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Making global managers

S. RAMACHANDER

The MBA is the acme of middle class parental ambition and student dreams, but as a post-graduate qualification it is a peculiar case. Although cloned from Harvard, and increasingly popular, it has been so distorted and diluted in its execution as to lose nearly all the original intent. Why this is so is worth exploring.


`When few can look forward to life-long careers, some form of an executive, post-experience, MBA makes abundant sense.'



PREMIUM IMAGE: It is an assured career, at a pretty respectable wage, very early in life. PHOTO: S. RAMESH KURUP

MANAGEMENT was an important beneficiary of the post-Second World War economic boom in America, when it was imperative to create new markets, catering to the baby-boomer generation. Business needed a huge infusion of managerial ability in short order. Both study and practice of management became coveted goals in life. Much variation exists from one country to another, however, in what the Master of Business Administration (MBA) MBA signifies. Japan and Germany, the two most dramatic examples of economic resurgence in the same half-century, remained immune to the MBA. The Indian post-graduate qualification is a peculiar case. Although cloned from Harvard, and increasingly popular, it has been so distorted and diluted in its execution as to lose nearly all the original intent. Its value to society is eroded, except for a small minority of the very bright who use it as a vehicle to get top-drawer salaries. Why this is so is worth exploring, because managing skilfully is even more a survival need today.

From the 1950s

The first foreign management experts' report on the need for MBA in the late 1950s recommended that India had better give top priority to strengthening basic education instead. Prime Minister Nehru and his followers disagreed and invited Harvard and MIT to build the two Indian Institutes of Management (IIM), at Ahmedabad and Calcutta respectively. Since then, the extraordinarily scarcity-value of the qualification more than any other factor, has given the IIMs a rare premium image. They offer youth the rare gift of an assured career, at a pretty respectable wage, very early in life. Little wonder that it is the acme of middle class parental ambition and student dreams.

The IIMs started by envisaging it as a mid-career, post-experience qualification, but chose to gradually ditch this one significant element critical to the success of the MBA as originally designed. Perhaps it was in deference to the strongly held Indian prejudice that one must first finish with all education — and only then venture into the "real world". We also take a rather dim view of those working and studying at the same time later in their career — either they must have been just plain lazy in their college days or not been very academically bright. Above all, education is judged worthwhile only by the salary at the end of it. Thanks to the opportunities of a globalising economy, the young person in his early twenties today can realistically start thinking of not just Indian degrees but foreign options as well. Universities from Singapore and Australia have joined the United Kingdom to offer our students competitive options less expensive than going to the United States.

We also tend to draw a parallel with other professions. Just as a doctor or a lawyer can practise only after he has acquired a formal degree in the subject (so the argument runs) a professional manager too must need a competency stamp. There is a fundamental flaw in this argument. Management is not a specialisation in itself. One can never teach the art of managing in a class room, independent of the act of running an activity, managing a group of people. You can teach a good deal of theory, simulate decision making by cursorily looking at case material and learn about how businesses ought to be run. You can also learn about the big mistakes and heroic success stories. But as any decent scholar will tell you, such evidence is hardly generalisable into codified knowledge of any depth, which continues to be a handicap to management education. Few would pretend that an MBA stands comparison with a master's degree in basic sciences in scholarship or scientific content. There is, therefore, a serious disconnect between what passes for rigorous management research about running a business and what practical managers know from years of experience.

As a textbook subject

Management, even as a textbook subject, has very little academic foundation of its own and is not a single, unified field such as law or medicine with its own specialisations. Science in business management comprises few broad general theories. It skates on such thin ice that a little dig will reveal the multiple supports underpinning it: micro- and macro-economics, cognitive psychology, sociology, anthropology and so on. Consider for example the following: How firms allocate resources and how public finance policy affects markets and investments; how consumers chose to buy or save and how they choose what to buy; under what conditions organisations develop the right kind of culture to nurture growth and innovation and so on. The mathematical sciences provide all of the above with a set of tool kits. Thus there is enormous pressure to measure; and statistical analyses to make sense of the multiple variables that affect every outcome are part of the student's daily routine.

No wonder the fresh graduate at the age of 22, who has never seen the inside of a factory or market place, learns to think of management with great emphasis on numbers. Thanks to the widespread use of IT, the student repertoire of quantitative techniques is also continually growing in sophistication. The leading business schools become extensions of the undergraduate engineering college campuses, and recruit sometimes up to 90 per cent of the class from engineering and technology.

Another distortion results from this. The bright, young, number-happy types excel in the quantitative courses and acquire a deterministic vision of what management can do together with the jargon and terminology. In the process, the role of intuition and creativity gets short shrift. Along with an easy confidence and glib manner of the elite, they are all set to tell the world how to manage. They make natural choices for the highly paid jobs in consulting, merchant banking, fund management and other fields where their ability to analyse, conclude and recommend is rewarded; and they don't have to deliver results through a group of people.

As the smartest students go to these top salary jobs, both in India and abroad, the institutions themselves become primarily placement factories. The current MBA courses go further astray from their original objectives by the so-called specialisation stream.

But the relevance of say, an MBA (Tourism) degree in a narrow sense is questionable. It would be far better to reduce the overall social cost of acquiring an MBA degree, which is mostly funded by the parent, by reducing the duration to one year. Then, let the students serve a necessary period of say one or two years as an apprentice or trainee so that they contribute effectively on the job. This is not so far from the days when the best of the all-round students from honours courses in arts, sciences or engineering were taken on board by the reputed companies as management trainees or pupils.

The distance from the real world of business is further widened because business school teachers seldom have senior management experience. They have PhDs grounded in one of the disciplines such as economics, statistics, and accounting or operation research. With few exceptions, the average calibre of the student population in the top B schools of India would be far higher, by any objective test, than their teachers. This situation is unlikely to change unless there is a major revolution in remuneration, and incentives to research and case writing as well as consulting, to attract the calibre of talent who would otherwise flee to "green-card pastures" abroad.

Sombre though it might be to conclude on this note, there is no significant alternative for students and parents other than to boldly seek the model that many, particularly Henry Mintzberg of McGill University, Canada, have advocated for years. Says Mintzberg, "You don't get trained in the capacity for managing in an MBA programme. You think you do, but . . . a lot of people end up grabbing for techniques. Where it goes wrong is in the case-study method: give me 20 pages and an evening to think about it and I'll give you the decision tomorrow morning. It trains people to provide the most superficial response to problems... getting the data in a nice, neat, packaged form and then making decisions on that basis. It encourages managers to be disconnected from the people they are managing".

Refresh

It is time we put management education where it belongs, with managers. Real-world experience will enable managers to put practical wisdom into its theoretical foundation, and learn through unlearning and relearning. When technology is changing industry structures rapidly and few can look forward to life-long careers, some form of an executive, post-experience, MBA makes abundant sense.

Already, strong evidence, as from the Open University U.K., suggests that managers learn best when classroom material helps consolidate and reflect on work experience. Many schools in India have tried approaches, including sandwich courses, and a one-year full time model. These may shape a significant, if not the dominant, model of the future.

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