Unravelling the Indian MBA


In the late 19th and early 20th century, the purpose of MBA centred on liberal and moral education for business managers to enhance their status in public and private life. At the forefront of this world wide success of an MBA degree have been four countries – France, Germany, the UK and the USA. These countries had a simple and a single minded proposition for their MBA degrees – educate managers in the practical aspects of Management.

The proposition needs itemisation –

  • MBA was a programme of education
  • focussing on practical aspects of Management
  • for people in managerial positions

So, an MBA was NOT

  • a training programme or a skills development programme
  • a programme engaging in theoretical facets or research aspects
  • for college going kids or for people in non-managerial positions

So, how was an MBA different from other Masters Programme–

  • not expected to lead to any Mastery of a discipline
  • not aimed at theorising and theory building
  • not aimed at producing teachers and researchers for the field of Management

A new model of an MBA emerged in the US by late 1950s to counter the allegations of lack of research and legitimacy of business education. This model emphasised on discipline-led scholarship, analytical methods and scientific rigour.

Emergence of an Indian MBA

The Indian MBA began some 60 years back as a poor replica of the US model that was beginning to dominate the world at that time. The Indian MBA emerged as a programme of higher education for college leaving people with bachelor’s degrees – without any prior education or experience in Management.

Directed towards liberal and free business in an era of command and control economy, the Indian MBA was quite successful at the following levels –

  • Acquiring legitimacy due to Governmental patronage
  • Being affordable due to public funding
  • Attractive to best talent pool

The Supply of Indian MBA remained limited and because the quality of the student admitted was high, the quality of the MBA programme itself was of no consequence.

Stabilising of the Indian MBA

The early 80s had only 50 odd programmes producing around 2000 MBAs a year. Over the next 10-15 years, MBA degree became high on aspiration, and the delivery of the programme also improved due to availability of home grown academics with global mindset. Indian MBA came of age because –

  • It was still a limited supply with improvements in teaching and learning processes
  • Increased mobility of MBAs with changes in demography
  • Diversification of employment opportunities with emergence of new businesses

Expansion of the Indian MBA

Jump start of the Indian Economy post 1992 saw an expansion in supervisory and white collared jobs which were not necessarily for managers, in a booming services sector.

Entrepreneurs smelled a business opportunity in delivery of MBA programmes as there was an opportunity to attract customers and make profits.

This expansion went wrong on failing in –

  • Establishing any Parameters of Quality of design of an MBA programme
  • Monitoring any quality of conformance to the design
  • Scaling up due to lack of capability, capacity or credibility

Confused State of Affairs of Indian MBA

With the exception of some 200 out of over 5000 programmes, the Indian MBA is at cross roads today. The purpose of MBA degree in India, the process of delivery and the people in this game are all a matter of concern. There are clearly the following questions:

  • Is it a business of education or education of business?
  • Is it a liberal programme or a rigorous programme?
  • Is it for managers or would be managers or could be managers?
  • Is it a terminal educational degree for entry into the job-market?
  • Which job-market does the Indian MBAs address?
  • How Global or local should the Indian MBA be?

It is important that these questions are asked and an attempt to find the answers begins in right earnest now that the NITI Aayog has been tasked with strategising in this area of concern.

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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 – 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 re-actively, 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.


Read other posts:

P&L Duty of Universities is in National Interest

Power and Corruption

Bringing back Public Trust

Unravelling the Indian MBA

Sprouting Post-Modern Indian Ethos

Governance, Activism and Appeasement