Vasudev Murthy is visiting faculty at IIM-B and managing partner, Focal Concepts, Bangalore

It’s the time of the year when an estimated 500,000 college and university graduates and/or early and mid-career business managers are getting ready to enter India’s 4,500 B-schools. They have been pumped up by parents, teachers and the media that an MBA (Master of business administration) certificate is a passport to a swift climb up the executive ladder or business success.

The country’s top-ranked 13 Central government-funded Indian Institutes of Management (IIMs), numbered among the world’s top 25 B-schools, churn out more than 11,000 MBA postgrads every year. In addition with the other 4,000 plus B-schools graduating over 40,000 MBAs annually, questions are increasingly being asked about the effectiveness of B-schools and the quality of the students they certify as industry-ready. This is a positive and healthy development. Although over the years, many IIM and other B-school alumni have moved up corporate ladders and become captains of industry, doubts being raised about the industry-readiness of MBAs are centred not so much around the quality of students, as faculty.

Unlike other disciplines, business management is an applied subject. Theory has its place but principles of practice are more important. Moreover, while the average age of B-school entrants abroad is the late 20s — in America’s top 10 B-schools including Harvard, Stanford, Chicago, Wharton etc, it’s 27 — the average age of MBA entrants in India is much lower because most tend to enter B-schools immediately after completing undergraduate education. It’s nobody’s case that the latter are intellectually inferior. However, they generally lack experience and maturity, which limits their effectiveness when they enter workplaces as ‘managers’. This phenomenon is also perhaps a reflection of societal traditions which ordain the time of youth as best suited for education.

Meanwhile, with the popularity of business management education having captured the imagination of India’s 250-300 million middle class, B-schools with inadequate infrastructure and dubious parentage have mushroomed (3,600 plus according to the India Education Review) across the country. With droves of poorly counselled and inexperienced students driven by peer pressure and inadequate research entering the rarefied atmosphere of the corporate world, India Inc is experiencing the hollowing-out effect of too many half-baked managers seeped in theory, seeking short-cuts to the top without spending time in actual hands-on value creation.

Therefore in the interests of factor productivity and global competitiveness of Indian industry, it’s necessary to address the fundamental question of management education. If management is an applied art, how can full-time management faculty be made more effective?

Management education worldwide thrives on the case study method — which takes an actual business situation and examines it from various theoretical angles. What brings it to life, however, are two main ingredients:

• Professors who have lived the story or something equivalent. In other words, faculty with actual business experience who have experienced risk and uncertainty.

• Students with work experience who can relate to real-life examples.

While some faculty are well regarded in the industry for their intelligence and insights, they tend to operate from a position of relative immunity not having experienced the stress and pressures of corporate life. Their professional career paths are fairly safe and business risks of choosing alternative paths of action tend to be foreign to them. In the absence of such experience and accumulation of skills needed to survive in the corridors of corporate power, they tend to have little credibility in the classroom, especially among students with industry experience.

When educators are unable to narrate authentic experiences in their classrooms, they cannot ‘teach’ management — they merely spout theory. In addition, they are certain to stagnate professionally, within a time warp of management thinking that lacks the real touch of actual immersion in industry and/or business, even if they have some consulting experience. Unfortunately, in a milieu that stresses ‘settling down’ and ‘stability’, few among faculty will venture beyond safe and scenic campuses of academia to plunge into uncertainty and risk-taking, which is the essence of business management.

Comprehensive perspectives on how business works (strategy, marketing, finance, organisation design and behaviour, operations etc.) are necessary for future business leaders.  But as Dr Gautam Sinha, director of IIM Kashipur, Uttarakhand, observes: “Faculty internships are needed to bridge the gap between theory and practice.”

This is sage advice. India’s pace-setting IIMs in particular need to insist that all faculty should serve time as employees in for-profit business organisations, to learn how organisations survive from day to day and how managers deal with risk-taking and performance challenges constantly. Such shared experiences will infuse energy and authenticity in the dynamics of business management education, and produce industry managers ready to challenge their peers from competing countries in the global marketplace.