India's best B-schools
It’s not easy being a B-school recruiter these days, especially if you are an Indian company targeting students at the top 10 schools. Consider the range of factors that will work against you: To begin with, the students will decide when—Day Zero, One, or Two—to invite you to the campus for interviews. Even if you are lucky enough to get there on Day Zero, you’ll have the fat cat, global investment banks and consulting firms to compete against.
Then, the newly-minted MBAs will want to know just what is it that you can offer, apart from a job. Needless to say, their salary expectations will be vastly higher than what you think is fair. Finally, after you have stretched your wage bill, resolved issues of internal parity, and spent several months training the young hire, there’s no guarantee that he will stay on with you.
Part of the problem, of course, is that there aren’t enough good B-schools in the country. Sure, at last count there were more than 1,250 of them, but the universe of the really good management institutes is vastly smaller. With the result, there’s intense competition for just a handful of MBAs. What makes the situation today worse is the breakneck pace of growth in the economy.
Almost every company in every industry is expanding, creating new jobs and in new locations. Financial services, retail, telecom, IT and ITES are just some of the industries that are scrambling to recruit young managers. Yet, the intake of students at the top B-schools has only marginally increased over the years.
So, what does the fifth Business Today-Nielsen study of India’s Best B-Schools tell us about the state of affairs at the top management institutes? Before we get into that, a quick word about how BT and Nielsen conduct the survey and why it is different — more importantly, market-focussed — from other B-school surveys in the market. To begin with, the BT-Nielsen study is completely ‘market-focussed’.
That is, we poll all the ‘stakeholders’ of a B-school, comprising MBA wannabes, recruiters, young executives, current MBAs, and functional heads. Therefore, we don’t try to quantify debatable parameters such as the number of academic papers written by the B-school’s faculty or how many books it has in its library.
Instead, Nielsen’s proprietary Winning Brands model considers eight different attributes—reputation, teaching methodology, infrastructure, placement, admission eligibility, faculty, specialist units, and quality of placements—to figure out how loyal the ‘consumers’ of a B-school are and what sort of a price premium they are willing to pay to either join or hire from the B-school.
THE TOP 10 |
| 1. Indian Institute of Management, Ahmedabad |
| 2. Indian Institute of Management, Bangalore |
| 3. Indian Institute of Management, Calcutta |
| 4. Symbiosis, Pune |
| 5. Indian Institute of Management, Lucknow |
| 6. Indian Institute of Management, Indore |
| 6. JBIMS, Mumbai |
| 8. XLRI, Jamshedpur |
| 9. ICFAIm, Hyderabad |
| 10. NMIMS, Mumbai |
Coming back to the question, what’s happening to the Top 30 B-schools in the country? Who is losing and who is gaining? And what does it tell us about the underlying shifts in ‘consumer’ behaviour? First, there is absolutely no change in the Top 5.
IIM-Ahmedabad retains its numero uno position once again this year, followed by IIM-Bangalore and Calcutta, Symbiosis Institute of Business Management, and IIM-Lucknow.
However, there are plenty of changes down the rank. IIM-Indore has jumped two places to #6, and Jamnalal Bajaj one to tie with IIM-I at #6. XLRI, or Xavier Labour Relations Institute, has slipped to #8 from #6 last year. But the more surprising bit about this year’s survey is the gain that some of the so-called regional B-schools have made.
ICFAI Hyderabad, for instance, has vaulted four places to #9, Narsee Monjee Institute of Management Studies has shot up seven notches to the #10 position, while the S.P. Jain Institute of Management & Research has moved from #14 to #11. Surprisingly, some of the losers are the Faculty of Management Studies (FMS) at Delhi University, and the Indian Institute of Foreign Trade, which drop to 12 (from 8) and 16 (10), respectively.
A word of caution may be in order here. This year, a majority of the non-student stakeholders (that is, recruiters, functional heads, and young executives) the survey interviewed happened to be in Mumbai and Delhi. There’s good reason for it. Typically, the survey considers only those BT 500 companies that have annual revenues of at least Rs 500 crore. A majority of such companies are located either in Mumbai or Delhi.
Therefore, 39 per cent of the non-student respondents were from Mumbai and 22 per cent from Delhi. Could this have led to a bias in favour of Mumbai-based B-schools? To some extent, yes. But by that logic, it should not have worked against FMS and IIFT, or worked in favour of ICFAI Hyderabad. The point: recruiters and MBA wannabes are smarter than we think.
Another clue to the fact that some of the B-schools are gaining ground comes from the overall Brand Equity Scores of the top schools. Take IIM-A, for instance. While it remains the only Monopoly brand among the Top 30 B-schools, its brand equity score has been steadily declining. It was 5.06 last year, but is down to 4.82 this year. Similarly, the other top four institutes have registered a decline in their brand equity scores. Why? The answer is fairly simple. Every time a (good) Bschool gains, the better B-school loses relatively. In other words, for one institute to gain, another has to lose.
Not surprisingly, the B-schools that have gained this year, have bettered their brand equity scores. From the recruiter’s point of view, there’s something significant happening here. As campus salaries soar, recruiters are becoming more selective about who they hire and from where. In some sense, they are aiming at better fitment between the job and the candidate. Therefore, while a blue chip company may still head to an IIM-A or –B for a candidate to fill an entry-level job it considers strategic, it may happily hire from the socalled tier-II institutes for ‘operational’ roles. Not only does it have to pay less, but it also gets to hire the cream of the class, being a preferred recruiter relatively.
What should the B-schools be focussing on to move up the pecking order? Apparently, placements, quality of infrastructure, reputation, and specialisation. While MBA wannabes put placement and reputation ahead of other factors such as faculty or teaching methodology, the recruiters valued infrastructure, specialisation, and teaching methodology, which includes things like faculty-student ratio, counselling and industry exposure.
How important reputation can be is borne out by the close competition between IIM-A and IIM-B. On most parameters, the institute at Banerghatta, Bangalore, scores pretty close to IIM-A, but it loses out simply because the latter is still the more ‘storied’ Bschool and, therefore, enjoys higher awareness.
In the pages that follow, we have explored some of these issues—including the rise of regional B-schools and why foreign MBA students are making a beeline to India—in greater depth. What emerge from our study this year are a few simple things: One, that competition between B-schools is intensifying and the older institutions had better not take their positions for granted.
Two, there’s an urgent need for the better B-schools to increase their intake, and equally important for the others to pull themselves up by their bootstraps. Three, recruiters have become much more value conscious and demanding; they expect the institutes to offer more specialised courses and lay greater emphasis on pedagogy based on real-world experience. B-schools that aspire to be among the best will ignore these trends at their own peril.
