Archive for the ‘Governance of IIMs’ Category
B-schools need to focus on under-managed sectors
As India plans to open up the higher education sector through a proposed legislation, the Indian Institutes of Management (IIMs) are seeking more autonomy from the government and plan to market their brand globally and admit foreign students. M. Damodaran, a former chief of markets’ regulator Securities and Exchange Board of India (SEBI) and current Chairman of IIM-Tiruchirappalli (Trichy), says business schools need to focus on under-managed areas to be a part of nation-building. Edited excerpts from an interview:
Do you think the government is serious about autonomy for the IIMs or is it more of a bureaucratic exercise?
My understanding is that if you want to exercise power legitimately in public interest, I don’t think anyone has a shortage of powers. It is a question of how do you identify those powers that you need to exercise in a manner that is of public interest. Because, that is the justification ultimately of the power. I think today it won’t be unfair to say that you don’t have power. I think powers exists. All of us who have powers want more power, but we still need to ask ourselves: are we exercising the powers we already have. And this is just not confined to only the IIMs, but across the table.
There are certain things that laws, rules and regulation tell you what you can do. Some tell you specifically what you cannot do, and there is an area in between where it is silent. You should not see (this) as forbidden territory. Because what the laws, etc., not either expressly or by necessary implication proscribe, you must see that as your legitimate… If you look at it that way, then you will see that there is a lot of empowerment. It is a question of how quickly you exercise those powers.
How relevant is the current management education provided by the IIMs for the country?
We have deliberated on whether the management education provided today is relevant to the India growth story. If management education is aimed at producing only investment bankers for foreign companies or management personnel for multinationals, and not looking at under-managed sectors like health, education, physical infrastructure or agriculture. They need management as much as the areas of finance or marketing. To what extent is the IIM bunch contributing towards this (under-managed sector)—as of today, hardly anything. So we have to look at those under-managed sectors. We have to see how thousands of management institutes with the IIMs in the forefront address some of those.
What are the challenges?
We have more institutes (IIMs) now; secondly, some thought is being given to improving the quality of the faculty and incentivizing them for producing better results. (The process of) selecting good students is in place. In terms of empowerment of faculty and people who run the institutes, I don’t think anyone can complain. There is complete functional autonomy. It’s not like independence. You don’t fly a flag and say you are independent.
But to the extent you need powers to run a good institute, they are all in place. The new IIMs will take some time because there is an issue of branding. They don’t have a brand like the IIMs at Ahmedabad, Bangalore or Calcutta. So, getting faculty to the new IIMs is a bit of challenge, but it’s not insurmountable. What is going to improve management education are three, four things—good students; good, committed faculty; and (a management) that sees itself as a part of transformation to take people with hardly any experience, and moulding them into good managers.
To become global brands, the IIMs are talking about marketing themselves worldwide in the face of foreign institutes showing an interest in India. Your view?
I think the IITs (Indian Institutes of Technology) and IIMs are two Indian brands already known. Within India, there is a huge demand for management education. The IIMs are not positioned to fulfil those numbers today. That’s why new IIMs are being set up. Institutions from outside are recognizing that there are a whole lot of Indian students seeking admission outside… They say why not move to India. There is a space for everybody and will lead to competition, better quality and, of course, more choice for students.
This is something we need to welcome. It will ensure that our IIMs do better than what they are doing right now. Just that these people are coming does not mean they are superior. Maybe their brand story is better known, maybe the foreign tag appeals to some Indian students. As we manage to market our brand better globally, and as newer IIMs establish them, there is no reason to feel threatened by anyone.
But a faculty crunch is hampering their growth and the quality of education.
We recognize that a good faculty is always a constraint because you are looking for top-class faculty for a larger number of institutions. When you are doing that, you discover that it is not available. Of course, there are issues that industry pays much more than academic institutions. A lot of people don’t see teaching as their lifetime occupation and you have all those issues. Yet there are a bunch of new youngsters who think they can bring new things to the table.
What we are looking at is how quickly you can make new IIMs institutions of great learning. If you wait for everyone to have their own faculty and have their own processes, then it will take longer. One of the ways to do that is to pool resources (among the IIMs). But you will not see them function as mirror images of each other. They have to cooperate to become stronger, yet remain competitors. They will compete for better students and better faculties.
There were talks about a joint interview among the 13 IIMs for selecting students. Why was that abandoned?
What the ministry wanted was that students seeking admission go from one town to another for interviews. You don’t know in a competitive situation whether you will get selected. Let’s recognize the travel time and money. Now, what has been talked about is can we ensure not that you do it jointly, but do it in a manner so that students don’t face much problems. Do interviews on subsequent days (in the same city) so that students don’t have to travel from town to town.
Source: Mint, November 7, 2011
IIMs to hold roadshows abroad to attract foreign students
In an effort to make the Indian Institutes of Management (IIMs) global brands, the central government on Wednesday allowed the premier Indian business schools to showcase their academic prowess globally to attract foreign students, especially from Europe and the US.
The decision was taken after a meeting of the Union human resource development minister Kapil Sibal with the directors of all the 13 IIMs in the capital. “Next year, we will go abroad to conduct a roadshow and open to take around 10% of students from foreign countries to make our classroom look heterogeneous,” said Debashis Chatterjee, Director of IIM-Kozhikode. “We (IIMs) are great schools and on a par with any other institute. The effort is to improve our global visibility.”
Currently, IIMs admit around 3,300 students in their postgraduate programmes every year. The foreign students intake will be over and above this number. “In order to build diversity on campus and attract international students without affecting the national intake,” the IIMs were allowed jointly to organised the international show “pooling their resources for the purpose,”according to Sibal.
The government also decided to review the performance of IIMs every three years in an attempt to streamline their functioning. Then, IIMs will also be required to broaden their focus and conduct programmes and cutting edge research on issues of national relevance, in addition to giving talent to the Indian industry. A task force will be constituted to suggest ways to execute this vision.
“In order to expand the search for management solution in problems relevant to the nation and society, it was felt that IIMs have to take the lead in conducting programmes and organize curricula in areas such as energy management, academic institutions management, health management, agriculture management etc.,” Sibal said. The IIMs are now ready to hold courses to provide solutions to national issues, said B.S. Sahay, Director of IIM-Raipur.
While IIMs will not get complete independence, both Ministry of Human Resource Development (MHRD) officials and the IIM authorities said that the government is increasingly stepping out of administrative matters and encouraging the B-schools to manage their affairs. Meanwhile, the central government said that it will give Rs. 95 crore (Rs. 950 million) annually to the IIMs to bolster their research capability. “We are giving this, asking them to produce at least 100 more PhDs put together every year.” While the seven older IIMs produce less than this number every year, the six new IIMs are yet to start their doctoral programmes. It was unanimously decided by the IIMs to share faculty, improve research output and bring out a journal of their own, on the lines of leading business schools in the West, Sibal said.
“I believe the government is doing a lot and is genuinely interested in the betterment of these B-schools,” said M. Damodaran, Chairman of IIM-Trichy and the former chairman of the market regulator, Securities and Exchange Broad. “What I think is that the research atmosphere needs to change in these schools. Faculty is an issue but we have agreed on sharing faculty and hiring them by giving incentives.”
The IIMs are not seeking complete independence, nor is the government involved in a bureaucratic exercise to control these institutions, said Damodaran, who will also head a panel to lay out the roadmap for the new IIMs. However, the proposal to have a common interview to select students for all IIMs was rejected as admission to every institute is “sacrosanct”.
Source: Mint, November 3, 2011
IIMs’ external review to be done every 3 years
The IIMs’ demand for greater autonomy will not be a free ride. Given the public investment in the business schools, the government will retain its oversight role and will step in when there are aberrations. However, the institutes will have greater administrative freedom, in addition to the existing academic autonomy it enjoys.
This was decided at the meeting of the IIM Council chaired by Human Resource Development Minister Kapil Sibal. The new memorandum of agreement, which will invest greater autonomy to IIMs, is in the process of being finalised. The revised Memoranda of Association and Rules of Ahmedabad and Indore have been finalised. The process is on for IIM Bangalore, Lucknow and Kozhikode.
“Since more autonomy is given to IIMs, the question arised where should the ownership reside? So it is agreed that even as the IIMs have independence in academic and other areas, the government should have ultimate power to intervene so that we can take corrective measure as and when required. Also the audit will be the best way for accountability, help us understand what is going wrong, what is the quality of education, output, whether they meet the national requirements etc,” Sibal said.
The IIMs have also agreed that there is a need to move away from conventional management programmes. The heads of the IIMs agreed that areas such as health, environment, are sectors which require attention. The successive governments have attempted to steer the IIMs towards providing trained personnel to areas of national priorities, however efforts have remained unsuccessful.
As a first step, it has been agreed that an expert group will be set up to work out the priority areas. The IIMs continue to drag their feets on centralised interviews and group discussions for admissions. The three older IIMs – Ahmedabad, Bangalore and Kolkata – have now agreed to conduct interviews in one city to facilitate the students. Their interviews will be stretched over two days.
Source: The Economic Times, November 3, 2011
IIMs to meet Sibal, seek more autonomy, admission reform
Seeking more autonomy in financial and administrative matters, the chairpersons and directors of the 13 Indian Institutes of Management (IIMs) will meet human resource development (HRD) minister Kapil Sibal on Wednesday. Issues such as standardizing the admission process and improving research output will also be on the table during the meeting, which will take place in the wake of a report on reforming the IIMs submitted by a panel led by Maruti Suzuki India Ltd. Chairman R.C. Bhargava.
“The autonomy issue will be a major discussion area,” a ministry spokesperson said. “Mr. Bhargava is expected to give a presentation on the issue.” The report, submitted in October 2010, says leading business schools need to hire directors with experience of working abroad, alter their designation and profile, restructure the board of governors, and source funds from corporate houses in return for certain incentives.
Directors should be given more administrative and financial powers, like the heads of corporations, and their designation should be changed to president-cum-dean, says the report. “Not only would this be in line with the designations prevailing in leading business schools, but would enable the organizational structure to have vice-presidents and vice-deans,” it says.The Bhargava committee noted that global business schools are showing interest in setting up shop in India. “Private investment in management schools is growing rapidly, and the ministry of HRD is keen on attracting foreign direct investment in education, which could include joint ventures. This will pose new challenges to the IIMs,” the report states, Mint had reported in October 2010.
Narayanan Ramaswamy, executive director for education practice at consulting and auditing firm KPMG, said autonomy for leading business schools is the need of the hour. The government should not interfere in their administrative matters as the IIMs themselves teach administration and management to the corporate world, he said. The meeting will also discuss a proposal to hold common counselling, group discussion and personal interviews of admission seekers after the Common Admission Test (CAT).
Six recently opened IIMs — in Ranchi (Jharkhand), Rohtak (Haryana), Raipur (Chhattisgarh), Trichy (Tamil Nadu), Kashipur (Uttarakhand) and Udaipur (Rajasthan) — have already decided to do this to reduce hassles for students. But the seven older IIMs — at Ahmedabad, Bangalore, Kolkata, Indore, Lucknow, Kozhikode and Shillong — hold independent sessions.
“The new IIMs have agreed for the common process,” said P. Rameshan, Director of IIM, Rohtak. “Let’s see what the meeting decides. The older IIMs are established brand names and it will benefit us if they too join us.” Himanshu Rai, a professor at IIM, Lucknow, and the convener of last year’s CAT, said students prefer giving separate interviews to enhance their chances of admission. “If they do badly in one interview, they still have a chance in the next,” he said. “I have not come across a single candidate who is ready to endorse the idea.”
The Ministry of Human Resource Development (MHRD) is in favour of a common interview to obviate the need for students to run from one IIM to another, a ministry official said on condition of anonymity. One proposal to make the system more uniform is to have a representative from each of the 13 IIMs on a common interview panel, where they can select students of their choice. Nearly 206,000 students are vying for about 3,300 seats at the 13 IIMs this year.
Source: Mint, November 2, 2011
MHRD plans Rs. 950 million grant for five IIMs as global ranking trails
The failure of any Indian business school in making it to the world’s top 100 management institutions has jolted the government into action. For starters, the Ministry of Human Resource Development (MHRD) has decided to pump Rs. 95 crore (Rs. 950 million) into the Indian Institutes of Management (IIMs) to increase their research output five-fold.
IIMs in Ahmedabad, Bangalore, Kozhikode, Indore and Lucknow will receive the grant across the next five years. Most of these IIMs produce an average of 15-20 fellows every year. “We want a five-fold increase in the number of fellowships in the next five years and this funding will be used for that purpose. This is for the old IIMs, as the new ones already get a grant from us,” said an MHRD official.
The ministry had stopped such grants almost a decade back as the IIMs were able to sustain themselves. Doing a four-year PhD costs around Rs. 2 million, as per the ministry’s estimates. “The money they were raising from their MBA programmes could not be used for research and hence, this grant is being given for students to do research. The IIMs are able to meet their regular expenses from the MBA fee but for fellowships, we have to step in,” the official added.
The IIMs who have always been sensitive regarding their autonomy, say that government funding their research is not a threat to independence. The government now incurs most of the capital costs incurred by the IIMs and the review committee setup under RC Bhargava had noted: “It must be noted that IIMs account for less than 5% of MBAs produced in India and that this percentage will not change appreciably even after the expansion plans of current IIMs are completed. Clearly, if IIMs have to continue receiving public funds, they need to contribute to improving the quality of management education in India, and themselves become centres of excellence and thought leadership.”
“We have all the freedom and this is not a threat to our autonomy. In fact, this funding is very beneficial as our doctoral students and the fellows we produce go to other institutes to do research,” said Shekhar Chaudhuri, Director, IIM-Calcutta. He added that the new scheme will enable it to double the intake of fellows to 18-20 in the next three years.
Most of the old IIMs conduct a Fellow Programme in Management (FPM) and the output is 15-20 fellows per year. IIM-C’s fellow programme has two phases – a two-year phase is followed by a two-to-three year dissertation phase in which a student writes his doctoral dissertation. The institute provides support to fellowship students in the form of financial aid and research infrastructure.
At IIM Ahmedabad, course work in the first year provides a general management overview and develops basic skills for analysing managerial problems. In the second year, students take advanced doctoral level courses in their areas of specialisation. The doctoral dissertation, for the next couple of years, provides them with an opportunity to make original contribution to an area of management or to one of its source disciplines. At IIM Lucknow, whose FPM began in 2001, all FPM students are provided with a monthly stipend of Rs. 20,000 during the first two years and Rs. 24,000 plus some financial incentives depending on their involvement in academic duties such as teaching and grading during the third and fourth years.
Source: The Financial Express, October 13, 2011
3 more IIMs set to get autonomy
After the Indian Institute of Management, Ahmedabad (IIM-A), three others have succeeded in getting autonomy for themselves. Their memoranda of association (MoAs) have been approved by the Ministry of Human Resource Development (MHRD) and sent to the Law Ministry for opinion, after which they will be ratified and the institutes notified. Now only IIMs in Kolkata and Lucknow remain to get autonomy. “We are discussing it with our faculty and other members of the society,” said an official from IIM-Calcutta.
As per the new amendments in the MoA in case of the four IIMs — Ahmedabad, Indore, Bangalore and Kozhikode — these can set up overseas campuses as they are now allowed to buy and sell property. But in doing so, they can’t use public funds or the money they raise by selling membership of the societies, according to MHRD sources.
The MoA with the government with the amendments allowing them to select their own directors and allowing corporate houses to be part of the society membership for a sponsorship cost are nothing new. The autonomy to shortlist own director existed until 2001. When Murli Manohar Joshi took over the MHRD in 2002, he said the directors would be appointed by the government. Currently, a search-cum-selection committee set up by the government selects the directors. The amended MoA reduces the role of the government.
Among the various amendments allowing for greater autonomy, one says in case a legislation allows institutes to award degrees in the future, IIMs won’t have to ask for another amendment. The last time amendments were made to the MoAs was more than a decade ago.
Source: The Indian Express, July 20, 2011
Autonomy to IIM-A at variance with NCHER norms: Experts
HRD minister Kapil Sibal’s latest attempt to empower the Indian Institute of Management-Ahmedabad (IIM-A) is at complete variance with the legislation for the formation of a National Commission for Higher Education and Research (NCHER) that is currently pending clearance, say observers. Sibal has approved long-pending amendments to the institute’s memorandum of association (MOA) with the government, allowing IIM-A to choose its own director and raise resources.
Moreover, though the MHRD has been actively involved in the process of selecting directors for IIM-A over the past two rounds, first in the case of Bakul Dholakia and then in the case of current incumbent Sameer Barua, it is the IIM-A board that has been the nodal body for selection of a director ever since the inception of the institute. Interestingly, though the government had increasingly been taking an interest in the selection of directors for the institute, the original MOA had not been tinkered with. In the case of the selection of the present director, the MHRD had even advertised the post in leading national dailies, leading to consternation in some quarters over the “complete infringement of the institute’s autonomy”.
“As far as the selection procedure is concerned, the amendments to the MOA do not change anything on the ground materially,” said a senior IIM-A faculty member.” As usual, it was the chairman of the IIM-A board who was sending a list of three names in order of preference and the government was granting its approval in accordance with this.” With the latest amendment to the MOA, however, the informal scope the government had of influencing the choice of director is likely to go completely. “If this is done, then it will be in complete variance with the role envisaged of the NCHER, which is supposed to prepare a panel of names for future appointments to all premier institutes of higher education through a collegium of academicians of distinction,” the faculty member said.
Another move of the MHRD that is not going down well is its nod to the amendment for granting the IIM-A financial autonomy as well including the selling of seats on the IIM-A board to the highest bidding corporate donor too is not being viewed favourably by insiders at IIM-A. A faculty member observed that the move to auction seats would actually be tantamount to backdoor privatisation of the institute over a period of time. “That’s because the board is accountable to the IIM-A Society. Thus far, it was the government which was monitoring the institute’s finances while the Society had been comatose. If the board now becomes answerable only to the Society as envisaged in the amended MOA, it would, over a period, lead to an increase in control of corporates,” he said.
Source: The Financial Express, July 19, 2011
IIM-Ahmedabad wrests autonomy from Centre
The Indian Institute of Management-Ahmedabad (IIM-A) has won a decade-long battle for autonomy, with HRD minister Kapil Sibal approving dramatic amendments to the institution’s memorandum of association (MOA) with the government. The amendments that end the government’s powers to handpick the director of the country’s top business school and give it unprecedented financial autonomy follow a decade-long battle between the institute and successive governments.
Directors are at present short-listed by a search-cum-selection committee set up by the government in coordination with the IIM’s board of governors. This gives the government the opportunity to influence the selection of the candidates. The amended MOA, which has now been sent to the Ministry of Law for vetting before a notification is released, completely eliminates the government’s role in short-listing candidates for the director’s post. From now on, the board will shortlist three candidates, while the government can only pick one from those names.
The amendment will also allow the IIM to purchase and sell assets without seeking the government’s approval. This will cut through layers of red-tape that delay key acquisitions and investments planned by the IIM. The Ministry of Human Resource Development (MHRD) has also given its nod to a proposal to increase the revenue generated for the IIM through membership of its sponsoring society. The IIM can now charge hefty donations in exchange for membership of the society.
This proposal earlier raised concern that some people might enjoy influence over the board of governors simply by buying society membership. Sibal had advised the IIM to put the proposal on hold. But the IIM later convinced the government that only two nominees of the society are members of the board, and industrialists or individuals who join the society won’t be in a position to influence key decisions.
Source: Hindustan Times, July 17, 2011
IIM-A Professor Questions Autonomy Need, Reignites Issue
Just when the IIMs’ relentless pleas for autonomy are finding favour in the power corridors, an insider view rekindles the decade-long debate. A senior professor at Indian Institute of Management-Ahmedabad (IIM-A) has questioned the need for autonomy, described as functional independence by academicians, in a book that argues government role is necessary for better accountability.
Finance professor T.T. Ram Mohan says IIMs (Indian Institutes of Management) run the risk of turning into “teaching shops” without government funds and monitoring. “It is often asked why the government cannot exit the boards of IIMs and leave things entirely to eminent professionals as it happens in the corporate world…. Any government withdrawal would create a dangerous governance vacuum with adverse implications for the very character of the IIMs,” Ram Mohan says in his soon to be published book “Brick by Red Brick”.
The arguments against autonomy are restricted to one chapter and Ram Mohan says he had expressed his views earlier as well. The book largely delves on the colourful persona and the contributions of Ravi Mathai, the first full-time Director of IIM-A, and says there has been a devaluation in the Mathai model at the institute. The book is critical of the waning faculty governance at IIM-A, powerless boards and faculty councils.
The IIMs known for attracting country’s top talent that aspires for millions-plus salaries on passing out have been lobbying hard for autonomy since a decade. The institutes argued autonomy would help them pay better salaries, attract foreign faculties and assist in setting up overseas campuses. The IIM-A was at loggerheads with the Ministry of Human Resource Development (MHRD) headed by Murli Manohar Joshi in the early part of 2000 and its then Director Bakul Dholakia put up a sustained fight against what he claimed was government interference.
During his tenure, he had several run-ins with the ministry and said in one of his media interviews: “… for institutes of higher education to excel globally, withstand the pressures of global competition, they require ideological, financial and operational autonomy”. Dholakia who now heads a private B-school did not comment on the book. The present IIM-A Director Samir Barua too has been insistent on autonomy and said in his convocation address that the institute must be free of all government controls to compete with foreign B-schools that have now been permitted entry into India.
There is a change in the ministry’s approach over the years and human resources minister Kapil Sibal has favoured more autonomy to the IIMs. Ram Mohan counters these arguments in the book. “The contention that there is a government devil out there that has smothered autonomy and that, absent this devil, IIM-A would have become truly world class, lacks substance. Over the first four decades, starting from the days of Sarabhai (founder Vikram Sarabhai) and Matthai, no director at IIM-A had any serious complaint about lack of autonomy …. The clamour for autonomy in recent years must be seen for what it is: a thinly-disguised attempt to escape the checks and balances inherent in the government system and enter a lawless paradise made possible by a dysfunctional and ineffectual board,” he adds.
Talks of autonomy within IIM-A began only eight years ago when the institute stopped accepting government grants. Ram Mohan believes to avoid government aid, IIM-A has been heavily relying on in-company training conducted by its faculty for the corporate world. This activity has been helping the institute generate a significant portion its annual revenue. It thus sees such revenues as crucial to its autonomy… Institutions that rely entirely on internally generated revenues end up as teaching shops,” he says.
“Trying to cover costs mainly through revenue-generating programmes is the road to perdition,” he says suggesting institutes should look at philanthropy and private funds to meet their requirements. The government has made “colossal investments” for more than four decades and merely not accepting funds from the government does not take the institute outside the purview of the government. An IIM-A alumni Chetan Bhagat says, “Not just the IIMs, the government in general should encourage autonomy in educational institutes…”.
Source: The Economic Times, May 16, 2011
>It’s time IIMs give degree, not diploma: Menon Committee
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Apart from enviable pay packets, future managers will pass out from the iconic Indian Institutes of Management (IIMs) with degrees instead of diplomas, if a Ministry of Human Resources Development (MHRD)-appointed panel has its way.
The six-member panel, headed by Professor N.R. Madhava Menon, has recommended bringing in an overarching legislation governing all 13 IIMs, allowing them to award degrees without “any erosion of their existing autonomy”. Unlike central universities and Indian Institutes of Technology (IITs), the top B-schools currently award only diplomas.
“IIMs have not been set up through an Act of Parliament, but through the charitable societies route. When you are talking of increasing global diversity, diploma creates a confusion. When you have a whole global environment that is attracted to India, I feel a little more explaining has to be done with regard to a diploma or degree. I feel that allowing IIMs to award degrees is more of a hygiene factor,” IIM-Bangalore Director Pankaj Chandra, who is part of the Centre’s autonomy panel, told Sunday Times of India.
The recommendation comes months after the MHRD rejected IIM-B’s proposal to amend its Memorandum of Association — its primary rulebook — allowing it to confer degrees. The draft proposal was not acceptable to the ministry as it asked: “It is not understood how IIM-B can award a degree.” The proposal is yet to be vetted by the MHRD.
The committee appointed to evolve a comprehensive policy of autonomy for higher education institutions, including IIMs and IITs, has also proposed a peer-based academic review of departments/areas once every five years and complete autonomy to boards to appoint IIM directors solely via a search and selection committee.
The Menon Committee has recommended flow of liberal grants to both new and old IIMs to enhance their level of academic activities to global standards, funding of doctoral students and to enhance their competitivenes.
The panel has proposed setting up three new wings in every central educational institution — an office of research and integrity that’ll fund advanced research and maintain standards; an office of ombudsman to intervene in crisis situations and an Equal Opportunities Cell to ensure inclusiveness.
Source: The Times of India, May 1, 2011
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