f o r    m a n a g i n g    t o m o r r o w
JULY 16, 2006
 Cover Story
 BT Special
 Back of the Book

Widening Video Ad Market
The $12.5 billion global online advertising market is poised to grow. As broadband penetration increases, eMarketers are eyeing opportunities to tap the online video ad market, which is set to cross $1.5 billion by 2009. With major portals such as AOL and Yahoo re-inventing themselves to showcase more multimedia and interactive elements, sky seems to be the limit.

Flying High
Outsourcing is taking wings and how. Flight training is moving overseas with aviation boom creating a huge shortage of commercial pilots in India. The country will require anywhere between 2,500 and 4,000 pilots to fill cockpits over the next six years. Eyeing the market, institutes in the US, Canada and Australia are offering tailor-made courses. A look at the flying season.
More Net Specials
Business Today,  July 2, 2006
India's Best B-schools

IIM Ahmedabad stays rock solid at #1, but there are plenty of gainers and losers in this year's survey. More importantly, the overall infrastructure at a B-school, its quality of placements and faculty mattered even more to our survey respondents, comprising recruiters, MBA wannabes, MBA students, young executives, and function heads. Presenting the only customer-focussed survey of B-schools in the country.

1 Indian Institute of Management Ahmedabad
2 Indian Institute of Management Bangalore
3 Indian Institute of Management Calcutta
4 Symbiosis, Pune
5 Indian Institute of Management Lucknow
6 XLRI, Jamshedpur
7 JBIMS, Mumbai
8 Indian Institute of Management Indore
9 Faculty of Management Studies, Delhi
10 Indian Institute of Foreign Trade, Delhi

By all accounts, management education in India is booming. At last count, there were 1,257 approved business schools, 125,000 full-time and 100,000 distance MBA students, and another 130,000 MBA wannabes taking the common admission test (cat) every year. As for the recruiters, they just can't seem to get enough of the talent graduating from the top B-schools. Result: Indian companies that were traditionally Day Zero (that is, the first to interview students at campus placements) at, say, IIM Ahmedabad or Bangalore, are getting pushed to Day One by global I-banks and consulting firms, and salaries are going through the roof.

The highest dollar salary offer this year was $193,000 (Rs 88.78 lakh) and went to an IIM Bangalore grad. (For the record, the Hyderabad-based Indian School of Business or ISB snagged the highest dollar salary of $233,800, or Rs 1.08 crore, but two caveats are in order: One, the student had 10 years of work experience and, two, ISB is not part of our survey, since it only runs a one-year MBA programme, unlike the two-year courses this survey considers.) The scramble for talent isn't surprising. With the economy growing at more than 8 per cent and the services sector booming, companies are hiring by the hundreds. Tech giant Infosys, for example, hired 417 fresh MBAs this year, compared to 181 the year before.

Given that backdrop, what does the fourth (the seventh, in all) Business Today-ACNielsen ORG-MARG survey of business schools in the country reveal? Let's begin with the rankings. IIM Ahmedabad, despite losing score, remains the #1 B-school by far. Its brand equity score of 5.06 (see How We Did It on page 162 for details on the methodology) is almost double that of #2, IIM-B, which actually has improved its score to 2.65. IIM Calcutta also lost points, but regained its #3 position from FMS Delhi. The surprise this year, however, was Symbiosis, which jumped to the #4 slot, ahead of IIM Lucknow and XLRI Jamshedpur.

Before we go any further, a word of caution: The BT-ACNielsen ORG-MARG survey is based on the perceptions of B-school stakeholders, comprising recruiters, functional heads, MBA wannabes, MBA students and young executives. While it does ask them to rank a shortlist of 30 schools on eight broad attributes, including things like reputation, infrastructure and faculty, it does not quantitatively measure any of the attributes. To that extent, the survey works like an exit poll-the B-school ranks reveal how our 526 respondents voted on each of the 30 schools. Unfortunately, that also means some high-decibel B-school advertisers end up garnering higher salience, while some others (better schools, but not as aggressive advertisers) rank lower on popular perception. So, we wouldn't be surprised if some of our readers didn't agree with the rankings.

Coming back to the findings of the survey, there's a clear indication that the B-school 'consumer', meaning MBA wannabes and recruiters, is getting more and more demanding. Take placements, for example. Unlike in our previous surveys, the respondents put greater emphasis on the quality of placements rather than the success of placements. In other words, if you are a B-school, it's not enough if you achieve 100 per cent placement; where you place your graduates and for how much matter more. As for the recruiters, they gave the highest weightage to B-school infrastructure, followed by its reputation. Quality of placements and the availability of specialised courses were also two other important considerations for them.

Seen as brands, our top B-schools lost a bit of their sheen. While IIM-A continues to be the only monopoly brand (monopoly brands have a brand equity index score between 4 and 6) over the last four years, the other B-schools have been gaining and losing. Until last year, there were half-a-dozen distinct brands (with scores between 2 and 3), including IIM-B, IIM-C, XLRI, Indian Institute of Foreign Trade (IIFT) and FMS Delhi. But this year, there was just one: IIM-B, which was also the only winning brand, the category between monopoly and distinct brands. Why does the distinction matter? Because recruiters and MBA wannabes are choosy about from where they hire and graduate, respectively. The more exclusive the brand, the better their takeout.

Problem Of Paucity

That said, it is a fact that tier-II schools have been pulling up their socks, prompting some of the top-drawer recruiters to visit their campuses. However, the bigger reason why recruiters are diversifying is two-fold: Insufficient supply from the IIMs and, consequently, high expectations of compensation. Take Infosys, for example. This year, IT made 547 offers in all, but only 417 were accepted. At IIM A, B and C, Infosys made nine offers, but just five joined. Says T.V. Mohandas Pai, Director (HR): "The IIMs should be graduating three to four times of what they currently do. Indian industry is being deprived of talent."

The point Pai is trying to drive home is that Indian recruiters in particular are being crowded out of the IIMs by foreign companies, who lure students with top-dollar salaries and foreign postings. As a result, "B-school salaries are going up faster than what industry can afford," notes Pai. That isn't the only complaint that recruiters have. Others like K. Ramkumar, Senior General Manager, ICICI Bank, say that there has been no significant change over the years in the knowledge body of B-schools. "Tell me which school offers a course in sales management?" he asks. This year, ICICI hired 85 MBA grads from tier-I schools, 400 from tier-II and 1,000 from tier-III.

As a result, some of the big employers are partnering with B-schools to come up with customised courses. Last year, Hindustan Lever, which hires between 25 and 30 fresh MBAs every year, ran a full-credit course on "marketing in practice" at IIM-C. The content was drawn up in consultation with the IIM-C faculty, but was taught by HLL's own managers. Explains D. Harish, Vice President (HR), HLL: "Since recruitment is quite an intensive affair, we'd rather spend our energies on tier-I institutions, which provide us appropriate talent." Come August, ICICI Bank's Ramkumar will also be meeting with tier-II B-schools to devise courses that are more relevant for financial services companies like ICICI Bank. Already, Ramkumar reveals, some 3,000 students at tier-II and tier-III B-schools are studying banking as part of their curriculum. "The premier schools are difficult to influence, but we are working with the tier-II and III schools," he says.

For such B-schools, it's a win-win deal. They not only get the relevant knowledge and faculty from industry, but also ready recruiters. It will be a long time before any one of them gets close to where IIM-A is, but there's no doubt they are on the right track.




Partners: BT-Mercer-TNS—The Best Companies To Work For In India