The world is in the throes of a slowdown. The subprime crisis in the US, runaway global crude oil prices and, in India, rising inflation have conspired to considerably dilute, if not wash away, the feel-good factor that was pervading the country till late last year.
But a visitor to the campus of any top B-school during the recently concluded placements season could be forgiven for thinking that the doom-and-gloom stories filling up the pages of newspapers these days were actually reports from another planet.
For the truth is that the MBA bandwagon has continued to roll—and how! The top, average and median salaries at the IIMs (Indian Institutes of Management) and other leading B-schools have continued to boggle the mind and recruiters have shown little signs of fatigue, never mind the shrinking margins and weakening outlook all around.
Part of the reason, of course, is that the top 30 or so Indian B-schools cater to only a very small— some would say tiny—niche in India Inc.’s universe, which is globally competitive.
Then, the companies in this niche—mostly from financial services, IT, telecom, retail, infrastructure, manufacturing, FMCG, durables and hospitality—are in growth mode and, so, need fresh talent to take their ambitions forward.
And, even as demand for top-drawer management talent has grown in India, its supply has remained more or less constant. Yes, quality new institutes like the Indian School of Business, Hyderabad, and the Great Lakes Institute of Management, Chennai, have come up in recent times, and the Government of India is opening another Indian Institute of Management campus in Shillong, but the incremental numbers of MBAs they mint will be too minuscule to make any difference to the demandsupply equation.
In a contrarion way, the undiminished demand for graduates (or, rather, post-graduates) from the top B-schools also points to the sad state of affairs elsewhere in India’s B-school universe.
For the fact is that barring the top schools featured here and a few others we’ve left out, the quality of education at a majority of the 1,400-odd business schools in India is quite abysmal.
So, what does the sixth Business Today-Nielsen study of India’s Best B-Schools tell us about the state of India’s B-schools? Lots, actually, but first, a quick word about how Business Today and our knowledge partner, The Nielsen Company, conduct this survey and how it’s different from, and more market-focussed than, other B-school surveys in the market. By “market focussed”, we mean we survey all the “stakeholders” of a B-school— MBA wannabes, recruiters, young executives, current MBAs, HR heads and functional heads of companies.
Therefore, we do not try to rate parameters like the number of academic papers written by a B-school’s faculty or how many books it has in its library. Then, we apply Nielsen’s proprietary Winning Brands model on eight parameters—reputation, teaching methodology, infrastructure, placement, admission eligibility, faculty, specialist units and quality of placements—to figure out the standing of a B-school, both with wannabe MBA students as well as with the recruiters who will recruit these students once they graduate.
So, what does the 2008 survey tell us about the relative brands of the top 30 B-schools in India? Which ones have gained and which ones have lost ground? There is no change in the rankings of the top 5 B-schools. IIM-A (Indian Institute of Management Ahmedabad), IIM-B (Indian Institute of Management Bangalore), IIM-C (Indian Institute of Management Calcutta), Symbiosis Pune and IIM-L (Indian Institute of Management Lucknow) retain their positions at the top of the pecking order. IIM-A, in fact, retains its position at the top of the heap for the sixth year in succession.
But there’s one caveat. Though the Top 5 B-schools have retained their positions, they have to share this honour with another iconic peer. Xavier Labour Relations Institute (XLRI) Jamshedpur breaks into this august list this year—at joint #5, up three places from its #8 rank last year.
Beyond the Top 5, there’s a fair amount of churn in the rest of the list of Top 30 B-schools in India. FMS (Faculty of Management Studies) Delhi, which had slipped to #12 last year, from #8 the previous year, has clawed its way back among the Top 10 this year, and has clocked in at #9, while Narsee Monjee Institute of Management, which had climbed from #17 in 2006 to #10 last year, has fallen to #13. BIMTECH (Birla Institute of Management Technology) Delhi is another institute that has gained six places—to #15.
Two Mumbai-based institutes, K.J. Somaiya Institute of Management Studies & Research and Welingkar Institute of Management Development & Research, which had shot to prominence last year with ranks of #17 and #15, respectively, have slipped this year to #22 and #23—a significant fall, but still very respectable, nevertheless. The surprise package, in the lower half of the list, comprises three newcomers to the list— IMT (Institute of Management Technology) Ghaziabad and NIM (Nirma Institute of Management) Ahmedabad are joint #24 on this year’s list of 30 best B-schools, and FSM (Fore School of Management)Delhi debuts on our list at #27.
An interesting point that emerges from this year’s India’s Best B-schools Survey is the relative improvement in the brand equity of most of the Top 30 B-schools. As many as 19 of the Top 30 B-schools have registered an improvement in their overall Brand Equity Index (BEI) score; one has seen no change; there are three new entrants to the list; and seven have witnessed a decline in their BEI score. Overall, IIM-A remains the only “Monopoly Brand”, with a BEI score of 5.15, an improvement over last year’s score of 4.82. Also like last year, IIM-B remains the only “Distinct Brand”, with a score of 2.49 (compared to 2.35 last year). Last year’s “Undifferentiated Brands”, IIM-C and Symbiosis Pune retain their status this year and are joined in their league by IIM-L and XLRI Jamshedpur.
How were these scores determined? Overall, admissions eligibility, reputation and infrastructure were important factors in building brand equity. Then, the quality of placements was more pronounced in comparison to last year across categories of respondents.
And faculty and teaching methodology emerged as important factors both among student and non-student respondents. So, what should institutes be doing to climb up the totem pole? The survey suggests that they should focus on the eligibility criteria for admissions, quality of placements, quality of faculty and reputation. HR heads, in fact, chose the first as the most important factor, while MBA wannabes, perhaps expectedly, felt the quality of placements was the decisive determinant of choice.
Incidentally, second-placed IIM-B runs leader of the pack IIM-A close, and even leads, on some of the eight factors on which the B-schools were rated. Interestingly, third-placed IIM-C, too, scores more than IIM-A on two—success of placement and quality of placement. The factor scores of the top 5 institutes, in fact, are not very much different from each other. Thus, it is awareness and consideration that makes IIM-A the leader of this elite list of institutes. In the pages that follow, we have explored some of the findings in greater detail.