The Future of Management Education in India – Part 1

Future of Management Education

Over the past few months, business periodicals have been bemoaning the sorry state of affairs in business education, especially in the United States. Forbes, for instance, had an article talking about the MBA degree being in crisis, while the Financial Times carried an opinion piece about the disruption in the management education field. For us, in India, this comes as a big surprise, as we seem to be hitting the boom times in the MBA education field.

There are several distinct streams of evidence for the plight of management education in the developed world. Taking the U.S. as the archetype of the MBA education environment, we will see what are the portents that scare many people. We can then contrast it with what is happening in India, and see if any factors are applicable here as well.

There is a decline in the applications for MBA programs, starting from the top-ranked programs and permeating all the way down. Estimates of the drop in the number of applications vary, but even Harvard appeared to have suffered a 6% drop in the number of applications to its flagship MBA program. Many schools are reported to have double-digit declines in the number of applications, some as high as 20%. Many reasons have been provided – an economy that has started seeing more job creation, an administration that appears to be unfriendly to foreign students at US schools thereby discouraging the foreign student from seeking a US MBA, a very high cost of obtaining an MBA degree; all of these are touted as causes for the decline in applications to MBA programs.

Strikingly, there has not been much talk about the declining desirability of an American MBA qualification. Over the past 10 years, we have seen more non-US institutions break into the upper echelons of the business education sphere. Schools in China, India, Australia have started invading the turf of the top-ranked schools, while the European schools are becoming more established at the top. Perhaps the rest of the world feels that you can get a US-quality education outside the US itself, of course at a much lower cost.

Obviously, a decline in applications is also accompanied by a decline in enrolments. A disturbing trend is that some schools have had such big drops in enrolment that they have closed down some programs altogether, or converted the on-campus traditional program to an off-campus, online one. Boston University, Iowa State, and other schools have tried to change their strategy, and have eliminated what they see as high-cost programs, requiring a lot of fixed costs, and are pursuing a digital strategy.

Some pundits have pointed to a growing trend against the capitalist ideas that are the basis of the MBA education – they point to the emergence of behavioral finance as undermining the traditional notion of a market economy, and to the growing environmental and social movements against “big business. These critics point out that unless MBA programs change their focus and concentrate on being more people- and planet-oriented, MBA programs will wither and die.

Do these trends foretell what is going to happen in India? If so, how should Indian management education institutions respond? We will focus on these topics in future articles and see how the situation in India is very different from what we have outlined, but how the challenges are even more demanding to overcome.


By Dr. Ashok Natarajan
Professor, Rajalakshmi School of Business, Chennai
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