IIM Bill Impacts the Non-IIMs More

Universities and educational institutions including Business Schools are basically classified as public and private.

A good test of ownership is by examining the public versus private nature of the institution, body, or a group to whom the educational institution would look up to as a matter of first recourse when facing any existential crisis.

Under the law, in case of tertiary education, degrees, be it Bachelor's, Master's or Doctoral, can be granted only by the Universities and those Institutions that have been declared as Institutions of National Importance by the Ministry of Human Resources Development. No other institution can grant degrees and normally therefore, diplomas are awarded by other institutions in the sector.

Such degree granting status is available to 45 Central Universities, 370 state universities, 74 Institutions of National Importance, 122 Deemed-to-be Universities, and 282 Private Universities (Information as of March 2017 – more updated information available at www.ugc.ac.in). IITs grant degrees being covered under the category of Institutions of National Importance.

Interestingly, IIMs so far have no degree-granting status. They have, since inception therefore granted a Postgraduate Diploma in Management (PGDM) which has been considered as equivalent to a MBA degree. IIM Bill, which the Government has come up, will modify the status of IIMs to degree-granting institutions by including them under the category of Institutions of National Importance.

Thus, India has a complex mix of Business Schools operating at Masters Level. 

The diploma granting Business Schools have been successful in acquiring acceptance for their certification as diploma on the borrowed acceptance from the nomenclature used by the IIMs. Erroneously, in the market space, quite a few PGDM holders declare their qualifications as MBA even when they have earned it from an IIM. Indian society seems to be tolerant to such misrepresentation may be because of ease in comprehension.

IIM Bill is aiming at some structural changes to governance, something that has an internal impact on IIMs. The major change with external manifestation is that instead of the PGDM, IIMs would hence forth be awarding MBA degrees.

Older IIMs had initially opposed the proposal to replace their PGDM by MBA on the premise that their PGDM had over the years acquired a higher value in credibility and acceptance, which they did not wish to lose, but the younger IIMs liked the idea as they had a long struggle ahead in acquiring credibility for their PGDM in a market-space where some of the non-IIM, PGDM granting institutions had established dominance in credibility.

The change that IIM Bill brings in will impact the non-IIM institutions more than the IIMs and will bring in enormous pressure on the PGDM awarding institutions to protect the acceptance of PGDM in the market or switch to awarding MBA degree. Neither of these are easy recourses.

Protecting the acceptance of PGDM would require these institutions to collectively engage in a mega communications programme directed towards all stakeholders – the challenge of funding and leading such a collective notwithstanding. Individual PGDM institution would need to create strong differentiation from the MBA including those from the IIMs through innovations and signal international acceptance through seeking global accreditation and rankings. 

IIM Bill affects the Business schools in two fundamental ways:

Impact on the Access to-

• Acceptance of Certification
• Quality Leadership
• Quality teachers
• Quality students

Pressures from Stakeholders to-

• Innovate
• Seek Global Accreditation
• Seek Affiliations
• Seek Degree Granting Status

Business schools in India are headed for, whether by choice or by default, proactively or reactively, major Structural, Strategic and Systemic changes due to the IIM Bill/Act. Schools failing to embrace these changes may morph into something else or simply perish.

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