When India became independent we embarked on a very ambitious
programme of nation building aimed at converting India into a modern
State whose economy would be second to none. In 1902 Lt. Gen. Sir
Adrian Carton de Wiart, then a young subaltern, stated on being posted
to India, “ India, from the start, held no mysterious fascination for
me. It was tawdry. It emitted revolting smells and noises”. Well,
Nehru decided that this would change, that India would build new
temples in the form of dams and power stations, business and industry,
prosperous agriculture and, to enable this to happen, we shall build
great educational institutions in the field of technology, management,
science, medicine, agriculture, social sciences and the humanities.
The Indian Institutes of Technology, the great Agriculture Universities,
the All India Institute of Medical Science, the Post Graduate
Institutes of Medical Education and Research, the Institute of Economic
Growth, Jawaharlal Nehru University, the Indian Institutes of Science
Education and Research, the Schools of Planning and Architecture and
the Indian Institutes of Management are all milestones in our journey of
quality higher education. Leading the pack was the Indian Institute of
Management, Ahmedabad.
The great business houses in India at the time of independence
were, by and large, family run businesses , with the exception of the
House of Tata, which had encouraged professionalism in corporate
management from the beginning. The Birlas, Singhanias, Mafatlals,
Sarabhais, Goenkas, Modi and other Marwari business houses, employed
managers for running individual units, but corporate decision making
even at micro level was very much a family affair, focused on the
patriarch. This worked quite well at a certain scale and in trading,
but when the pace of industrialisation gathered speed, the inherent
flaws of personalised management began to emerge. What the system cried
out for was a new model of corporate decision making and professional
management. A complex economic structure has far too many variables,
far too many interconnected dependencies which impact each other, for
decision making to be totally centralised or left dependent on the
whims of a patriarch whose own business experiences and instincts might
be anchored in a much simpler past. The genesis of IIM (A) was a
realisation by both government and business that a new model of
business management must be evolved and a new cadre of professional
managers, educated in a dedicated management institute, should be
created. From this emerged IIM (A) and the other I.Is.M that have since
been set up, thirteen in all at present in the public domain. From this
seed have grown renowned institutes in the private sector, including the
Narsee Monjee University, S.P. Jain Institute of Management, the India
School of Business and XLRI.
The Memorandum of Association (MoA) of IIM, Indore, very similar to
that of other IIsM, lays down in the following words the major
objectives of the Institute, “To provide training and conduct research
in the broad area of management and administration as relevant to the
Indian context”. The key words here are “training” , “research” and
“Indian context”. One other objective is, “To select and prepare
outstanding and talented matured young persons for careers leading to
management responsibilities”. It is on the basis of how these
objectives have been achieved that one has to judge the success or
failure of the I.Is.M. Are they fulfilling the very goals they set
themselves when they were constituted? What is the quality of the
research, if any, that they are conducting? Is their training and
research truly in the Indian context, or are the institutes only trying
to become clones of great American business schools such as Harvard,
Kellog and Stanford? Or is training some of India’s best students for
careers in business now the major objective? In other words, is
placement and a lucrative pay package the hallmark of success, or is
building new business models which could take us to new heights the
benchmark by which we should judge the I.Is.M?
Before one judges one must study the structure of the I.Is.M. All
thirteen are in the public domain and they have been created by an
executive policy decision of government. The land for each is
generously given free of charge by the State Governments of the States
in which they are located. For example, IIM Indore has been given 193
acres of prime land at Indore. The entire physical infrastructure has
been funded and built by government and any expansion on account of
government policy, for example additional enrolment to accommodate OBC
quota., is exchequer funded. This is true of even IIM Ahmedabad and IIM
Bangalore, which claim that they have enough funds to manage on their
own and want zero intervention by government even on key policy issues.
Given their way they would like to declare U.D.I (Unilateral
Declaration of Independence) a`la Ian Smith, then Premier of Southern
Rhodesia (now Zimbabwe), who thought he could prevent black majority
rule in the colony after independence by anticipating the event,
breaking away from Britain and establishing an apartheid based white
minority government and state. Fortunately Britain forcefully
intervened and aborted U.D.I, but Ian Smith’s legacy is a deep rooted
distrust of the white minority and has resulted in the distasteful
doctorial regime of Robert Mugabe. Can the country tolerate U.D.I.
by I.Is.M?
The Ahmedabad/Bangalore led cry for autonomy has certain inbuilt
defects and dangers which, in the end, may defeat the very purpose for
which they were established. An autonomy built on a high fee structure
is bound to make money a key determinant which could influence the
entire educational programme, with career overshadowing training,
research and the Indian context.
This point will be returned to a little later. At present we should
examine the question of autonomy. There are allegations that
government is inimical to autonomy. This is a complete myth. I.I.M.
Ahmedabad led the cry of autonomy in danger because Dr. Murli Manohar
Joshi, as H.R.D. Minister, wanted the I.Is. M to keep their fee
structure at modest levels. He also offered a cast iron guarantee of
government funding to meet all their needs. At least in the I.Is.T
and I.Is.M he never tried to superimpose a syllabus, much less a
saffron one and despite the delusions of megalomania of one of his
officers, V.S. Pandey, the academic freedom of these institutions
remained untouched.
The present HRD Minister, Mr. Kapil Sibal, is committed to academic
autonomy and has very readily agreed to changes in the MoA of the
I.Is.M, as drafted by them. One result is that the Boards of these
institutes have constituted themselves into the principal executive body
of the institute, to prescribe the course of studies (in I.Is.T,
I.Is.I.T and normal universities this is done by the Senate or Academic
Council of faculty and experts), to maintain discipline amongst
students, etc., The Director only enjoys delegated powers and, under
the Board, is required to ensure proper administration of the
institute. By way of contrast the Board of Governors of an Indian
Institute of Technology and the Indian Institutes of Information
Technology is “… responsible for the general superintendence, direction
and control of the affairs of the Institute…” and “… take decision on
questions of policy relating to the administration and working of the
Institute”. About the Director the provisions are “The Director shall
be the principal academic and executive officer of the Institute and
shall be responsible for the proper administration of the Institute
and for the imparting of instruction and maintenance of discipline
therein”.
The I.I.T. or I.I.I.T. Board exercises superintendence, and frames
policy, the Director administers policy, directs learning and teaching
and ensures the discipline of faculty, staff and students. The
functional division is clear and unambiguous, leading to harmony.
The I.I.M Boards feel they exercise executive functions and that the
Director is on sufferance. In I.I.M. Ahmedabad the then Chairman, Mr.
Singhania and the then Director, Dr. Bakul Dholakia were at loggerheads
because the Chairman asserted supremacy even in micro management and
this did disrupt the even tenor of the Institute. Ravi Mathai, the
first Director of I.I.M. (A) treated the Board only as an unavoidable
evil, to be marginalised as far as is possible. However, he was
uncomfortable with codification of rules, which has led to the present
position where the bounds of the powers of the Chairman and the Board
and the Director, are not clearly defined and clashes occur in the grey
areas.
In I.I.M. Indore this has resulted in the Chairman wanting to treat
the Director as a Munim who carries out every order and whim of the
owner of the firm. The power of the Chairman to nominate six members to
the Board has led to cronyism. There is not a single industrialist of
note or head of a large business house on the Board, Mr. Subhodh
Bhargava and Mr. Kishore Biyani having quit in disgust. The Institute
is now a cesspit of intrigue, with some individual Members of the
Board trying to attack the Director directly, instigating indiscipline
amongst faculty and engineering joint complaints against the Director.
Instead of crushing such insubordination and pulling up Board members
for their misconduct, the Chairman is indirectly encouraging one or two
members to step up their offensive. Governance has come to an end in
I.I.M. Indore and this will both immediately and in the future harm the
institute. We urgently need to redefine the respective roles of the
Chairman, the Board and the Director of I.Is.M, preferably in the same
manner as I.Is.T. and I.Is.I.T so that all ambiguity is removed.
Autonomy cannot be an excuse for the Chairman filling the Board with
cronies and mediocre people, marginalising the Director and taking over
micro-management of the institute in his own hands. In order to check
this government must retain a veto, or the power to issue directions
which will be binding on all the authorities of the institute if the
situation so demands.
This brings us back to the question of fees and the effect it is
having on the academic orientation of I.Is.M. For instance, I.I.M.
Ahmedabad charges rupees seventeen and a half lakh per MBA course.
Other I.Is.M also have a commensurate fee structure, but mutatis
mutandis, given the age and reputation of the institute, location, etc.
Even the most economic of the I.Is.M, e.g. I.I.M. Indore, is priced out
of the reach of even the relatively more well-to-do middle class and
is not even in the dreams of those with a lower income. The I.Is.M
argue that education loans are available and the Institutes facilitate
the process. Even if this were true do the institutes realise what it
means to an ordinary family to be burdened with a large loan? The
student is under enormous pressure to find a well placed job with a
very high salary package so that he can repay the loan. His attention,
then, is narrowly centered on increasing his employability rather than
acquiring knowledge. Certainly he has little time for research, nor
any desire for post graduate or doctoral studies. For the institute
also it is the P and PP which counts, that is placement and pay
package. Therefore, the cream of the Indian students is sucked into the
system, polished up and groomed to become a superior employable
product and ejected into the market. This is a soul destroying
exercise, kills all research initiative, makes faculty into a shop floor
worker who churns out a saleable product rather than a human being
with knowledge and provides ample time for intrigue against the
Director. Because the fee structure of I.Is.T and I.Is.I.T. is
relatively modest the imperative to acquire a job immediately after
graduation is not as pronounced as in I.Is.M and there is a better
research environment and orientation. Those who are required to train
the persons who will manage business must ponder over the points raisd
above because it is not simply a management question but is also a
serious existential question.
The reality of the Indian economy is that the informal sector
employs about eighty-five percent of the entire workforce, the
organised sector employs about ten percent and the balance is
marginalised or unemployed. With GDP growth of about eight percent,
employment is growing at, or is stagnant at, 0.3 percent. Where is the
extra money going? Certainly not into job creation. The informal sector
has the largest share of employment, but it has low per capita
productivity, low wages and inefficiency in production, capital
investment, design and marketing. The organised sector has a better
capital- output ratio but its employment potential is low. Can we not
change the equations and synergise and coordinate the formal and
informal sectors so that the productivity of the informal sector and the
employment potential of the formal sector both dramatically improve?
Can our I.Is.M not take up a major research programme and develop a
new paradigm management, working capital, design for production
efficiency as also organisation of both production and marketing of
the informal sector? The American business schools cannot do this, but
our I.Is.M, which are mandated to work in “the Indian context”, can
and must do this. If they are unwilling or unable to do this because
their P and PP model will suffer, then government must invoke clause
(6) of the MoA and take over the administration and assets of the
Institute. About this there should be no hesitation because the
reverse of the coin of autonomy is accountability and failure to
discharge it must carry consequences.
One last point. Legally the I. Is. M cannot award a degree because
they do not have an university status. They are, therefore, forced to
admit persons who have graduated from an institution which has
university status, say I.I.T. Kanpur or ABV- I. I. I.T.M Gwalior, for a
post graduate diploma in management. In order to catch them young
I.I.M Indore has started a five years integrated course, as is the case
with I.I.S.E.R and ABV- I. I. I.T.M, which give a dual degree after
five years, B.Sc – M.Sc. in the case of an I.I.S.E.R and B.Tech. M.Tech,
or B.Tech-MBA in the case of ABV- I. I. I.T.M, whose Senate has
approved a third stream of B.Tech-M. Humanities, the details of which
are being worked out. But because an I.I.M. cannot award a degree and
no post graduate diploma or degree can be awarded without a basic
Bachelor’s degree, the Indore Institute is in a fix. The simple
solution to this is for the I.Is.M. to seek legal cover which would
make I.Is.M institutions of national importance and give them statutory
university status. It seems I.Is.M, especially Ahmedabad and
Bangalore, oppose this because they say it will reduce their autonomy,
but in reality because they fear it will increase their
accountability. The I.Is.T. and I.Is.I.T have not had their autonomy
jeopardised by legal cover. One can draft a Bill to provide adequate
safeguards for autonomy. It is about time M.H.R.D stopped pussyfooting
around and goes ahead with legislation. The I.Is.M will have to fall in
line because they will have no option. The Bill can have a separate
chapter on regulation of non I.I.M management institutions also.
Government must nurture the I.Is.M., give them autonomy short of
U.D.I, but it must not pamper them to the point of their becoming
spoilt brats. The taxpayers who helped build the Institutes and the
citizens on whose support they prosper demand this as the least that
government can do to remind the I.Is.M of the Indian context. Even
otherwise the business schools the I.Is.M try and emulate – Harvard,
Stanford, Kellog – are all part of an university system, operationally
and academically free, but as part of a larger whole. In India they
would stand alone, have operational and academic freedom and in
themselves be the larger whole, because their universe would be the
Institute itself. They could then have their cake and eat it too.
Published Date : 15th March, 2012
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