Status of Management/Entrepreneurship Development Education in India
Foundation Stone for Management/Entrepreneurship Education in Indian Context
Education is defined as any act or experience that has formative effect on the mind, character or physical ability of the individual/recipient. Management is the organization and coordination of the activities of an enterprise/organization (Profit making or otherwise) in accordance with certain policies and in achievement of defined objectives. Management is often also described as art of working with and through people or getting work done (by self and others). Entrepreneurship is the capacity and willingness to undertake conception, organization, and management of a productiveventure with all attendant risks, while seeking profit as a reward. The essence of Management/Entrepreneurship lies is creation and delivery of “Value (Product or Services)” to stakeholders viz. Shareholders, Customers, Workers and Community etc.; which implies that all stakeholders receive goods, services or money considered to be fair and suitable equivalent of ‘something else (products or services)’. In other words, Management/Entrepreneurship essentially involves generation of a “Value creating Idea” and formulation of Business Model (basically a set of well laid out Business processes). The Manager/Entrepreneur must also take care that such an Idea has saliency in the Socio-cultural, Political, & Regulatory environment of the country, can withstand competitive pressures and is economically and financially viable. The ecological sustainability aspect of such business and protection of environment including interests of the local communities (indirect stakeholders in the business) must also be taken care of. The limited difference in the concept of Management and Entrepreneurship is that while the concept of Management encompasses most of human endeavours and organizations, the concept of Entrepreneurship is generally ascribed to detailing of profit-making activities.
In the above context, if our present system of education and training for budding Managers/Entrepreneurs is evaluated, we shall find a huge gap regards “skill set” that are required for the trainees to be able to responsibly deliver the job. While the students of Management/Entrepreneurship may be enthusiastic to undertake and perform the Job of Management/Entrepreneur, but sadly that’s not what the Training institutes are equipping them with. Most of our students, trainees, their parents and even teachers have negligible idea on what they are set out to accomplish while making decision to undertake the education/training on management or entrepreneurship. The basic skill set required is rather simple, and described below;
1. Generation or selection of a business idea or plan by identifying value for the stakeholders. Achieving the fructification of this idea should be the goal of the management/entrepreneurship education. Ideally, the idea/s should pre-exist in the minds of prospective trainee who wants to embark on the journey of undertaking management education. The trainee may have a clutch of vague ideas out of which he may decide to nurture of few depending upon resources, opportunities etc. The difference between an entrepreneur and manager is that while entrepreneur seeks to create and lead a business establishment himself, the manager goes generally for an existing vehicle i.e. a running organization that may be keen or can be a good platform to launch the “Value/product/services” to the society. The organization offers its existing processes and procedural framework and experience of co-workers for managers to enjoy the benefits off; thus allowing them to further nurture and refine their ideas before the launch. The entrepreneur have their set of family members, friends and relatives or partners to whom they may turn for advise but they need to undergo the journey, largely alone at least in the initial phase till such a time Angel investors and venture capitalist as well as competent managers start seeing a value in the enterprise.
The above aspect is largely ignored by the present system of management/entrepreneurship education in India. As per present process, the ‘Student’ is selected by the institute basis is past academic performance and “Test Scores” of the student in Aptitude examination of the institute followed by test of communication skills during Group Discussions and interviews. The process may be same as followed by most of the Management Institutes Worldwide, however with the difference that the student being recruited through the process may not have a clear “Purpose” behind undertaking the journey. Most of them may just nurture a vague idea that the “Certification” shall probably result in a better paid job in Indian scenario. This is amply demonstrated by the fact that there is very low level of attendance in the class-room of any good management institutes including the famed ones, which is a well-hidden fact. The students, who do not have a purpose, are unable to co-relate the Class-room discussions with their notions of the values of such education. They lack any “Purpose” or ideas that they may want progress and thus may not be seeking a framework or a body of knowledge as to how to progress such ideas. Therefore management education is received as any other theoretical course with importance of concepts and information about regulations, regulatory bodies and behavior of people towards management action being understood through trial and error while practicing at work later. Actual knowledge or process maturity/stable understanding may dawn even later through trial and error or may be better stated as: accidents and incorporation of lessons. Often the lessons may remain unincorporated if the managers are less ambitious/determined, a case that may be encouraged by our society with strong religious beliefs and a behavioral temptation to draw satisfaction/solace in deprivation.
2. Management/Entrepreneurship education should focus on proper evaluation of a business idea or conduct of a detailed feasibility study. The trainee should be able to understand the work/know sources of information/dwell in further details around/about the idea. He should be able to identify locations where similar ideas were implemented, the situations and circumstances in which these ideas flourished or extinguished, the challenges faced by people who progressed similar ideas earlier and reasons for those challenges and identify/relate what may be of relevance for own implementation. The trainee should also be able to get information about the sources for support for such ideas as well as sources that may challenge implementation of the idea. Also, such research may include information at Global, Regional as well as local (same country, city) level.
The trainee should be equipped with knowledge about enough information sources, to research and progress his/her ideas. He should know about various International and National - Industry Associations, Regulatory bodies, Licensing requirements, Technologies available, financing options etc. A trainee should be able to assess case studies of previous attempts implementation of similar ideas across the World as well as in the country, the circumstances, economic, socio-cultural and regulatory environment in the region, support systems and challenges and the level of success of such implementation.
In India, the Management institutes do spend time on developing understanding and importance of such research, however in absence of the ‘Purpose’ among the students, the training remains largely conceptual understanding which may be put to use only by a few of the students later (when working for some company). Needless to say that in the absence of the seriousness of the training/learning process, such attempts may often appear to be amateurish by Global Professional standards and thus leading to questions on Professionalism of Indian Management professionals. There have been instances where Indian Management professionals have proven their mettle on the Global stage, however in International scene, the expectation from the Management professional of another country is somewhat different- the expectation in international scene is sound conceptual understanding to imbibe the processes, fresh perspective to improve such processes, coping in multi-cultural environment, commitment, integrity and focus on bottom line. For actual implementation of such ideas, an expatriate manager may be able to receive a lot of support provided he is able to convincingly able to establish benefits of pursuing his idea. This is because an expatriate manager is not expected to be a champion in understanding the local laws or dealing with local authority or have an expertise for the socio-cultural beliefs and practices of local population. A student who may be somewhat better than an average student may be able to pick these traits in the training colleges. However, in domestic scenario, the expectation from a Manager is not only to bring implementable/actionable ideas but also to deliver results through successful implementation of these plans. This may also involve managing regulatory approvals, socio-cultural dimensions and leading workers to stabilize the new operations. It is here that our professionals fail as they are often short of actionable ideas as well as understanding of business environment (Regulatory, Socio-cultural, Business Policy level) to carry out successful implementation. So they tend to act as conduits to carry forward ideas of the business owners/Senior Management team, and providing them with supervisory support rather than management level support. No wonder most companies have their own management development plans where they hire trainees i.e. those with certificates from management institutes. Such trainees are trained about various processes and functions in the company/organization; then the few who show some promise are retained while others move on. Needless to say the exercise is a depiction of trial and error method (or accident and incorporation of lesson) of management with wastage of another couple of man-years to prepare or develop mostly average performing managers. Most organizations want to break free from such rig morale; however this ritual has now become such an essential part of the Human resource practice that in some large organizations, there may be dedicated program managers with a team performing the activity.
The Management Training institutes are comfortable placing their students with such companies as this reduces pressure on them to improve performance and to drive in painful internal change. They also cite practice of developed world where corporate hire students from Management institutes and put them to training for a defined period. The difference in the Developed West and India is that the Students there are hired for their ideas that they own and which may be relevant for the company/industry along with skills/dexterity displayed for Managerial aptitude/qualities picked during their management training. In India, the students may be put to the companies ‘aptitude test’ and then subject to interview for conceptual understanding about their role (a ceremonial process with little objectivity and largely unquantifiable results in terms of ability to recruit ‘most appropriate talent’). No wonder, many large business houses are already into the “Business of Management Institutes”, since the delivery requirement from such Business is just organizing lectures from people with Higher management qualification and getting a few companies to offer jobs to these students as ‘trainees’. No wonder the “Business of Management Education” is a lucrative business since not much is being sought by either the Trainees themselves who are ready to shell out significant fees and also by recruiters who may be looking for ‘Trainees’ often just to polish their conceptual skills further along with imparting knowledge of processes (rather than looking for merits of the ideas of the recruits for their company and his/her dexterity to be able to implement such ideas). No wonder most MNCs in India hire their managerial staff as a mix of their global staff and experienced professionals from India with a solid focus to identify level of skills through background/reference check for Implementation of ideas. The India corporate houses have tried to mock the processes of MNCs albeit with little understanding about the ‘Purpose’ of such processes.
3. Management/Entrepreneurship students must be able to identify and appreciate incentives and motives of individuals (customers, workers, including those with ulterior motives or differential behavior etc.), units (families/groups etc.), organizations (Government at local, provincial and national level, profit making and non-profit making, those with community oriented missions, geographic concerns or other concerns etc.) and communities (villages/geographical units, social/cultural groupings etc.) to act or organize in the manner they act or organize, understand how they make decisions and how they may be influenced especially with respect to progressing the ideas of the manager. The manager must also understand the ability and motivation of the society to take to the changes envisaged by the manager through introduction of new products, services or process changes. He/she should be able to assess the level of support that his ideas may have among customers, workers and other stakeholders and the reasons for the same. The theoretical lecture delivery method of Management Education doesn’t help much in equipping students develop appreciation for the incentives and motives of the people and groups to act and organize in the manner the way things are; and they have little appreciation on the different approaches that may use to influence decision making of people and groups. Some other management institutes claim to follow case method while some other follow other ways, however no ‘real’ research is carried out on ‘how to do things’, ‘successful approaches with appreciation of business environment in which the idea/execution methodology paid dividends’, ‘real challenges in dealing with Government departments and bodies’, and similar themes. These ideas are neither being penned nor discussed and unless students are made to appreciate these, management education may not be of much use other than learning some financial mathematics, some HR principles or operations terminologies. Some of the students may have their ideas but are unable to implement these ideas in the light of above lacunae in their knowledge and understanding about Management/Entrepreneurship. I had chance to interact and engage with a few students of an entrepreneurship institute and found that ideas with the student (for value creation) may be rather simplistic. They may not suit sophistication required for creating/managing large organizations with complex processes. Further the students may have little information how similar ideas may have been progressed globally or within the country and thus lack the understanding of how and to what extent the ideas may be scaled (Though their ideas may have business value and they may be able to define the value of such ideas, if coerced). This is so because most students have little experience of large business organizations prior to undertaking Business Management/entrepreneurship lessons. There may be complete lack of understanding of the regulatory aspect to progress such ideas i.e. licensing requirements, environmental clearance requirement, taxation aspect and requirement or other regulatory approvals. Also, there is little understanding on how to influence Customer groups, workers and other stakeholders to progress such ideas.
For example: While interacting with some students of management/entrepreneurship, I came across three ideas, one was to open a Dhabas/Eating joints; the other was a trading idea for Tamarind and Chironji (a dry fruit) and the third was open training institute for organic farming.
(A) When students group with idea for the eating joint were questioned about the regulatory requirements for such joints, they displayed very little information level. They had little idea on how hundreds of such joints are able to function often without complying with regulations. Though they displayed great knowledge about Food and how to get raw materials, manpower etc. for the menu items including costs and how the menu items may be ‘Priced’, however, little information was available about the costs of complying with regulations and thus overall profitability of the venture. Also, no concrete information was available how customer groups will be influenced in the light of competition from unorganized/unlicensed players, sustainable competitive advantages to be achieved if any, global and local progress of such ideas and scale such as those by McDonalds etc. In other words, the students has great idea about food, costs and pricing etc. but not enough information on how to run a Food Business or eating joint which is often the most simplest of businesses in most countries.
(B) When the group of student with the trading idea was questioned about their idea, it was discovered that the idea was based on price differential that prevails in some of the rural areas of Tamarind and Chironji. Some Tribals are involved with gathering of such dry fruits grown in some of the rural/jungle areas. These dry fruits are sold to ‘Buyers’ at the village at some 1/6th to 1/10th of the Wholesale price at some of the Large Wholesale markets of the country (Facts that have not been verified, however may be correct). E.g. it was said that Tamarind was available at Rs. 20-40 a Kg at Tribal village during season against Rs. 200 in wholesale market while Chironji is available Rs. 600 -1,800 a Kg in season against Rs. 6,000-9,000 per Kg. in Wholesale markets in the Cities. The students displayed very little Socio-cultural understanding of such Tribal villages and ascertain reasons on how such Price differential have been sustained by ‘Village Buyers’. The students also had very little information on the quantum of such business and the overall value that might be achieved by progressing such idea. They had little idea on how they may influence the setting and have a sustainable advantage for proposed business.
One of the biggest lacunae of our Management training is that graduated students are unable to develop any appreciation of Traditional/Rural/Politico-Administrative management practices without external help. They are unable to develop effective and workable plans/ideas and execute the same in our prevailing Business Environment. They seem helpless and are craving for support and comfort from business leaders to take decisions and responsibilities. At the directions of business leaders they can approach Tribal villages to cart wares like soaps, shoes, mobile phones etc., however they have little idea on how they can ‘Create Value’ for themselves and the communities they may have chance to associate with even if they may be privy to some Valued information such as Price differential of produce of the Tribal’s between village and city markets. This might be because our education is unable to train them to appreciate the complexity of our Governance systems and/or complexity of Socio-cultural setting. They are thus rendered helpless in dealing with our complex Government and society and contribute to society in a meaningful way. Very few succeed and a careful analysis of those with success shall often reveal backing of some political hand or an existing business house backing or business family background.
(C) The third group with the idea of training institute for organic farming was even vaguer with strong socialist impulses. Their idea veered around the possibility of employment generation for higher number of people in organic farms, ability to realize better prices from consumer through delivery of more nutritious products. While the values propagated might have some truth, however the students failed miserably in explaining as to why there was a massive shift to chemical fertilizers based Agriculture with Genetically engineered seeds and ever powerful pesticides. While arguing in favour of increased per hectare manpower usage, the group failed to convince that how such agricultural practice shall be more profitable for farmers since higher revenues for the produce may be outweighed by higher cost of labour. They also failed to convince that how they shall be able to get revenues for their tuitions from farm workers in agricultural farms who are amongst the lowest paid workers anywhere in the country. They also failed to establish the real size of market for such training in the face of programmes from government/NGOs which are generally offered free of cost and yet they fail to draw participation from farmers.
General failure of all the groups was that they failed to formulate/define a ‘Value offering’ for the society/stakeholders/consumers. They failed to identify set of processes and procedures that would help them to build an organization/system to deliver the offering. Such systems should also help in recording or capturing data relevant to the ‘Value Delivery’ process, identify successes and failures and improve on the ‘Value offering’, ‘delivery process’ and related methodology continuously. These help in evolution of successful businesses/organizations.
4. Management/entrepreneurship training should cultivate amongst students, an ability to understand and appreciate people with different skill sets and the ‘value’ contribution of such skills to a ‘Business enterprise’. They should also understand the differing motivations of people and incentives that may help in putting up a team for achievement of objectives of a ‘Business enterprise’. Above all, such training should inculcate among students, an ability to work with people with different skills as a team, to offer and receive help and support for progressing ideas and business objectives, to negotiate ad conclude deliverables, responsibilities, incentives etc. The students unable to identify/formulate a ‘Purpose’ are also unable to identify ‘Skills’ required for delivering Business objectives. They are thus unable to appreciate the Roles and contributions or ability of people to deliver towards achievement of Business objectives or ‘purpose’; unable to understand requirements from the team, formulate team of people with varying skills to deliver upon a job/objectives etc. In short, a team building skills as well team play skills remains less than well developed for the real life business parlance. This may be considered a serious lacunae from Corporate Management perspective, a not so well understood fact.
The objective of discussing the above were twofold: (a) This was to highlight the simplistic thinking of our students even in the face of ever increasing complexity of our businesses; (b) It was also to highlight that our Business Management/Entrepreneurship training institutes are failing to deliver on how to handle/nurture even simplistic ideas and so to expect them to nurture students with capability to take care of sophisticated business processes is increasingly complex and globalizes world is pressing for too much.
Part of the responsibility lies with our society. In India, doing business is still looked at as an activity reserved for certain specific ‘Caste’ specifically the ‘Vaisha Community’. When a member of any other community makes attempts to break into the league of entrepreneur, he does not receive much societal approval of his business endeavour from either his own community or from other business communities. So the Risks are amplified by much larger extent which includes risk of ‘Loss of Face’ (as for most of Asian communities). Since the ‘Scope’ of business is rather ‘Small or even Tiny’ at the beginning, the budding Entrepreneur is not able to weigh its rewards as being commensurate with the (amplified) Risk. The society also places a huge emphasis on compliance with Traditions and almost unflinching faith on the ‘Elders’ being always ‘wiser and right’. Thus an Entrepreneurial spirit to ‘challenge’ existing practices and spooking someone’s applecart by ‘Standing for’ something different from the age old practices are hugely discouraged. The Management/Entrepreneurship institutes do not help is appreciation of these aspects of our society and explain to students ways to cope with these challenges.
To elaborate further on above, let’s take the case of a cross-section from another profession say Medical Practitioners. Some over 300,000 of independent Medical Practitioners exist in our society today and the profession has existed for thousands of years. Earlier it was Traditional Medicine art practitioners and along with the British, the Modern Medicine Practitioners flourished. Thus such modern practitioners have existed for over 300 years along and host of support structure such as Hospitals, Medicine companies, Laboratories and Test centres have flourished in India. Thousands of Management graduates are employed by this ecosystem for its sustenance and to reach out to customers. It is also well known about Indian customer’s sensitivity to ‘Price’; as well requirement of ‘Quality’ aspect for Medicine to flourish. However, almost none of the Medical Practitioner’s offerings clearly reflect the relationship of the Doctor’s business with ‘Price’ or for that matter with ‘Quality’. Almost none of the Doctor wants to be identified to be operating in a Low Price or Mid-Priced or High-Priced segment. Also, these Doctors apart from Charging directly from patient also have tie-up for referral fees or incentives from Test Centers/Laboratories and/or Medicine companies. None of the doctor clearly declares their relationship with such supporting organizations/companies. Thus their overall relationship with Price remains a big question mark. Also, there are frequent changes in Loyalty of these doctors with support centers; they also change their modus operandi with regards to diagnosis and this creates doubt regarding their relationship with ‘Quality’ as well. Thus, in spite of thousands of Management Graduates having stake in prosperity of the Medicine Ecosystem and the Well-being of doctors, we have not been able to either evolve a single Business out of some 300,000 business whose relationship with Price and Quality is well communicated to society (if the same exists, the same is not documented and no case study of success or failure is known). Thus businesses have failed to identify processes to deliver the Value offering. No doctor could be persuaded to take a clear stand regards Direct and indirect Pricing, various quality parameters etc. and processes could not be established for value delivery.
The above ideas cannot be thought as new, however there is no known case for implementation of such ideas. Thus the attitude and behavior of society towards modern management thoughts, is in question since the society at large is yet to assimilate the ideas. It is not just with doctors but with almost all small businesses where relationship of such businesses with important society’s concerns remains less than clear even with armies of management graduates engaged with them. The case of doctors here is taken just to highlight a well educated community’s treatment of modern management values. Thus the students seeking engagement within the limited sphere of Large corporate where some of Management principle seems to have some relevance may not deserve entire Blame.
What the institutes have done is copying the curriculum of some of the well known institutes and delivery of lectures, developing some number crunching skills including discussions on a few case studies. The Trainers/Professors have little idea or heed for the relevance of such education to the trainees/society. Little emphasis is to research on the requirements of the society/businesses and how to make training more relevant for the students. In part, if our society fails to make demands on its institutions in more sophisticated manner with appropriate measures to reward success and punish failure in aggressive way, then such practices shall continue to flourish. After all the management institutes flourish as part of the society and survive as along as society shall afford them. Thus it is imperative that the society should continue to push the triumvirate of students, teachers and parents towards realization of the meaning of management/entrepreneurship and help nurturing of the values and skills required by our society. While the market forces shall continue to deliver upon their job, however thoughtful persons and media should encourage discussions on such important aspect such as education, higher education, specific professional education etc. to highlight the lacunae in our system and thus fulfill their responsibilities towards the society and its youth.
Further Reading suggested:
1) http://www.scribd.com/doc/57115930/An-Assessment-of-Business-Environment-New-Vistas-for-Small-Medium-Tiny-Entrepreneurs-in-India-Yr-2011
2) http://www.scribd.com/doc/57925075/Mindset-Good-Worker-Vs-Manager-Mindset-Corporate-Management-Vs-SME-Entrepreneur
3) http://www.scribd.com/doc/32214971/An-Essay-on-Education-Analysis-of-Education-System-in-India-What-we-need-to-modify