Tracking History of Management Education

The history of Management education, particularly MBA programs is rooted in the times of industrialization which first began in Britain in the 18th century and quickly spread to other parts of Europe and rest of the world. Societies, prior to that, were predominantly agrarian and rural, which, permanently changed to industrial and urban with introduction of the transcontinental railroad, the cotton gin, electricity and other inventions. 

The early MBA courses were mostly training programs in accounting and bookkeeping. Those were regarded as sufficient for running a business. The Aula do Comércio in Lisbon, established in 1759, was the first institution to specialize in the teaching of accounting in those times. Gradually need for skilled management professionals started rising with the growing corporations. This led to the start of Business Schools. ESCP Europe, established in Paris 1819, happened to be the first one that now has campuses in several other European cities viz. Berlin, London, Madrid, Paris, Torino, and Warsaw.

This trend quickly touched United States of America (USA), which became the leading country for management education with the established several Business Schools in quick succession. Wharton School of Business (University of Pennsylvania)  in 1881, Haas School of Business (University of California in Berkely) in 1898 and Tuck School of Business (Dartmouth College) in 1900 were the early ones followed by many others, subsequently.

These B-schools used to offer many variants of degrees in management. Master of Business Administration (MBA) as a standard degree with a defined curriculum was started first time in 1908 by the Harvard University Graduate School of Administration, now known as Harvard Business School. Since then MBA is now adopted by most of Business Schools in the world as their flagship program.

The idea of similar programs for working executives was brought out at Massachusetts institute of Technology (MIT) under Sloan School. This was the first 'Leadership Education Programs' conceived  to train corporate executives. Today this is rechristened as executive MBA degree and is regular feature of majority of the business schools in the world.

MBA programs gradually evolved and spread across the world as the most popular choice of students aspiring to be part of the corporate world. In Europe, several Business school started offering MBA degrees, of which INSEAD operational since 1957, gained high reputation in short period of time. Started by Georges Doriot, a French-American professor from Harvard Business School, MBA from INSEAD is considered today as one of the top rated program in world. Over a period of time, management education spread far and wide in acceptability, particularly, variants of MBA program gradually evolved as the most popular choice of students looking for a promising career in the corporate world.

Management Education in India

In India, the earliest history of MBA is traceable in three institutions: XLRI (Xavier Labor Relations Institute) in Jamshedpur founded in 1949; Indian Institute of Social Welfare & Business Management (IISWBM), Kolkata established in 1953 and Faculty of Management Studies (FMS) under Delhi University established in 1954. Among these, IISWBM was the first institute to offer MBA degree in 1953. 

IISWBM was started by the British government to train and produce qualified labor officers to support various factory operations, especially its ordnance factories. Post Independence, the institute came  under the patronage of West Bengal Government and Calcutta University of Calcutta. It retained its character and focus to promote management education and received the full support of the local business community for the same. Later, it enjoyed the priviledge of serving as a mentoring institute for the Indian Institute of Management, Calcutta (IIM-C) in its early days of inception.

Later on, many other universities established their Business Schools in the 1950s and began offering the MBA program to a selected set of students. However, a fillip to management education came through the establishment of the Indian Institute of Management (IIM) at Calcutta and Ahmedabad under the aegis of the Planning Commission with support from the internationally renowned business schools of that time. IIM Calcutta was mentored by MIT Sloan School of Management, and IIM Ahmedabad was mentored by Harvard Business School. Encouraged by success of these, two more new IIMs were recommended by a committee headed by Ravi J. Matthai in 1972. As a result, IIM Bangalore came up in 1973 and IIM Lucknow in 1984. Today IIMs are brought under a new IIM Act 2017 declaring them as 'Institutions of National Importance' by Government of India (GoI) thereby giving them more autonomy in deciding their courses, fees and handling day-to-day operations. IIMs have grown in number (now 20) and operational under an IIM coordination forum. 

Since then, management education has been in constant demand in the country particularly in the post-economic reforms era. This is reflected in the number of business schools currently established in India. Today there are >5000 business schools in India with almost every university, technical institutions, IITs, NITs offering MBA programs in both the government and private universities. 2016 report of ASSOCHAM counts a total of 5,20,000 seats (more than CAT aspirants) in MBA courses, compared to 3,60,000 in 2011-12. However, barring a handful of top business schools like the government run IIMs, IITs and few others, most of these B schools are producing sub-par graduates who are largely unemployable; only 7 per cent of the MBA graduates are actually employable; and hardly 1% jobs are managerial levels. It is clear that the growth of management education is more on the quantity reflected by a large number of B-Schools. However, quality of MBA education could not keep pace with the need of the time.

To push quality, Government of India (GoI) has sought opinions from many committees to improve the standards of management education in India including the Prof. S. L. Rao committee in 2005 and the Bhargava Committee in 2008 among others. These committees identified specific concerns with state of the art and suggested reformative measures. Some pressing concerns include the relevance and coherence of the curriculum and quality and applicability of research among others. Several measures were suggested to improve on these counts. One significant one was to track progress by developing a national ranking of the business schools and participating in international accreditation programs.

The review done by the working group under the chairmanship of Prof. S. L. Rao was initaited by National Knowledge Commission (NKC) in 2005, which also referred to previous reports on management education since 1991:

• Kurian committee report – 1991.
• Ishwar Dayal committee report – 2001.
• The management education review committee report – 2003.
• U.R.Rao report on faculty development programme – 2004,
• All India Management Association (AIMA) document prepared in 2005.

A number of challenges are identifiable now, for instance:

• India, despite having a large number B Schools, efforts in updating curriculum and pedagogy is often very irregular. Forget about scholarly debate or any innovation, which is almost non-existent.
• There is hardly any effort on developing capacity among Indian B Schools to widen the finer aspects of curricula and pedagogy, such as cases and other teaching materials about great Indian examples.
• While, historian have revealed that India was a great economy prior to 1500 AD with a share about 60% of global GDP, there is no effort to find practices and compile the best then and those happening today. These could have created a vibrant class room environment and unique lessons complementing what is being learnt by graduate otherwise from western examples.
• There is less clarity on changing demand for Management graduates. While premium level (expensive education) is more rewarding for everyone, quality of programs are not many. Demand-supply numbers are also quite vague.
• Research impact of Indian B Schools is negligible while their research output is nothing to take pride off. On the other hand, there are plenty of opportunities around to be more impactful entity via bringing out kind of research eagerly awaited.
• Indian B Schools should feed into national development programs such as Make in India, Digital India, Swachh Bharat, Atmanirbhar Bharat etc. There are many ways to do that- undertaking studies, developing tools and framework, conducting knowledge sharing workshops, preparing strategy/white papers etc. Eventually every subject matter require a think-tank, which Indian B School should fulfil.
• Opportunities arising out expanding global trade and emergence of new economic block such as Regional Comprehensive Economic Partnership (RCEP), should be explored.
• Being interdisciplinary subject, influence of management education is experienced far and wide. Hence scope of management education should be made quite comprehensive – expanding horizontally and vertically both with adequate local autonomy.

Bhargav Committee constituted in 2008 to review the functioning of IIMs, resonated these concerns and made important observations: research output being weak and IIMs are seen anything but a place of thought leaders. It is expected that IIMs would enhance their brand image and become thought leaders.

These were woven in the new IIM Bill 2017 passed by the parliament on 28 July 2017 and it offers adequate autonomy to Board to Governors (BoG) to run these institutions keeping in view interest of the country needs, which should be ascertained periodically.

Are these 'country needs' known to the BoG or ascertained by Boards periodically- is a big question mark.