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Govt as control-freak will dent the IIM brand equity

by R Jagannathan  Jan 29, 2013 13:04 IST

#B schools   #CAT results   #HowThisWorks   #IIMA   #IIMs   #IITs  

The Indian political project of ensuring mindless uniformity and mediocrity in some of our elite institutions continues unabated.

After ensuring that our IITs are well out of global rankings – none feature in the top 200 – efforts are now on to make sure that the Indian Institutes of Management (IIMs) also face the same fate.

The device being used is the same one used for the IITs – a new law which will bring all 13 IIMs under one council to coordinate all their activities. An Economic Times story today says that the stated intent is to “declare the IIMs to be institutes of national importance with a view to foster excellence in management education and to usher in more transparency and uniformity compatible with institutional autonomy of these public institutions".

The intent seems holy, but look at the unholy side objectives. Apart from coordinating the activities of the IIMs, the top council will also “recommend scholarships for backward castes and classes and perform other functions referred to it by the centre. It will also submit a report to the government on each IIM after a review, and recommend actions that the government would take.”

Agency.

If IIMA is to truly become a big global brand, it needs more autonomy. Agency.

Looking at the way autonomy has been consistently eroded in every educational or even commercial institution in India, one can guarantee that far from “fostering excellence”, most established IIMs will be busy “performing other functions” and looking over their shoulders to figure out what their political masters want.

The strategy being used by the government to ensure that all IIMs kowtow to their political demands is simple: divide and rule.

The run of events is always the same. First announce mindless expansion in the name of creating more capacity – hence 13 IIMs. Then pit the new ones against the older, more established, IIMs and criticise the latter for not being inclusive. Then demolish the remaining autonomy of the best institutions and take political control.

Just as the government used some of the directors of the weaker and less established IITs to claim that the majority were in favour of the changes proposed, this time too the same policy is being used: the newer IIMs, which are yet to establish their faculty strengths, track records or connect with industry, are being used to target the older IIMs which have already established their brands.

The carrot being offered to lure the newer IIMs to the idea of a all-powerful coordinating council is that they will become national institutions which can award degrees, rather than just diplomas.

The ET report quotes Gautam Sinha, director of IIM-Kashipur, as saying that foreign students would now be attracted to the IIMs if they can award degrees.

This is a bit thick. Thousands of alumni from the older IIMs now adorn boardrooms all over the world, and none of them was particularly handicapped by the fact that the piece of paper they carried said Diploma rather than Degree.

What is clear is how the government is using the Kashipurs to target reluctant IIMs like the one at Ahmedabad, which has nothing to gain from centralisation and further government interference. Kashipur’s director makes no bones about the fact that the government has a huge say in its working. He told ET: “For us, the government already has a say in our governance since they fund us.”

The key issue of conflict that the government is exploiting is this: the new IIMs want to leverage the resources,  brand strengths and faculty advantage of the older IIMs so that they don’t have to do the hard work themselves; the older ones obviously don’t want their equity diluted by giving the new IIMs a free ride.

As things stand, the IIMs at Ahmedabad, Kolkata and Bangalore are on a different standing from the rest, even though Lucknow and Kozhikode have managed to elevate themselves a notch above the rest, and are just below the top 3. The rest of the IIMs are nowhere in the league of the best and brightest management schools – though the mere fact that they carry the IIM tag puts them high up in the domestic league tables.

Internationally, the mere fact that there are 13 IIMs would have automatically diluted the brand of the top three, and recent rankings show that even IIM Ahmedabad is slipping. According to the latest FT Global Top MBA Rankings, IIMA has fallen 15 ranks in 2012 to 26 from 11 in 2011.

As for the IITs, there are nowhere in the Top 200 in most rankings of science and engineering universities.

Brands always get diluted when supply increases without adequate investments in quality. Thus it makes no sense for an IIMA to share its equity with an IIM Udaipur when the two are not in the same league. If IIMA is to truly become a big global brand, it needs more autonomy, and freedom to set its own standards. This is exactly what the so-called coordinating council will prevent it from doing.

The ideal scenario is one where the IIMs with the brand equity and ability to raise resources are set free to build global excellence. At best, they can be given targets for affirmative action so that their alumni are not just people from the upper classes.

The way forward should run something like this.

One, each IIM should be free to set its own curriculum and teaching standards, faculty salaries, and student fees, subject only to the normal reservations for SC/ST, etc. Autonomy should not only be restored, but extended.

Two, expansion in the aggregate student intake should be determined by each institute itself. If the government wants say, and IIMA, to share its equity with a new one at Rajkot, the parameters for performance should be set by IIMA and not the government. Else, the IIMA brand will be chipped away steadily. Put another way, IIM Rajkot should be a subsidiary of IIMA. It should thus be IIMA-Rajkot campus, rather than IIM Rajkot.

Three, each IIM should be free to generate its own funding, from alumni or corporate, and should ultimately be free to break out of government control altogether. The government’s role should be to incubate new B-schools, not reduce them to eternal dependence.

Four, the brand of each IIM – despite the common name – is unique and the top three or four surely can fend for themselves. They have a vested interest in excellence, and any government interference can only take them towards greater mediocrity. The top three or four should be encouraged to become truly autonomous private institutions.

Five, there is no issue with the common entrance test, where the best and brightest go to the top IIMs, and the lower scorers to the remaining institutes. But an IIMA or IIMC (or any IIM, for that matter) should be free to add layers to the selection process that will allow them to chase diversity beyond CAT scores.

If the ultimate objective is excellence and not mediocrity, the government has to set the IIMs and IITs free, not try and put a noose around their necks by creating pointless councils and coordinating committees.

Every IIM should succeed or fail on its own. By trying to centralise, the government will only ensure that all of them will fail the test of excellence over time.