ISSUES & CHALLENGES FACED BY MANAGEMENT INSTITUTIONS IN THIS CONTEMPORARY SITUATION OF INDIAN ECONOMY

ISSUES & CHALLENGES FACED BY MANAGEMENT INSTITUTIONS IN THIS CONTEMPORARY SITUATION OF INDIAN ECONOMY Prabakaran.V 1, Gowtham.B 2 & Krishna Priya.S 3 1 Prabakaran.V, Assistant Professor, Department of Management Studies, SNS College of Technology, Coimbatore 641 035. 2 Gowtham. B, Student, Department of Management Studies, SNS College of Technology, Coimbatore 641 035. 3 Krishna Priya. S, Department of Management Studies, SNS College of Technology, Coimbatore 641 035. Abstract:During pre liberalization only 50 Business Schools was available in India. At present, 3556 business schools are available in India with varying level of intake capacity. Quantitatively, the growth of business schools is impressive. But, there is no sign of equal amount of increment from demand side. Many institutions are struggling to survive due to inconsistent in quality deliverable, quality faculty, education system and its regulatory mechanism, etc. On this background, the study aimed to understand the issues and challenges faced by business schools in India in the emerging scenario considering challenges such as threats of new coming institutes, academic curriculum, industry interactions, institute rankings, promoting research culture and faculty quality. Also the study revealed considerable suggestions on the development and sustainable growth of business schools. Keywords: B-Schools, Education in India, Education System, Management Education, Quality of Faculty, Regulatory Framework. I. INTRODUCTION Few years ago, management education was the platinum card for entering into global market. Due to heavy competition, the scenario has changed remarkably. More than 3,00,000 students are getting their MBA degree in a year, but not all of them having competency to fight in the international market. Inspite of getting a degree, they could not clear the campus recruitment process and to get placed in a reputed company. The basic objective of any business school is to inculcate business knowledge in the students mind, impart decision making skills, entrepreneurial skills, etc. But the regulatory mechanism failed to adopt contemporary developments in the academic curriculum. Majority of the business schools never take initiatives for the development of the students and they teach only what is available in books and ensure their degree after two years. It s high time for the business schools to wake up and find out their threats in the market for their sustainable development. By considering this, the study was aimed to analyze the issues and challenges faced by the business schools in the contemporary situation in this dynamic world. II. EVOLUTION OF MANAGEMENT EDUCATION IN INDIA Every year 3,00,000 degree holders are coming out of management institutions in India. The liberalization of Indian economy during 1990 s was responsible for this development. In India, the management education started its tenure during 19 th century. The first business school had begun its operation during 1903 in the name of Commercial School of Pachiappa Charities. Sydenham College in Mumbai was the first college level business school founded in the year 1913 by Shri Ram College of Commerce. During that period, students were interested to join in science stream and not shown interest in management education. In 1961, two IIMs were launched. IIM, Calcutta was established with collaboration from Sloan School of Management and IIM, Ahmadabad was launched with the help of Harvard Business School. As the management education started growing, more IIMs were established in many cities. The growth of Business Schools was double during post liberalization period. ICFAI set up its schools in the year 1994 and it has opened many branches all over India. IGNOU also extended its hand in spreading management education in India. Later 2000, the competition among the business schools was raising to attract creamy layer students. They had tie with many foreign universities to give greater exposure to the students and also there was a frequent change in teaching pedagogy to facilitate the learning process. All Rights Reserved 2016 IJORAT 9

Growth Percentage International Journal of Research in Advanced Technology - IJORAT Since number of management institutions and their intake capacity was increased than the exact demand, the students preferred the institute offers quality education. Late 2006, the number of institutions was terribly increased as people started to perceive this as a business. They concentrate more as revue generating business rather than concentrating on quality. The below table indicates the growth pattern of business schools and its intake capacity in India since 2006. TABLE 01: Growth Pattern of Business Schools in India S.No Year Total no. of Business Growth Growth Intake Schools Percentage Percentage 1 2006-07 2614-247201 - 2 2007-08 2915 11.5 275666 11.5 3 2008-09 3120 7.0 295052 7.0 4 2009-10 3290 5.4 311129 5.4 5 2010-11 3469 5.4 328057 5.4 6 2011-12 3541 2.1 334865 2.1 7 2012-13 3471-2.0 349369 4.3 8 2013-14 3364-3.1 354421 1.4 Source: AICTE, New Delhi 14 12 10 8 6 4 2 0-2 -4 2007-08 2008-09 2009-10 2010-11 2011-12 2012-13 2013-14 Year Institute Growth Percentage - Intake Growth Percentage - Fig. 1 Growth Pattern of Business Schools in India During the year 2012 & 2013, the number of business schools was reduced since many institutions were closed due to its inefficient management. However, the successfully running institutions were increased their intake capacity, as they wish to penetrate more in to market and as well to increase their revenue pattern. As on June 15, 2015, 3556 management institutions are available in India. III. DEMAND AND SUPPLY The number of business schools existed in India has almost tripled during the last five years and as well existed institutes increased its number of intake capacity. There is no much of incremental sign from demand side; students show less interest to pursue management education. The job opportunities available in this country are also not booming as equal to increase in number of available management seats. Study says, only 29% of students are getting a campus placement (excluding top 20 business schools) compared with 41% during 2008. So, to attract students, the management institutions are started to projecting their placement record. The Indian education system allows two type of management program. MBA course approved by AICTE and affiliated to some university. The number of approved seats is restricted and fee fixation is also influenced by its respective state government. The other course is Post Graduate Diploma accredited by AICTE. But it has no standard curriculum and having no external influence by the state government. They may offer the course at a high price since their curriculum is more industry oriented, which leads to get good placement. All Rights Reserved 2016 IJORAT 10

Institute like IIMs, ISB are admitting students without any difficulties as they have good reputation among the students community. Though their fee structure is higher end, students prefer to join. Tier 2, tier 3 or middle level business schools are struggling to fill up the approved seats. They also pay up to Rs.40,000 to the management consultant to fill up a seat. They also influence the present student to refer prospects and pay accordingly. This is spoiling the education system and the mindset of the students. The management force to fire few faculty members if they don t get the admission filled. They cannot spend money for their operational expenses, hence the faculty also invariably forced to ensure the students admission to safe guard their job. The institute pioneer in this kind of activities may get sufficient number of admission; rest with difficulties in running the institutes. IV. IMPORTANCE OF MANAGEMENT EDUCATION Developed countries and developing countries require effective management of available resources, said by Peter Drcuker. Management education has opened the eye on every individuals, society & organizations. Management education will facilitate the entrepreneurial venture and help in establishing new business. In this dynamic environment, business is always venture with risk and the role of a manager is to face the risk and resolve it successfully. A real manager is not only managing complex business situation, but also to handle the problems which is common to all individuals life that bring satisfaction. The teaching community guides the students to meet the challenges in this dynamic world and also help them in choosing their career. V. LITERATURE REVIEWS Quantitatively, it is an impressive growth of management education in India since liberalization. However, the quality of education delivered by most of the institutions is the disturbing aspects of this positive narrative. Premchand, an active member in ranking India s business schools concluded after thorough review with various business schools, around 1.5% of the total number of business schools is having the systematic process to deliver the quality education. Many institutions are functioning as placement agencies, and many were inefficient to deliver quality education. During the year 2000, 70% of the colleges did not have a faculty who authored a case or research paper or book. About a decade ago, approximately 20 business schools had their own journals. At present, many institutions are having own journals, but not more than 10 are meeting with the international standards. Finally he, concluded that many institutions were lacking in quality faculty members and negligent important were given to entrepreneurship development. Many business schools were closed after 2008, due to weak regulatory mechanism & concentrate more on profit without quality. Students graduating from those institutions were unemployed and they spread negative word of mouth about those institutions. As a result of this, institute could not able to fill the sanctioned intake and hence forced to close the institute, said by Rahul Choudaha. Due to lack of clear cut vision and mission, around 185 business schools were closed during 2012 and another 150 institutions are struggling to continue its presence, Saraswathy, M. People who afford for a greater investment had a great opportunity to start up an institute and fulfilled the gap between demand and supply, said Dhiraj Mathur, executive director at Price Water House Coopers. VI. QUALITY OF EDUCATION AND CORPORATE EXPECTATIONS The quality and standard of business education in India is not equal to the standards at China. Association to Advance Collegiate Schools of Business (AACSB) accreditation provides international recognition for business schools. In India only four institutes got this certificate, in compared with 20 institutes in China. The scope of a business schools is not only to train the students technically and being expertise in his/her domain, but also to develop them with good attitude. This is the most important criteria that corporate expects to recruit a candidate. The other expectations of a corporate are as follows. A candidate must have willingness to learn. A management graduate must be an outcome oriented. The candidate not only knows how to plan, they should be an action oriented. Students should work as a team. A graduate must respect others and be open to the ideas and opinion of others. Over riding the above, a management student must have entrepreneurial attitude and public interest. All of the above, India is lacking in number of entrepreneurs coming out of a business schools in a year. India has significant entrepreneurial talent, but it require major reforms to unleash it, study carried out by Gallup. India secured 166 th place out of 183 countries with regards to number of entrepreneurs starting a new business in a year. This figure remains unchanged since 2011, indicates the business initiation carried out in our country for opening a new business. VII. CHALLENGES FACED BY BUSINESS SCHOOLS All Rights Reserved 2016 IJORAT 11

Though number of committees have suggested many improving factors for the growth of business schools, the researcher have selected the below important issues. The researcher felt the below issues are the most important and having higher level of threat to the existing institutions. Many researchers are also stressed upon the below facts are the possible threats to the business schools growth. Threat from upcoming Business Schools: Late 2006, many business schools have been established and captured smaller amount of market share by giving fake promises to students. Though they do not offer quality education, the students select those institutions due to lower fee compared to premier business schools like IIMs. Sooner or later, those institutes may shut down their operation, as students passing out from that institute may not be placed in a reputed company. The negative word of mouth will pull them down. Academic Curriculum: Many institutions have not changed their academic curriculum which are outdates long back. The affiliated institutions need to follow the syllabus framed by their affiliated universities. Few institutions/universities do revise/update the curriculum in accustom with industry requirement. By doing this, the gap between industry requirements and the delivery by the academician were nullified. The outdated curriculum may not be sufficient to develop the students to the international standard. Quality of the faculty: This is the most important criteria to be a successful intuition. But, most of the institutions failed to retain or acquire quality faculty. They may not have adequate industry exposure or exposure with consulting activities. Currently industry is facing 30% shortage of faculty and the figure may go up 50% if this situation doesn t change, Dave, 2011. Education as business: Most of the business schools are managed by its Charitable Trust or Educational Society where the Trustee from the same family having the powers to manage the institute. In order to safeguard the interest of others, AICTE has advised the institute to form a governing council composition of both industry and academia. However, many institutions are not following this regulation and showing a fake numbers in their mandatory disclosure. The quality outcome of the meeting is not revealed anywhere. Due to the absence of external influence / opinion, there may be a possibility of bias and driving the institute away from its actual vision. Promote research culture: The management Institutions are started to recognize the importance of research, but not all the institute. This requires a good learning resource centre, and expects the senior researchers to guide the juniors. The scholars may be invited to do research in the area of management with international interest. Unfortunately, we do not have many supervisors having sufficient knowledge in the field of management to guide a scholar. Interaction with industry: This is one of the parameter where Indian business schools are lacking to fulfill. Many Indian business schools did not have any mechanism to interlink the academic curriculum with the industry. Foreign business schools are very strong in this through teaching, research, consulting and final placements. Though few business schools in India are in this tract, many other business schools are yet to start. Institute recognition like ranking and accreditation: Many institutes do not have a process and record of the activities/achievements carried out recently. Strong process and documentation is required to get an accreditation. Nowadays, institute go for accreditation to eligible themselves to charge extra amount in their tuition fee. The mindset of getting accreditation should be changed from generating additional revenue to improving quality of the system. Employability of the graduates: Though employability should not be the main motto for any business schools, it also requires fulfilling the interest of the students. Many business schools are incapable to place their students through campus recruitment. As saying goes, satisfied customer will bring new one, the satisfied student will bring loyal to the institute. VIII. CONCLUSION Business schools across the country are facing the unique crisis of unfilled seats. All the aspect of business education such as quality of the students, education system, governance, faculty quality & research are under critical scanning. Revamping of business education is required in order to get sustainable growth and to meet the expectation of the stakeholders. A broad consulting with all the stakeholders will bring a holistic view of effective business school management. Business schools have no choice but to cope with the changing dynamic environment and to produce future managers equipped with decision making skills, leadership and team work. In addition to the above, the academic curriculum to be modified with industry requirement, building social & ethical values, etc. In other words, All Rights Reserved 2016 IJORAT 12

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