Like Nestle, B-Schools Are Businesses Too: Jago Grahak Jago

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India is aghast over the mislabeling of contents in Maggi noodles – Nestle claims that Maggi has zero MSG but lab tests confirm it has MSG and even unsafe amounts of lead. But while Nestle’s wordplay has drawn censure, Indian consumers are blissfully unaware of the rampant mislabeling done by B-Schools. Much like Nestle, some of the top B-Schools in India routinely mislabel their courses and follow different standards for Indian consumers than those they claim abroad.

Maggi’s slogan – ‘Taste Bhi, Health Bhi’ (both taste and health) has led generations of Indian mothers to believe that they are providing their children a nutritious meal by serving them a bowl of instant noodles.

Much the same way, B-Schools in India have had parents feeding a so called Masters in Business Administration (MBA) to their children right after graduation, giving them the wrong impression that they are giving their child a world-class education

Just as in the case of Maggi, the reality is quite different.

As we have shared often with our readers, an MBA is a post-experience degree and can not be pursued by fresh graduates. The degree Indian B-Schools are providing their pre-experience class is in reality a Masters in Business Management (MBM) and not an MBA. 

This misrepresentation is no isolated case – thanks to sub-standard local accreditation norms and a lax enforcement framework, even the best B-Schools in India are guilty of misleading students and preying on the unquestioning faith of Indian students in these institutions. 

What students and their parents fail to understand is that educational institutes are businesses too and are driven equally by the pursuit of ‘Lakshmi’ (Indian goddess of wealth) as ‘Saraswati’ (Indian goddess of learning).

We capture below a few glaring cases of mislabeling by B-Schools in India to help you become a smarter consumer of business education:

1. Mislabeling two-year PGP/ PGDM courses as MBA, despite these courses having failed to meet global standards for an MBA course 

While the Association of Universities (AIU) and All India Council for Technical Education (AICTE), two Indian regulatory bodies, award ‘MBA equivalent’ status to two-year PGP/ PGDM courses offered by IIMs, top global B-School accreditation body AMBA, accredits these very same courses as pre-experience Masters in Business Management (MBM) worldwide.

AMBA’s accreditation standards are clear: an MBA course must admit students with 3+ years of work experience while an MBM can admit candidates with 0-3 years work experience. So students with less than 3 years of work experience are eligible to pursue an MBM, not an MBA. Since the two-year PGP/ PGDM courses in India largely recruit freshers (most admits have less than a year of work experience and many have zero work experience), these courses are accredited by AMBA as MBMs.

This stipulation is meant to ensure that an MBA course delivers on its stated goal of preparing mid-career professionals for leadership roles.

IIM Lucknow (IIM L) and IIM Calcutta are two top B-Schools who have received Full Time MBA accreditation from AMBA, exclusively for their One Year MBA courses. But have a look at IIM L’s webpage below that talks about AMBA accreditation. Can you tell by looking at this page that the two-year PGP course is not accredited as an MBA and that only the one-year course (IPMX) has got full time MBA status?

IIM L pulls a fast one on students by simply dropping the details of accreditation their courses have received in order to imply that all its courses have achieved the same standard. But unlike EQUIS and AACSB which certify the overall quality of a B-School, AMBA accredits specific courses.  

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IIM Luckcnow hides the fact that its One Year MBA is accredited as a Full Time MBA and its two-year course as an MBM by AMBA

IIM L is a government institute, established to develop and lead the field of management education in India – it is scary when it chooses instead to distort facts.

Earlier this month when Xaviers School of Management (XLRI) got AMBA accreditation, they similarly played with semantics while speaking to the press about the development and failed to mention that only their one-year course has got full time MBA accreditation from AMBA. When we contacted them, they shirked the responsibility of communicating and clarifying these details and told us that students can visit the website and check details of accreditation there.

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A quick check on AMBA’s website reveals the facts

By not sharing the exact accreditation awarded to their courses, B-Schools are insulating their their long running two-year courses from an adverse impact while at the same time claiming to live up to global standards. 

Clarifying that the two-year PGP/ PGDM programmes are MBMs and not MBAs could kill the demand for these programmes. Since students need no work experience to apply to these programmes, lakhs of fresh graduates apply to these programmes every year thinking they are getting an MBA.  

Pre-experience PGP/ PGDM courses are lucrative for B-Schools for other reasons too: 

A. Cheaper to run: While PGP/ PGDM students need to be taught fundamentals in business, with work-experience ranging between 5-17 years work ex, One Year MBA students know most of these concepts already and need to be taught advanced concepts that will prepare them for leadership roles. B-School need to hire faculty with richer work experience in order to teach the One Year MBA students, which increases costs.

B. Finding entry level jobs for two-year PGP/ PGDM takes less effort: In 2013, while IIM A’s One Year MBA (PGPX) grads were placed at an average salary of Rs 27 lakh in senior roles, the school’s PGP grads were placed at an average salary of Rs 17.73 lakh in junior roles. Placing students in middle to senior roles (as any MBA outside India does) requires B-Schools to change their approach to placements. Most don’t want to invest time, money and effort in marketing One Year MBA grads, for whom the customer is often the CEO of a company instead of middle level HR managers that B-Schools have been talking to all these years.

2. Mislabeling the One Year MBA as an Executive MBA 

IIM Lucknow’s website introduces the school’s globally accredited Full Time MBA – the One Year Full Time MBA (IPMX) as an Executive MBA (a part-time course for working professionals). Check the image below: 

IIM L hides the fact that its One Year MBA is accredited as a Full Time MBA and its two-year course as an MBM by AMBA

IIM L misrepresents its globally accredited MBA as an Executive MBA

The use of the word ‘executive’ in the branding of the one-year MBA in India is wide-spread and most B-Schools use some combination of ‘MBA’ and ‘Executive’ for the branding of their post-experience MBA.

Why are Indian B-School’s creating the impression that their one-year MBA is an Executive MBA?

Well, pretty much for the same reasons B-Schools want to maintain the perception that their two-year PGP/ PGDM courses are MBAs. B-Schools want to avoid adversely affecting their top selling pre-experience course which is established as an MBA in popular perception.

Academicians we talked to told us on the condition of anonymity that its all about profits at some B-Schools, and about maintaining the status-quo at others.

Speaking in the context of IIMs, one Professor told us, “There is a mindset problem at IIMs – they are protective about their longer running two-year course and don’t understand that the One Year MBA is actually a stronger course to represent them going forward. Given the course’s global MBA accreditation, ability to represent IIMs on global rankings, better placements and intake of mature participants the One Year Course is the ideal flagship course.”   

3. Hiding that the two-year PGP course at IIMs fails to get ranked on the prestigious Financial Times MBA ranking 

At IIM A’s 47th Convocation in 2012, IIM A’s director Samir K Barua said, “The ranking of the PGP by FT, for the year 2011, improved to 7 among comparable programmes globally. This is the only programme from India that figures in the list of programmes ranked by FT”

Why is IIM A using vague language? Why is it not clearly communicating to all and sundry which ranking the PGP programme has been ranked in or what these ‘comparable programmes’ are?

IIM A has projected its PGP course as an MBA, and the vague language would have given parents, students and the media the impression that the PGP course has been ranked as an MBA along with other MBA programmes. But that is not what happened – as a pre-experience MBM programme, the PGP was ranked by FT in the MBM Ranking and not the MBA ranking

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Unfortunately this vague use of language was not a one off case. At the 48th convocation address in 2013, director, Samir K Barua said, “The academic programmes of the Institute continue to do well. The three post graduate programmes – the PGP, the PGP-ABM and the PGPX continue to be ranked with the best among comparable programmes globally.”
In 2015, Indian newspapers were replete with headlines such as ‘IIM A trumps Harvard on Career progression’ and ‘IIM A offers Better career growth than Harvard.
IIM A had once again failed to clearly communicate, this time to the media, that it was in fact IIM A’s One Year MBA (PGPX) that had trounced Harvard’s MBA – the FT MBA Ranking is not a ranking of B-Schools and doesn’t certify IIM A as better than Harvard.
Like AMBA’s MBA accreditation, which school’s try and appropriate for their two-year course through the use of vague language, here too the idea seems to be to appropriate the FT Ranking for the school’s two-year PGP course – the programme most people associate with IIM A.
IIM A is not alone in doing this. In 2014, IIM Bangalore’s One Year MBA (EPGP) debuted in the FT MBA ranking but IIM B failed to communicate to the media that the One Year MBA (EPGP) earned them a place in the FT MBA ranking.
The problem with mislabeling education is that it is far more harmful than mislabeling a pack of noodles. An MBA is not a cheap 2-minute snack – students invest tons of money and time in earning the degree.