Monday, August 10, 2009

B-schools going the ISB way!

Wary of the policing by the All India Council for Technical Education -- the body that regulates technical education in the country -- more and more management schools are going the Indian School of Business way, opting for one-year management programmes and registering themselves as private limited entities under the Companies Act, 1956.

Around four B-schools that began operations in the past few months have all opted for one-year management programme against the conventional two-year courses.

"We do not want regulations to govern us. We want to be in sync with market forces. Being out of AICTE's purview gives us the flexibility to innovate because the curriculum is not decided by the regulatory body," Sunil Rai, CEO, Mumbai Business School, said.

"We are registered under the Companies Act, as we claim we are here to do business. This country needs a lot more ISBs. We are in the market to deliver the best in B-schools," he added.

MBS began operations in suburban Mumbai a few months ago. The school is registered under Section 25 of the Companies Act as a private entity. Its promoters include Godrej Sara Lee, Godrej Hicare and Godrej Hershey, besides individuals such as the school's Managing Director A Mahendran and Future Brands CEO Santosh Desai.

Another B-school, School of Inspired Leadership, which began operations in Gurgaon this July, has opted for a similar model. It is registered under section 21 of the Companies Act and managed by Grow Talent Company Ltd.

The school is promoted by industrialists Analjit Singh, chairman, Max India ; Yogesh Andlay, founder, Nucleus Software; Anil Sachdev, former director, Eicher, and K K Nohria, former chairman, Crompton Greaves , among others. Educational institutions in India can be set up only by trusts, societies and charitable companies, but the profits cannot be taken out of the institution and have to be reinvested. This not only restricts their expansion, but according to industry players, also encourages promoters to resort to creative accounting to take out profits from the institutions. Like MBS, Universal Business School, which is coming up at Karjat on the outskirts of Mumbai, is registered under Section 25 of the Companies Act. The B-school is promoted by Progressive Institutes and could opt for a one-year management programme. "We are talking to several international universities and could opt for an intensive one year management programme on the lines of ISB Hyderabad," said an official from the institute.

While these institutes are aware of the fact that ISB, which is associated with such top institutes as Kellogg, Wharton and London Business School, has been blacklisted by AICTE since its one-year management programme is not approved by the regulatory body, they are undeterred. "We are told AICTE could come up with regulations to accredit one year management programmes now. But that does not matter. Our relationship with the industry is good and we know our product will be accepted," said the CEO of one of the institutes.

MBS, however, is planning to approach the Federation of Indian Chambers of Commerce and Industry or Confederation of Indian Industry to accredit its programmes and inspect it. "We have applied for international accreditation for our B-school and we would like an industry body to accredit us, since that's what matters in the end," said Rai.

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