Too many B-Schools – is it a good or a bad thing?

When people see business schools in every nook and corner they start worrying about the standard and quality of management education. Academicians say that the government is not concerned about the quality of education. Even some of the state governments were not happy with the AICTE policy of allowing so many institutes to come into existence. Students feel that it becomes difficult for them to make a correct choice while taking admission to MBA and equivalent programmes. They also think that there is a strong possibility that they may be cheated under the name of AICTE recognition. Are all these fears genuine?

We must know that there is always a positive side to every issue we are dealing with. Why have so many management institutes come into existence? The most plausible reason is that people considered it to be an opportunity to make money. Therefore, the people who had no expertise to run a management institute also entered into this field. When they realized that it is not their cup of tea, they started pulling down the shutters. This phenomenon proved that the market conditions have started playing their role and it is good for any system. Over a period of time we shall see that only those institutes will continue to exist which prove to be competitive.

Some experts argue that there should be a perspective plan for education and new or additional institutes should be given the permission to set up their shops only after studying various factors which determine the need of such institutes in a particular geographical area. This argument does not hold good. Suppose, in a particular area there are four institutes and as per perspective plan this number is enough, therefore, the fifth institute need not be given the permission. But, further suppose, if the new (fifth) institute is in a position to offer a better quality education than the existing ones then are we not depriving students of getting a good quality education by not allowing the new institute to come up? In fact, a new institute would bring in more competition and the existing institutes will be forced to improve their quality. And if they fail to do so then it may force one or two old institutes to wind up their operations. This would again prove the existence of the market forces.

In 2006 - -2007, there were about 1132 MBA institutes in India. In 2012 – 2013, the number had increased to 2467, according to a report generated by AICTE. With so many institutes offering MBA courses, not only does an institute face the scarcity of quality students, but they are also unable to fill their seats! Add to this, the fact that many institutes were given permission to increase their seat count for various courses. This has resulted in the shutting down of many MBA colleges in Mumbai, Delhi and other big cities in the past year.

On the other hand, one might say that students are spoilt for choices. But the fact of the matter is that when colleges, in their attempt to fill up their seats, give admission to just about anybody slightly fitting the admission criteria, then the learning and growth of a good student also suffers. The end result being, students compelled to be satisfied with lower pay packages.

A counter argument to this could be that the increasing number of institutes has helped recruiting companies bring down their manpower cost. The reason is that now they have more options and this gives them an opportunity to scout for some good students from not so well known but good institutes.

From students’ perspective also this is not a problematic situation. They, in fact, should be happy that they have now more options to fulfill their aspirations to do MBA. What is required is that they should do a thorough research of the business schools before making their choice.

Author: Dinesh D Harsolekar, Director, IES Management College and Research Centre, Mumbai