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Tuesday, June 05, 2007

Do the IIMs need to build brand equity abroad?

When the Indian Institute of Management Bangalore, IIM-B, decided to open a campus in Singapore, the Union human resources ministry vetoed the idea because they said, it didn't adhere to government norms but now they have relented somewhat, and say that IIMs can go abroad, but first they should cater to domestic demand, which they have not done properly so far. So, are the HRD ministry's concerns valid?

Sunil Alagh, who is on the board of IIM-B wants to clear the air. He told CNBC-TV18, "The very first day it was decided, we should do this and make a case to the government, get their permission and then go forward. So the misconception that there was any question of going ahead without government approval, should be removed instantly."

"We are not asking the government for extra funds. If anything, we will create income. Once the income comes in, then institutes like IIM-Bangalore will have less reliance on the government and the government can use the same money to create more IIMs."

Alagh honestly doesn't see what the conflict is all about. As he says, IIM-Bangalore cannot create IIM-Kanpur, that's what the government has to do. But what IIM-B can do is expand its own campus abroad, which is what it is seeking to do.

He explains, "The need of the hour is to establish a brand name with authority. If you want to be part of the global system, if you have the stamp of IIM outside - even if it is a 3 or a 4 month course - you are only adding to the brand equity."

Number of seats per institute

IIM Ahmedabad - 250
IIM-Bangalore - 260
IIM-Calcutta - 300
IIM-Lucknow - 300
IIM-Kozhikode- 180
IIM-Kanpur - 180


Commenting on the issue, Professor at IIT, Kanpur, Pankaj Jalote says that most of these institutes are stuck in the 1980s scenario, where demand for MBAs was low and what IIMs/IITs were producing, was not getting used. At the IITs, he says, it took them 20 years to double the output. He feels these institutes should play a more active role.

He explains, "Playing an active role does not mean that you start opening new campuses in Kanpur or wherever, but upgrading the education that is being imparted." So he feels that the IIMs have not catered to domestic demand.

He adds, "It is not just about increasing seats. We are the leaders in these fields and we should lead the people and not just create more capacity for students. There is point that one can do both, but looking at the faculty here (in Kanpur), I know that we are so stretched in various ways - so one can go to the US or to Singapore and expand in India also, but by and large, I think your bandwidth is limited."

Alagh elaborates and says that what has been overlooked is that, the MBA course offered abroad will be a short-term course and not a 2 years course, like in the Indian IIMs. And he says that they won't be stretched for staff and teaching resources because not the entire staff of the Bangalore IIM will be sent to Singapore, but only one or two professors will be sent to get the campus going, while the rest of the teaching could be done by Chinese or Malaysian professors.

He concludes, "It is not like you are taking the staff from India and opening a branch. So for to say that, we must not export until we meet domestic demand completely is being very myopic. I completely agree that we need to expand the Indian scene, or else how else can IIM Bangalore expand? They can only do that by taking more students in Bangalore but cannot create an IIM-Bangalore brand anywhere else."

Written for www.moneycontrol.com

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