Changing trends in Management Education

All leading experts agree that Management Education is undergoing significant changes both in India as well as rest of the world. In this article, we will examine the reasons why this is happening and what are the trends we can expect in the future. We will look at changes happening in leading B-schools in India and the top ranked ones in the USA and Europe. The latter often set the trends that others follow.

So what is driving this change? There is dissatisfaction from both employers as well as students.

For employers, a major concern is that while MBA graduates’ learn theory, they know very little about implementing solutions in the real world. They are not able to cope with situations where seemingly great plans don’t get implemented. Or seemingly logical arguments don’t get accepted. Or when people agree that they will follow a course of action but don’t.

As far as students are concerned, an MBA degree from most B-schools in India barring a handful, is no longer a guaranteed ticket to a well-paying job. And with the rising cost of education, the opportunity cost for working professionals is just too high if they have to sacrifice income for two years.  

As per a report published in April 2013, there were 3900 management schools in India. And the number of AICTE approved seats for studies in Management grew in a 5-year period by 180% while GDP grew by only 50% during the same period (Professor Anindya Sen, Dean (Academic) IIM Calcutta). Clearly there is overcapacity in the MBA market which is why several hundred B-schools in the country have closed down in recent years. Here are some further trends in management education that we can expect over the next decade:

1. Looking at a global perspective

In an increasingly interconnected world, managers will have to know how to operate in different countries and continents. They will need to have an appreciation of the economic and cultural differences that exist.

Perhaps the institute that is taking the maximum steps in this direction is INSEAD. It began with one campus outside Paris, added another in Singapore and also has an alliance with Wharton School. It has regional centres in Israel, Abu Dhabi and New York. It also offers a dual-degree executive MBA program at its Singapore campus in collaboration with Tsinghua University in China.

Several other international and domestic B-schools have taken similar steps. However, there are many other steps that will need to be taken for true globalization.

Developing international exchange programmes is one of them. At BML Munjal University (BMU), for example, all MBA students have the option of studying a Global Leadership Module at Imperial College, London.

2. Specialized MBA courses

B-schools in the USA offer specializations in areas such as Energy, Brand Management, Supply Chain Management and HR. This trend has already found its way to India.  BMU offers an MBA with a focus on Forensic Accounting and Corporate Fraud – a first in the country. NIIT offers specialized courses focusing on the Banking sector. IIM Calcutta has a specialized course on Production for executives with relevant work experience. This trend will accelerate with time.

3. Shift away from the 2-year full time MBA

The traditional 2-year MBA will decline in relative importance over time. One year MBA, part-time MBA, Executive MBA, specialized Master’s degrees, online MBA, corporate training and development have already made their mark.

In the USA the traditional 2-year MBA accounts for only 40% of the MBA degrees awarded. In Europe, the one year MBA degree is already number one.

In India, the online MBA offered by various IIMs has gained significant traction.   

4. Move towards inter-disciplinary offerings

The report of the Core Curriculum Subcommittee at the Yale School of Management stated, “Management education is compartmentalized by function even though management challenges no longer are. The result is a disconnect between what is taught and what is needed”.

To remove this disconnect, several leading B-schools have reformed their MBA programs to integrate content from multiple functions. More interdisciplinary offerings in classes, for example, where marketing, strategy and OM faculty come together to teach a course, are seen as the way forward because in real life situations most issues have multiple dimensions.

Take the traditional management course of Financial Risk Management. For example, if the project under consideration is the laying of a pipeline to transport gas over land from Iran to India, analyzing financial risk alone would be inadequate. There would be country risks, engineering risk, systemic risks and more. At BMU there is an interdisciplinary course called Enterprise Risk Management which is taught by multiple faculty from the Management and Engineering schools. When you break down risk into functions, you lose the bigger perspective and don’t integrate individual pieces into the macro environment.

5. Ethics and Corporate Accountability

The collapse of companies such as Enron followed by the global financial crisis of 2008 brought this area into sharp focus. Americans in particular were outraged that the same executives who had caused the meltdown of 2008 were being rewarded with multi-million dollar bonuses. India too has had its share of scams such as Satyam.

Ethics and social responsibility has been a part of the Harvard Business School curriculum from the time of its founding. Now it is being increasingly adopted by B-schools all over the world.

Corporate scams continue to take place with depressing regularity even post 2008. Toshiba in Japan, Volkswagen in Germany and Kingfisher airlines in India are some examples. As a consequence, B-schools will increasingly focus on this aspect in their curriculum.

6. Entrepreneurship  

There has been an explosion of interest in this area of late, particularly in India. In fact, India was the third largest recipient of angel investor and venture capital funding in the world in 2015, receiving over 7 billion USD for start-ups. In response to this trend, courses on entrepreneurship will form an increasing part of the MBA curriculum. These will cover aspects such as identifying potentially valuable opportunities, obtaining capital, understanding the regulatory environment as well as managing the business in different stages of growth.

To conclude, it can no longer be business as usual for business schools. There is pressure on them from both the customers they serve (students) as well as the markets they cater to (employers). Only those B-schools who adapt to the changing trends will survive.

About the Author: Prof. Davinder Singh is the Associate Professor – Strategy & Innovation and Assistant Dean, School of Management at BML Munjal University.