Increase in batch sizes at top B schools in India is justified

 

AGAINST the motion: IIM Bangalore         (Read IIM Ahmedabad's argument FOR the motion)

1. Capacity constraints on physical infrastructure

Seat hikes at IIMB in 2008 had forced students to stay in single rooms on a twin sharing basis. The 100 acre campus has its gyms, playgrounds, mess, auditorium and printing facilities running at full capacity with hardly any space for new constructions. The college has been forced to expand out by acquiring 100 acres of land in Arekerefor a satellite campus. The first-of-its-kind experiment of running a twin campus separated by quite some distance will have its own set of challenges
A similar story unfolds in the 40-acre IIMK and 35-acre MDI campuses. Residence in MDI and for freshers in IIMK is on a twin sharing basis. Space is constrained for outdoor sports with the MDI miniature golf course being used as a cricket grounds and IIMK securing permission from NIT Calicut for the use of its sporting facilities.

2. Student’s stand to lose

Larger batch sizes disadvantage students because:

A decreasing student-faculty ratio (from 1:6 to 1:10) ^[1]   adversely impacts teaching.

The willingness of students to contribute through increased class participation reduces .Students are more comfortable communicating in smaller groups but remain indifferent if they feel their opinions get diluted in a larger class.

Professors increasingly resort to assigning the exam evaluation to their assistants leading to a growing disconnect in the professor’s understanding of class performance.

Each student group gets less time to discuss their projects/term papers with the faculty.

 

3. The faculty’s dilemma

More students imply greater number of classes as courses get overbid and faculties split classes into two. The faculty spends more time teaching, meeting students for project discussions, attending greater number of student presentations and handling administrative responsibilities such as organizing student-teacher interactions and heading club activities all of which makes him a better teacher or administrator but not a good researcher.

Older IIMs have been sending their professors to the campuses of newer IIMs as part of their mentorship responsibilities, further pressing the faculty on time.

4. Placements

The reason for a seat hike in 2008 was two-fold:

(a)  To ensure that the number of general category seats does not get affected after the implementation of OBC reservation.

(b)  The expectation that there is an unmet need for good managers in the country

While there is social justification for the first, there is only so much demand for good analysts by firms which they are able to recruit from lower tier institutes at lower salaries. Indore and Lucknow with batch sizes of 450+ paid for their reputation as they either struggled to or took longer to place all their students. Contrast this with the placements of XLRI and MDI. Both colleges ensured 100% placement (330 for MDI and 240 for XLRI).

5. Why hike intake when newer colleges are being established?

Given below are the fee structures of the major B-schools in the country.

Top B-schools	Fee for 2011-13
IIM Ahmedabad	Rs 14.4 lakh
IIM Bangalore	Rs 13 lakh
IIM Calcutta	Rs 13.5 lakh
IIM Lucknow	Rs 8 lakh
IIM Kozhikode	Rs 10 lakh
IIM Indore	Rs 12 lakh
IIM Shillong	Rs 10 lakh
IIM Rohtak	Rs 9 lakh
IIM Jaipur	Rs 9 lakh
IIM Ranchi	Rs 9 lakh
IIFT	Rs 10 lakh
FMS	Rs 21,000
SPJIMR	Rs 8.7 lakh
XLRI	Rs 12 lakh
XIMB	Rs 7.8 lakh

Source: www.learnhub.com^[3]

With the fees in newer IIMs being about 40% cheaper than their established brethren it makes more sense to establish and expand seats in the newer colleges. This prevents deterioration in standards in the old schools while allowing the newer ones to grow quicker with better student quality.

6. Dilution of brand equity

In 1991, roughly one in 30 aspirants could hope to secure an IIM admission. In 2008 it was one in 160. ^[4]With such low conversion ratios comes a sense of exclusivity among the students. Only 2500 students making it to the top B-schools from a pool of 250,000 people is a seen as a validation of the quality. The feeling of exclusivity and the desirability of the top B-schools may be diluted with a seat hike.

7. Quality of students may take a beating

A larger batch is bound to have a larger proportion of students who are not the same as the top-notch caliber. Incidentally the “above-average” are the ones recruited by top companies leaving the others to compromise on their interests. The “others” will be better served if they joined an institute which was little less competitive since it would allow these highly worthy people to get a shot at the sectors they always wanted to pursue if not the company they wanted to get into. With “exclusive” companies that were initially reserved for the top 3 B-schools visiting other campuses the argument does indeed make sense. A case in point is the arrival of BCG on Indore campus – the youngest of the six “old” IIMs.

8. Increase in fee

Given below is the series of fee hikes for IIMA and their revenue and cost analysis ^[5]:

^{Fee hikes in IIMA}

Year	2002	2005	2006	2007	2008	2009	2010
Fee in Rs lacs	1.5	2	3	5	11.5	12.5	13.5

 

Revenues                                                                      Expenditure

	Income	Rs. Million			Expenditure	Rs. Million
1	Revenue from fee	348		1	Total expenditure on account of salaries paid to permanent faculty members for year (2008-09)	39
2	Revenue from consultancy	206		2	Total expenditure on account of salaries paid to visiting faculty members for year (2008-09)	4
3	Revenue from  MDPs	119		3	Total expenditure on account of salaries paid to support staff for year (2008-09)	84
4	Income from CAT	30		4	Expenditure on account of building maintenance	7
6	Placement Income	34		5	Expenditure on account of new construction (capital expenditure)	57
7	Research Project Income	36		6	Other establishment expenditure (incl. arrears of 6th pay commission)	274
8	Interest on Investment	41
9	Other Income	156
10	Total income	972		7	Other administrative expenditure	72
				8	Direct expenditure on Long Duration Prog.	180
				9	Expenditure on MDP Programs & Projects	261
				10	Total expenditure (excluding depreciation)	978

Source : Data obtained from IIMA by Premchand Palety using RTI act

3 things become evident from the analysis:

(a) The 6^th pay commission arrears contributed 28% as a onetime expenditure

(b) About 33% of total expenses (excluding pay commission arrears) pertained to academic, infrastructure and administration all of which depend directly on the number of students present in the university.

(c) The post graduate programme cross subsidizes the management development programme. The MDP revenues do not fully recoup the expenditure and the difference has ostensibly been milked out of the 2 year flagship programme. It becomes clear that the real intention of a size increase is not to afford education to talented people but really to fund other more expensive programmes.

Source:http://economictimes.indiatimes.com^[6]

 

9. The free rider problem

Top B-schools require their students to participate in group projects. A large batch size increases the number of students per group resulting in an increased temptation among students to piggy back on their group-mates who eagerly complete the work. With the free rider not benefitting from this exercise the purpose of affording education to more people is defeated.

Conclusion

Giving more students the opportunity to receive education in institutions renowned for their quality of education and for the great future prospects is no doubt a great idea but doing so particularly for motives other than ensuring that quality education reaches more students is bound to affect the existing quality of student life and institute reputation.

- Kunal Ashok and Mohit Srivastava (IIM Bangalore)

Participant Profiles – IIM Bangalore (Kunal Ashok and Mohit Srivastava)

Kunal is a 2^nd Year student at IIM Bangalore, born and raised in Orissa. He has 2 years of work experience with Goldman Sachs. He intends to pursue a career in Finance. His hobbies include debating and article writing.

Mohit hails from the holy and the oldest city on the banks of Ganges - Varanasi. After his engineering from IIIT Hyderabad in Computer Science, he worked at Amazon.com as a Software Development Engineer for 2 years and has now joined IIM Bangalore as a PGP first year student.

Counterpunch

IIM Ahmedabad's counterpunch to the opening argument above by IIM Bangalore :

In the opening argument put forward by our team, our approach was to consider both positives and negatives of the seat expansion in top business schools and had come to the conclusion that the advantages far outweigh the disadvantages. In the process, we had already discussed and refuted many of the arguments put forward by our opponents. We have further elaborate on a few blanket issues that are perceived as many discrete problems and then to tackle them individually as well.

1.       Capacity constraints on physical infrastructure
2.       Student’s stand to lose
3.      The faculty’s dilemma

Both the academic and physical infrastructure of the institutes will be jolted by the sudden increase in the number of students, and will face temporary constraints. But the problem is already fading away, as the institutes have stepped up construction activity and increased capacity of their faculty development programs. The fundamental problem is the lack of prudence from Indian Government in policy making. Ideally, the demand for management professionals could have been forecasted and the reservation quotas should have been implemented with an interval period that allowed the institutes to ramp up the infrastructure. But these are clearly problems caused by poor implementation, and do not invalidate the core need that necessitates the policy in the long run.

4.       Placements

A major part of the problem faced by the institutes in placement of students can be attributed to predisposition among the students that only MNCs are worth working for. For a long time when the old IIMs began, there were very few MNCs that came for the placements and most others established themselves through lesser known companies. But the bias among current generation in favor of MNCs, limits talent availability for Indian companies keen on recruitment.

5.       Prefer newer colleges to expansion of existing capacity

The rationale used to reach this conclusion is highly flawed and contradictory. The newer IIMs function with worse infrastructure than the existing ones, as most new IIMs are using rented temporary premises without proper sport, hostel or library facilities. This is the major reason for the lesser fee in the newer institutes, and the fee is bound to rise once dedicated facilities are operational.  (pagalguy, 2011) (pagalguy, 2010)

6. Dilution of brand equity

7. Quality of students may take a beating

I hold to our argument in our opening statement, that pursuit of exclusivity and elitism is rather futile in the very sense of the word. Exclusivity is a highly relative term that cannot be used to set standards and it is not in the vision or mission of any educational institute for the same reason. In a social group of any size, the least qualified in the group will be burdening the most qualified, and it can be no reason for segregating the group into two for it will be a never-ending and futile process. It is not for the institute to create exclusivity, but to maintain academic standards set around a perpetually evolving external environment. Considering that the external factors in India, such as basic literacy, industry, professional outlook that have improved over time, the number and quality of people aspiring for professional higher education has increased continuously. So, even on a relative basis, the number of people admitted into the top institutes after expansion, stays in proportion to the number of people expecting to get in. There was a disproportionate peak in the middle, as the number of CAT candidates increased from 1 lakh in 2000 to 2.3 lakhs in 2007, without major increase in number of seats, and has actually been eased out with the expansion of capacity (Bajaj, 2008) (businesstoday, 2010)

8. Increase in fee

In spite of the intimidating and suspiciously anti-intuitive data, the rationale drawn from it is again flawed. The expenditure for MDP program seems to be more than the revenue from it. But most other expenditures, which include maintenance, faculty fees and support staffs, are shared by the entire IIMA community that includes the MDP, FDP members as well, and has not been included in the calculation. So, there is no case of cross-subsidizing, and IIMA has not reached its position through such mismanagement as stealing from students to fund corporates.

9. Free-Rider Problem:

The argument is that due to the increase in batch size, the group size also increases. But it is rendered baseless, as the class and group sizes have not changed much for a long time. Even if it is assumed that the group size increases, it is known that academic rigor has remained constant through the ages, the group, on an average, still gets more people in a group to finish the same amount of work, which is actually decreasing the workload. And the proportional size of the batch that constitutes the free-riders, and hence those who do not gain from the education remains the same in spite of the increase.

We do not deny the existence of the problems caused by the policy, though not in the numbers that the opposition has come out with. But we rather insist that the advantages are larger and last longer while the disadvantages are rather temporary inconveniences and hence are necessary.

 

(Please note that the arguments put forward below cannot be ascribed as the participants’ individual opinions. All arguments put forward are only for the purpose of this debate competition.)

 

Works Cited (CounterPunch by IIM A)

Bajaj, A. (2008, October 1). CAT me if u can. Retrieved August 04, 2012, from http://commonadmissiontest.blogspot.in: http://commonadmissiontest.blogspot.in/2008/10/iim-cat-2008-number-of-applicants-up-by.html

businesstoday. (2010, October 3). businesstoday. Retrieved August 04, 2012, from http://businesstoday.intoday.in: http://businesstoday.intoday.in/story/playing-favourites/1/9428.html

pagalguy. (2010, October 14). pagalguy. Retrieved August 4, 2012, from http://www.pagalguy.com: http://www.pagalguy.com/news/first-peek-into-iim-ranchi-a-8578

pagalguy. (2011, September 27). http://www.pagalguy.com. Retrieved August 4, 2012, from pagalguy: http://www.pagalguy.com/news/first-look-iim-trichy-city-temples-100-year-old-schools-now-iim-a-18412

 

 

References (Opening arguments by IIM Bangalore)

[1] <http://economictimes.indiatimes.com/news/news-by-industry/services/education/rise-in-iim-batch-size-seen-affecting-teaching-quality/articleshow/5558432.cms?intenttarget=no

[2] <http://www.subhashbhatnagar.org/2012/01/reflections-about-iima-culture.html>

[3]<http://cat.learnhub.com/lesson/20397-fee-structure-of-top-15-b-schools-of-india-for-batch-2011-13>

[4] <http://m.economictimes.com/PDAET/articleshow/msid-2744722,curpg-2.cms>

[5] <http://www.cfore.org/feehike.html>

[6] <http://economictimes.indiatimes.com/news/news-by-industry/services/education/iim-fees-trebles-in-5-years/articleshow/12629380.cms>