Conversion of B-schools into Businesses

Business Schools were set up in late 19^th century as vocational trade schools. The studies of the Ford Foundation and Carnegie foundation had provided 64% of all grants to US universities both for new initiatives and for existing institutions and thus their money has had tremendous influence over the direction of education.

After the Second World War, both the Carnegie and Ford Foundations felt that business schools needed to professionalise and grow beyond their origins. Importantly, in the midst of the Cold War poor-quality business education was seen to threaten the health of the economy, democracy and the American way of life. The studies of the Ford Foundation and Carnegie foundation of 1959 led to their transformation from practical institutions into academic behemoths.

Schools were to professionalise, with faculty holding doctorates and producing graduate-level academic publications; students were to be taught quantitative methods and behavioural sciences – and only those academically qualified were to be admitted. Business schools all over the world started reinventing themselves to comply with such new expectations and the strings attached by the donors. And, while not obviously stated but clearly understood, schools were to have an anticommunist, pro-business and clearly capitalist orientation. This is the b-school model that India emulated.

The “storm” of rankings changed everything. In simple terms and for better or worse, the advent of rankings in 1987 marked the dawn of the era of business schools as businesses with the rules of the game laid down by the Foundation Studies. The U.S. News & World Report published a reputation survey of b-schools. Business Week published the first full business school assessment in 1998. Today there are other rankings provided by - Bloomberg BusinessWeek; Forbes, Financial Times, the Economist, and the Wall Street Journal.

India would not lag behind and there are now a plethora of rankings including those by Business-Today, Business India, Business World, ET, Business Standard, AIMA, MBAUniverse, Outlook, Careers360, and so on. Few people may remember what it was like before the rankings. It was a time when business schools could actually focus on improving the quality of their schools’ educational offerings. Discussions about strategic marketing were confined mostly to the marketing curriculum. PR firms were hired by businesses, not business schools. Most business schools had sufficient facilities, but few buildings had marble floors, soaring atriums, or plush carpeting. IIMs were affordable for most students, and even top MBA programs were accessible to students with high potential but low CAT/MAT scores.

What they teach and how they teach has lost focus for the leadership at b-schools. Instead, they are chasing the new indicators of quality and success for b-schools as being determined by the rankings - 

1. applicant rejection rates (how difficult is it to get admission), 
2. placements (how quickly, how early, how many aspiring recruiters, number of job offers per available student and at what emoluments), 
3. rankings (playing upon the better ones out of so many available and suppressing the inferior ones as biased), 
4. Infrastructure (marble floorings, air-conditioning, cafeteria, LCD projectors, books in the library, 
5. Advisory councils (reflecting affiliations rather than the capability of the constituent members) 
6. faculty (their credentials rather than ability and availability to teach).

B-schools are now businesses with business-to-customer marketing practices in chasing students and business-to-business marketing in chasing potential recruiters. Executive education and consulting was always about business-to-business marketing.

B-schools are on the path of evolving into trading exchanges for the managerial-talent.

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