As mentioned in my last column, today I will write more about the ugly side of our business schools—the unethical practices they are involved in.
In my earlier articles, I have written about misleading advertisements, how some “edu-preneurs” siphon off funds from the institute illegally, how B-schools cheat business executives doing part-time courses and the corruption in admissions and ranking surveys.
One reason for such practices is archaic laws that do not allow for-profit B-schools to operate. Then there are the stringent rules of the All India Council for Technical Education (AICTE) and its corrupt officials who also guide these institutes to beat the system. There are also some “edu-preneurs” who are always on the lookout for short cuts to make money and build their brand. In some government-run B-schools, too, there is systematic corruption and it’s not just limited to financial irregularities by directors, some of whom have been sacked for the same.
One under-reported scam is about admissions in university departments. Our education system has not only denied quality primary education for a majority of Dalits, but some university officials are even making money by illegally selling seats reserved for Dalits in higher education. The seats are usually sold to general category students who score less marks in graduation to qualify for admission in good B-schools. Since the cut-off percentages are very low for reserved category students, university officials manage fake caste certificates for general category students in connivance with village-level officials. Such a scam was unearthed last year in Karnataka.
Irregularities in admissions are also common in many private B-schools where the percentage of back-door entries vary from 20% to 40%. Some of them are known for auctioning their management-quota or corporate-sponsored seats. In one such school in New Delhi, some governing board members are known to guarantee everything from admission to a good placement for a hefty under-the-table fee.
A business school faculty member told me how he was surprised to find the wards of many local policemen in a well-known B-school in New Delhi where he was employed. Later, he found that the chief executive of the B-school, who was also a builder, had several connections with the local police. Some such students had not even appeared in the qualifying exam for admissions.
While some good AICTE-approved B-schools had to pay heavy penalty to the council for giving admission to a few students beyond the sanctioned limit, some B-schools have an entire section of about 60 students illegally admitted beyond the sanctioned limit. Of course, this is in connivance with AICTE staff.
The corruption extends to even the human resource department of some companies. The rate of payments for placing students varies depending on the job profile as a former director of a lower rung B-school told me.
Faculty selection is another important process that has been compromised in many B-schools. Some are unwilling to spend on good faculty and opt for visiting faculty or hire those with doubtful academic credentials. Some even hire their own students immediately after completing the course. Such faculty is often incompetent to teach. All this is done to generate higher surplus which is siphoned off in various ways as, on paper, the trust or society that runs B-schools can’t show a profit. In the process, students are deprived of good quality of education.
To improve their brand, some B-schools not only go for misleading advertisements but also fudge data in ranking surveys. A few days back I was at a well-known B-school in Mysore as part of the annual B-school survey we conduct. Like many Indian B-schools, they had invested heavily in infrastructure but neglected faculty development, which was quite apparent. What intrigued me was the placement figures the officials there gave us. They claimed the maximum salary their student got in the last placement season was Rs30 lakh for an Indian job. This figure for a second-rung B-school looked out of place. They even had as evidence an offer letter from the recruiter, who turned out to be a jewellery shop in Noida. Most likely the student is related to the shop owner and the letter was procured by the enthusiastic placement cell to get a better rank in surveys. They also stretched the truth about the permanent faculty figure as I came to know from our validation team report.
The incident saddened me as this school belonged to a respected religious trust. Perhaps the board of trustees is not even aware of the activities of the persons responsible for running the institute. Instead of striving to improve the processes at the institute, those who manage it look for unethical means to get undeserved recognition.
Unethical practices have corroded the education delivery in many of our B-schools. Perhaps that’s the reason, as some studies have indicated, about 75% of students graduating from many professional college are unemployable.
Premchand Palety is director of Centre for Forecasting and Research (C fore) in New Delhi, from where he keeps a close eye on India’s business schools. C fore conducts surveys for Mint, and a business school survey is planned for August. Comments are welcome at businesscase@livemint.com