Anup K Singh, PhD
On 15th August, 1947, when India won her freedom, she was badly bruised, divided and deficient in human and economic wherewithal. The GDP growth of the British India after the First World War was around 1 percent. The economic baseline of India was quite abysmal. In addition, political institutions were weak and the idea of India almost looked questionable. Thus, economic development was set aside for the time being and nation building took a centre stage. Independent India was bifurcated into the British India and the princely India that has more than 550 princely states. Kashmir, Hyderabad and Junagarh states were unwilling to integrate with India. Once it seemed that if Hyderabad is not merged with India, then North and South India would be existing separately, like West Pakistan and East Pakistan. The rural India was divided into raiyatwari and zamindari. As the peasants were exploited by zamindars, the Indian National Congress party decided to abolish the zamindari system itself.
The industry was divided into managing agencies and multinationals and they were as different as chalk and cheese. The birth of the nation coincided with her first war with Pakistan in 1948. So, Indian independence came along with tumult, turmoil, and turbulence.
First Two Five-Year Plans
On 26th January, 1950, India became a democratic, secular republic and the constitution of India came into effect. As per the Constitution, education was in the state list and it was thus the primary responsibility of any state to provide education to its denizens.
The first general election was held during 1951-52 and the Indian National Congress stormed into power with a massive majority and Pandit Jawaharlal Nehru was the first democratically elected as the first Prime Minister of India. Pandit Nehru was a Cambridge educated science graduate and cherished the idea of scientific temper. He had rich international exposure. He wanted to create a modern India that can eventually be at par with esteemed nations of the world. Among other things, he was instrumental in establishing a host of cultural, literary, and educational institutions in India.
Pandit Nehru was a Fabien socialist. He was impressed by the progress of the USSR, using the planned economy model. He envisaged a mixed economy model, based on central planning and contribution from both public and private sector organisations. At the time of Independence, the private sector in India did not have either capital or technology to promote heavy industry. In fact, the Bombay Club of industrialists suggested such a model of mixed economy in 1944. Therefore, India emerged as a half-socialist and half-capitalist country.
Prof P C Mahalanobis was tasked with developing the planning process of India. The First Five-Year Plan was implemented for the period of 1951-1956, while the Second Five-Year Plan was implemented during 1956-1961. The focus of the First Five-Year Plan was on agriculture, whereas the emphasis of the Second Five-Year Plan was on heavy industry. Nehru was not only concerned about the political freedom of India, but also about the economic freedom of India. India did not have thriving international trade and there was scarcity of foreign currency. Import substitution, thus, was a significant part of the Second Five-Year Plan.
Heavy industry on the one hand and surging private sector on the other necessitated the need for highly trained and capable cadre of technologists and managers. As a result, a few Indian Institutes of Technology were established. Similarly, a felt need emerged to found an American business school like institution in India.
The Idea of a National Institution
Way back, in 1949, the Government of India tasked the All India Council of Technical Education (AICTE) to examine the scope of management education to promote the industrialisation of India. In turn, it recommended three measures: Establishment of All India Board of Technical Education in Management; establishment of the Administrative Staff College of India; and, establishment of a National Institute of Management of India. The National Institute of Management of India later took the shape of Indian Institute of Management.
The Ford Foundation (FF), among others, was keen to promote management education in Europe and the newly independent countries of Asia. It had probably two purposes: the managerial support for the capitalist system and the enhancement of the American impact during the Cold War. Importantly, the FF had already played a pivotal role in enhancing the quality of management in the United States. Moreover, it had a close linkage with Harvard Business School (HBS). Dr Douglas Ensminger, the Head of the FF in India discussed with Indian officials the matter of establishing a business school in India in March, 1955.
On the FF assignment, two professors of the HBS, Prof Richard Merriam and Prof Harold Thurlby arrived in India in 1957 and recommended to found a business school in India on the American pattern. Further, they proposed that it should be an independent institution, outside the university system. I have already pointed out the problems of the university system in India in my prior posts. Later, in 1959, George W Robbins, Associate Dean, Business School, the University of California, Log Angeles (UCLA) was engaged for the similar purpose and his recommendations were similar to the recommendations of the HBS study. Further, he suggested that the Government, the Industry and the Institution should work in tandem to evolve a vibrant management education institution. The Government of India accepted the recommendations of the Robbins study and decided to establish two business schools. It was a very far-reaching decision for the new India that was getting ready to meet the challenges of nation building.
The Twin Start-up IIMs
The two start-ups were the Indian Institute of Management, Calcutta (IIMC) and Indian Institute of Management, Ahmedabad (IIMA). The decision to establish the IIMC was taken earlier in 1960. Its American partner was the Massachusetts Institute of Technology through its Sloan School of Management. The location of the second business school was not yet decided. The first preference of the government was Bombay. Prof Vikram Sarabhai – an industrialist, scientist and institution builder – was closely involved with the project of the second IIM. Dr Jivaraj Mehta, the first chief minister of Gujarat and Kasturbhai Lalbhai, a leading industrialist of Ahmedabad who was instrumental in setting up several educational institutions in Ahmedabad, were other important stakeholders in the project. With enormous efforts from Dr Vikram Sarabhai to bring the second Indian Institute of Management to Ahmedabad, the Government of India finally decided to choose Ahmedabad as its location. It was earlier decided by the FF that the Business School of the UCLA would be the academic partner of the IIMA. However, it was not to be. Dr Sarabhai preferred the HBS. Thus, the two Boston based institutions played a critical role in the development of management education in India.
Two Business Schools of Boston
The Sloan School of Management (SSM) and Harvard Business School (HBS) are situated on the two sides of the Charles river in Boston. Both are highly reputed business schools. However, they are poles apart in many respects. The HBS is one of the oldest business schools, characterised by close contacts with top industrialists and business leaders, focus on general management and the case study method as the main pedagogical tool. At Harvard University, each school has lots of freedom and acts almost like an independent academic institution. Thus, the HBS developed its unique culture that was more practice oriented. On the other hand, the MIT Sloan School of Management, established in 1950, was more academic in its orientation. Its main strengths were in systems thinking, quantitative analysis and rigorous research. It did not adopt the case study method at all. Its academic climate was greatly influenced by its umbrella organisation MIT, that was highly academic in nature.
Courtesy: Wikipedia
There is a popular story about the relation between the two business schools. Prof Edgar Schein joined the MIT Sloan School of Management as a young professor and went to his department head to discuss his plan of research. Ed explored with his department head what he should do as a scholar. Promptly came the reply from the head, “Whatever you wish to do, please do. But don’t do the things that they do across the river.” The story amply shows that the two business schools were very different in their academic orientation.
The FF provided for the foreign exchange requirements of international collaborations of the two Boston based schools and two IIMs. It included provisions for International Teachers Programme (ITP) for Indian faculty, visits by American faculty, library, some equipment, professional fees to the architect in the case of the IIMA and other miscellaneous expenditure. Such financial support was valuable in creating the foundation of world-class business schools in India.
The IIMC
Indian Institute of Management, Calcutta was the first IIM. Calcutta was the first capital of British India and a metropolitan city in eastern India. Many managing agencies had their headquarters over there. In the fifties, it was a vibrant city, filled with business and trading activities. It had several high quality educational institutions. Thus, it has a salubrious client system for a business school and a supporting eco-system.
The IIMC was a central government, state government, the FF and industry venture. However, the participation of the private sector was minimal. The campus at Joka was quite large, but campus buildings were of average architectural quality. Further, most faculty preferred to stay in the city.
Its strategy was to attract high quality faculty and provide them with a conducive intellectual environment. It initially focussed on the training of professional managers at three levels: junior, middle and senior. Training, in turn, led to consulting assignments. Professors from the MIT helped the IIMC to strengthen management development programmes and to design post graduate programme (PGP) in management. Its faculty had strengths in economics and finance, quantitative methods and behavioural sciences. Several faculty had foreign degrees or were senior managers in different business organisations.
Courtesy: Wikipedia
In the 60s and 70s, Calcutta was afflicted by naxalism and the flight of capital started. Several multinationals started withdrawing their offices and production facilities from the city. After the 1971 war at the time of creation of Bangladesh, millions of refugees entered West Bengal, especially in Calcutta and strained its economy. In the late 70s, the Communists formed the government and it further hurt the economy. In other words, Calcutta as a business hub was deteriorating and declining fast.
In its early stage, the IIMC could attract high quality faculty talent. Gradually, it became difficult for the Institute to attract high calibre faculty. Over a period, the representation of faculty from the rest of India went down and the regionalisation of faculty started. Although the PGP students were in great demand, management development and consulting activities receded.
The influence of MIT Sloan School of Management was palpable on the IIMC. The faculty and students had a high degree of freedom at the IIMC. The focus was more on academic research and on areas like economics, production and quantitative methods. The client system was mostly government based, covering eastern and northeast India.
The IIMA
As discussed earlier, the central government had the plan to establish only one management school. However, it later decided to go for two. The IIMA was the second management school. Before the advent of the IIMA, Ahmedabad had two important institutions, i.e., Ahmedabad Textile Industry Research Association (ATIRA) and National Institute of Design (NID). The Sarabhai siblings – probably the most educated, sophisticated and cultured businessmen in the city of Ahmedabad – played vital role in their growth and development. Dr Vikram Sarabhai was the Director of ATIRA, while Gautam Sarabhai was the Chairman of the NID. Kasturbahi Lalbhai was the chairman of ATIRA and he adored Vikram Sarabhai. The state of Gujarat was created in 1960 and Dr Jivaraj Mehta was its first chief minister from May 1960 to September 1963. When the idea of a national management school in w
Western India was mooted, Dr Vikram Sarabhai got interested in it. He was already involved with the creation of strategic institutions like the Indian Space Research Organisation (ISRO) and Physical Research Laboratory (PRL). He had deep linkages with the central government and was personally known to Pandit Jawaharlal Nehru.
Dr Kamla Chowdhry was a professor of behavioural science at ATIRA. She was also a close friend of Dr Vikram Sarabhai. Both of them were convinced that the management school should be in Ahmedabad, not Bombay and Vikram could make it possible through his leadership. The FF wanted the business school of UCLA to be an academic partner of the new institution. However, again Kamla Chowdhry played a key role here. She had good contacts with Harvard professors and felt that HBS would be a better partner. Again, Vikram used his influence and replaced the UCLA business school with the HBS.
Kasturbhai Lalbhai supported Dr Vikram Sarabhai by mobilising business community and Dr Jivraj Mehta extended government support to him. Kasturbhai Lalbhai was from an illustrious industrialist family and advanced education in Gujarat through the Ahmedabad Education Society (AES). He was a member of National Planning Committee (NPC) in 1937, formed by the Indian National Congress under the leadership of Pandit Nehru. He was also one of the contributors of the Bombay Plan (1944-45). His commitment to nation building is par excellence.
Courtesy: Wikipedia
There were four partners in establishing the IIMA. The state government provided the land for the campus. The FF paid for foreign collaboration. The industry paid for buildings. The central government paid for recurring grants and any financial deficits. Eventually, the central government became the main promotor. Other partners went into the background. The IIMA was established in 1962 with Dr Vikram Sarabhai as its honorary Director and Dr Jivraj Mehta as its Chairman. Its PGP was launched in 1964. Dr Sarabhai continued as an honorary Director almost for four years. The first formal Director of the Institute was Ravi Matthai, who was earlier a professor at the IIMC.
Although the IIMA was established later than the IIMC, it went ahead because of three advantages it had over the IIMC. Its first advantage was the HBS collaboration. By the late fifties, the HBS had emerged as a top business school in the United States. It was a private business school, ensconced in the most prestigious American university. Furthermore, it had strong linkages with business barons and its alumni, who were in important leadership positions. Further, its case study method made is unique and is being adopted by most business schools across the world. Through industry connections and case study method, it demonstrated its practice orientation. The HBS encouraged the IIMA to recruit young faculty so that they can be developed better. The young faculty were sent for International Teachers Programme and doctoral programme at the HBS. In addition, the HBS experts encouraged the IIMA faculty to develop Indian cases. Some cases were written jointly. Several research associates were hired to develop cases under guidance of American and Indian experts. Faculty were also cajoled to write cases and many of them published Casebooks. Soon, the IIMA emerged as a case school of India.
The second advantage of the IIMA was its proximity to Bombay. Ahmedabad had small business base and large business organisations were conspicuous by their absence. Hence, faculty started working with Bombay based organisations, such as L&T, SBI, Air India, HUL, etc. Ahmedabad and Bombay are not far away. While Calcutta was gradually declining as a city, Bombay was flourishing and strengthening its position as a business and financial capital of India. The HBS showed the way to the IIMA faculty to relate seamlessly to its client system. The HBS not only emphasised case writing, but also stressed the importance of consulting in improving teaching and institution building. In spite of its locational disadvantage, the IIMA could create a robust client system.
Finally, the third advantage of the IIMA was its iconic campus and building designed by world famous architects Louis I Kahn – a professor of architecture at the University of Pennsylvania, and implemented by Balkrishna Vithaldad Doshi – a professor of architecture at the CEPT Ahmedabad, who is awarded with Pritzker Architecture Prize in 2018. Architect Anant Raje was also involved in the project. Kahn designed magnificent exposed brick based academic buildings around a large court, with huge façade, long corridors, large geometrical extractions, and wide lawns. Its piazza is grand, surrounded by trees. The library building is grand and spacious. Large social spaces are available for interaction among students. The academic building are beautifully landscaped. The buildings were medieval European in character than American or Indian and left a unique impression in the minds of people. Even today, the IIMA old campus is sui generis.
Common Threads
I just examined differences between the IIMC and IIMA. At the same time, they had several common threads. Obviously, they were the first business schools of India, after the American MBA model. They became the role models for the future business schools. Initially, both schools concentrated on management development programmes so that they can establish linkages with their client system as well as create awareness about the PGP. They also worked hard to get the support of the business organisations in placing their PGP students. In mid-sixties, most corporates did not feel the need to hire professionally trained managers. Thus, the IIMs had to create a market for them.
Secondly, they were business schools backed by the central government. They enjoyed financial support from it for a long time. They had world class infrastructure. Thirdly, they did not increase their size for a long time. Being a government organisation, they also suffered from several problems. They could not attract internationally renowned faculty because their salary structure was limited by the government. Moreover, they did not invite foreign students for their PGP. Most importantly, as they were fully supported by the government, they did not develop deep relations with their client system in the private sector. Rather they focussed more on the needs of government organisations.
The IIMs provided a pivotal role to faculty in institution building. They emerged as a faculty driven institution. The Faculty Council in which all faculty members participated is the final decision making body. The Director of the IIMs is not a leader who makes his own decision. Rather, he is one who implements the decisions collectively made by the faculty. Faculty centricity sometimes has adverse consequences. Decisions may be taken to protect faculty interest, and not to promote institutional interests. Politics and jockeying for power may be quite prevalent. Today, effective academic institutions aim to be more student centric.
The forerunner IIMs were small, specialised and selective. They were not a substitute of the university system, but an elite institution. They selected bright students from the IITs and elite colleges. Similarly, they were quite selective in recruiting faculty who would be acceptable to the industry. They were focussed on the PGP and management development, supplemented with consulting. They somehow ignored extension and connection with the society. They were somewhat inclusive, especially for women. The percentage of women in faculty and student body was tiny.
The MIT and IIMC collaboration ended before the HBS and IIMA collaboration. The Hill report was critical of collaborations and pointed out several flaws in them. It questioned the location of the IIMs and stated that the location was chosen for political reasons rather than by the objectives of the institutions. Secondly, there was no provision for period review, thus the effectiveness of collaborations was not known. Finally, the institutions helped in the development of professional managers, but they were unable to achieve other objectives, such as conducting indigenous research.
Conclusion
India was not far behind many nations in commencing management education. Canada, the United Kingdom, Philippines, France, etc. started business schools around the same time. In addition, these business schools were initially influenced by the American model. For almost two decades, the growth of business schools continued in the government sector. Only after the liberalisation of the Indian economy in the early nineties, the mushrooming of business schools in the private sector happened. Almost all of them followed the PGP model.
The idea behind the IIMs was to be free standing schools. Their separation from the university system had its own cost. They unwittingly developed a narrow perspective. They did not benefit from other disciplines as a typical business school would in a traditional university. In addition, they did not commence under graduate programme in management. In the United States, the MBA was the mainstay of management education. Nevertheless, under graduate education in management soon occupied a major place. As a result, BBA programme did not flourish in India.
Although the two IIMs did not produce many doctorates, their doctorates occupied important positions in other business schools. Their journal ‘Decision’ and ‘Vikalpa’ were also pioneering management journals of India.
I propose to conclude this post by raising a complex question, “How the start-up IIMs could achieve and maintain their top positions in India and why could they not enter the league of top business schools internationally?” The answer to the first part of the question is: the start-up IIMs were experimenting and innovating. They could attract high quality students in the PGP. They developed a strong base of successful alumni. Last but not the least; they gave autonomy and academic freedom to their faculty. The answer to the second part of the question is somewhat complex. The start-up IIMs were not very strong in research and internationalisation. They were gratified with their education and training success. There were no internal or external reasons or demands to do high quality research. As India herself was inward looking till the eighties, the start-up IIMs followed the suit. They did not visualise comparing and competing internationally. Consequently, they are a paradox: national champions, but international laggards.
Views are personal.
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