Trends, insights and research to inform growth and innovation strategies in international higher education.

April 26, 2011

US Management Education: Rigor vs. Relevance

The Chronicle of Higher Education and the New York Times published a couple of interesting articles on the challenges faced by management education in the US. First article highlighted the degrading quality and rigor of undergraduate business programs and the other related story focused on the relevance of academically-qualified (PhD) faculty in business programs.

In a New York Times debate on the value of undergraduate business major, Professor Richard Arum, cited his research that business majors invest less than one hour a day in studying alone and hence he argues that "it is not surprising that business students show the lowest gains on measures of critical thinking, complex reasoning and written communication."

While interest of students in pursuing business programs is increasing, the standards of quality are decreasing. Every fifth undergraduate student in the US majors in business and the GMAT scores of business majors are lower than other majors (average GMAT score for marketing major is 493 as compared to 544 for humanities major).

Professor Khurana also notes "To compensate for this diminished credibility with students, business schools have taken to hiring business practitioners, usually employing them as lecturers and adjuncts. And, while students may find the experiences of some of these accomplished but non-academically credentialed individuals interesting, there is little evidence that students are being offered a deep and challenging intellectual experience."

In arguing against the requirement of PhD for business faculty, Professor James O'Toole of University of Denver says, "The most qualified person to teach someone who's going to be a practicing manager or not necessarily someone who has the best scholarly credentials."

The key is to find the right balance between relevance (practical application) and rigor (research foundations). Without academically-qualified faculty the rigor of the program will be compromised, however, management education also needs to have a meaningful real-world experience.

Further, not every business school has to be research driven. It is important to recognize that there are various segments of institutions and hence their positioning and value offered is different. For, example Harvard has to prove its though leadership by research while DeVry's Keller GSM does not claims or needs it's faculty to deliver research. Thus, it makes perfect sense for an institution subscribing to research-based model to require PhD for B-school faculty, however, many other institutions may be fine with MBA graduate with work experience. AACSB requirements apart, we cannot ignore that research brings reputation and hence institutions aspiring to gain prestige instead of mass-enrollments, are compelled to focus on research. 


Dr. Rahul Choudaha
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April 16, 2011

US is still the most attractive destination for international students

US is strengthening its dominance in attracting foreign students especially from China and India. Already every fifth globally mobile students is enrolled in the US higher education institutions (OECD). The recent survey of graduate schools by CGS  indicates that the number of applications for US universities has increased by 7% for Indians and 18 % for Chinese as compared to 1% and 20% respectively for last year. This indicates that there continues to be a strong intent of international students to study in the US.
I have been making two arguments on the sources and destinations in the short and medium-term:

Source countries: Expansion of local systems in India and China will continue to fuel demand for higher education abroad. This is contrary to perception that local capacity will give more options for students to stay back. I argue that expansion is taking place at a rapid pace and mostly at the expense of quality. Thus, many more will continue to go abroad in search of quality of education and better career prospects. 

Destination countries: US will maintain its leadership in attracting foreign students. Although, share of the US has decreased over years, it still enrolls every fifth foreign student. Over the years, people have been saying that the US will lose its leadership in international student market to Australia and the UK. I argue that the US has a huge capacity to absorb international students, offers diverse set of quality programs and has better career prospects than any other destination. For example, Australia and the UK already have significant proportion of their total enrollment as foreign students and this had resulted in the immigration and employment related issues. In contrast, the US has a large capacity to absorb international students and with the budget cuts at public universities, many more are actively recruiting international students.

Counter-trend in business programs: In search of ROI
One area where US is losing in the short-term is the decline in interest for business programs. In the previous posting, I analyzed that number of GMAT test-takers had reduced for India  in 2010. This counter-trend for business programs is a result of perception of poorer ROI of business programs offered by the US universities. For students, on the cost side, there are very limited financial aid and scholarships available and on the returns side, students seek jobs to recover the investments in education. Although, there are indicators of economic recovery, big-spree hiring by sectors like financial services, investment banking and consulting is still not happening. This means, that students will be considering destinations which have lower upfront investment or shorter duration of programs. This is where, the UK has emerged as a big winner with its one-year MBA model, which translates into lower upfront cost. For example, the number of Indian students in the UK has increased by 150% to nearly 25,000 students in five-years, primarily driven by master's level business programs.

For 2011, the overall trend seems to be of big getting bigger, where the US total enrollment is expected to increase. Business programs will face some challenges in the US while they will gain traction in other destinations which offer better value.

What are your thoughts? Share your experiences and trends you are witnessing.

Related earlier postings:
Drivers of Mobility of Indian and Chinese Students

Dr. Rahul Choudaha
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April 08, 2011

Admissions marketing mantras

Many wrongfully assume that marketing of colleges is same as marketing of cars, cell phones or cola. The result is undifferentiated positioning, overpromising of offerings, poor delivery of programs and disengaged customers i.e. students and alumni.

The alternative is to understand the key characteristics of higher education services and implement a marketing strategy that maps the needs of targeted student segments with the institutional program offerings.

Smit and Cavusgil note, “Colleges are selling highly intangible products with many costs other than money. The college student pays greatly in terms of time, loss of other potential income, psychic costs, and inconvenience costs. A college education obviously calls for an extreme level of involvement from its consumer.”

Marketing of higher education should focus on reaching to and communicating with the targeted segment of prospective students. It should help in bridging the information gap and engaging the prospective students about mutual fit.

#1. Recognise the role of admissions
#2. Marketing is not advertising
#3. Students are the best brand ambassadors
#4. The value of segments
#5. Internet and word-of-mouth matters
#6. Think talent supply chain and partnerships

Read full article published in EDU.

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April 01, 2011

Wake up IIMA: Lead the quality tranformation in Indian management education

Indian management education is in a state of crisis and the issues of quality have aggravated over time. There is an imminent need of a leader to inspire a collective consciousness of quality and reform among B-schools. This leadership vacuum is most suitably filled by the Indian Institute of Management, Ahmedabad (IIM-A) which is undoubtedly the most recognized and respected brand name in Indian management education.

Three primary strands where IIM-A could take a leadership role in shaping the management education agenda are: influencing practices and policies not only at the institutional level but also national level; building collaborations and alliances with other institutions; and encouraging interdisciplinary management education beyond traditional sectors and career paths.

Read complete article.

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