commercial Indian city, the value addition to students wouldn’t have been much different. For international exposure of students and faculty, there are already mechanisms at hand such as exchange programmes by which students and faculty can study or teach at foreign campuses for a term or more. This, I feel, is more effective and economical for students.

Against this backdrop, IIM-B should again consider its plan of setting up a campus in Singapore.

I believe that a good educational institution gives much more to a society than it takes from it. Even if one of our IIMs succeed in setting up a truly international B-school abroad with competent faculty, etc., like INSEAD did in Singapore, huge investments would have gone and we will end up servicing the population of Singapore or Dubai at the expense of Indian taxpayers.

There is nothing wrong with that, but should it be the priority? They have much homework to do before going abroad. Especially, when we have so many unresolved issues at hand. The biggest, of course, is the faculty crunch. IIMs need to make this their top priority. Like the ICFAI B-school in Hyderabad has done, each IIM should set up a centre to generate at least 50 well trained faculty every year. All the IIMs should also give priority to expand capacity here to about 1,000 students for each campus for their flagship programme. This way they will crowd out dubious B-schools in the country that are cashing in on the high demand for MBAs.

Other top Indian B-schools too need to work their strategy before branching out. Some of our B-school chief executives are obviously under pressure to increase business. If they plan campuses abroad they should first work on developing their faculty. They need to create an environment which motivates and enables faculty to grow.

Only highly competent faculty pool can make export of education truly effective. As of now they don’t have the intellectual pull to effectively service emerging international markets.

Premchand Palety is director of Centre for Forecasting and Research (C-fore) in New Delhi,from where he keeps a close eye on India’s business schools.