Thursday, March 5, 2015

Business Strategy and Business Schools

This post is not about teaching business strategy in Business Schools. It is about an important question, should a B School require a business strategy? I think yes, one must have a business model; where to and how to make money and how to spend it.

What are the priorities and what are the larger or long term institutional objectives? What kind of an institution do we want to build and for whom? These questions are  explicitly addressed in the case of most formal organizations and there is an articulated strategic plan to realize the corporate aspirations for businesses.

What about a a business school? How do we compare and judge alternate strategic choices if we do not have a clear direction?

There are many, however who may feel upset that I am looking at a business school as a business. The hypocrisy is that we can teach business, but teaching business must not be called a business though it is always one. Mostly academics are the first to reject theory as impractical in their own organizations. Imagine discussing about vertical integration and rapid skimming for a business school and lifestyle segmentation of our customers who are our students. The perpetrator of such ideas may not be liked very much by colleagues.

Should a B school be profitable and how do we do this, what if it is in public sector?
These thoughts were prompted initially by IIM Indore's decision to go for backward integration and start under graduate programmes. Look at the initial furor it created. Many academics said this will dilute the quality of the institution. There are IITs who are better known for under graduate programmes. There are many reputed Universities in US whose quality has not gone down despite running much sought after under-grad programmes. Why should IIMs be exceptions?

After a few years, it is still early to judge whether this programme is successful in terms of acceptance of its graduates by the industry. But in terms of acceptance by potential applicants, it is a success. In terms of profitability, it is a huge success.

Once I worked in an institution where the management claimed that one can study from 'Playschool to PhD' with out leaving the campus. Would IIM Indore pursue this aspiration? They already have Doctoral and Masters. Now they are going upstream to under graduate programmes. Would they continue to have a school also, so that they can straddle the entire supply chain? Or should they  diversify to law, botany, mathematics, medicine etc. Will they remain a market nicher or will they try to be the cost leader or volume leader. 

I also wonder what hundreds of under graduate students and their parents will do to the IIM system. Imagine PTA, progress reports, parents crying on the inaugural day, Imagine the professor struggling to adopt to students in their early teens. It would be certainly an interesting experiment.

A few more years down the line,  I would love to read a case study on what strategic directions are served by this move.

This article is written by Professor Anand Unnithan. Prof. Anand Unnithan is an Associate Professor of Marketing in Indian Institute of Management Kozhikode and is a Visiting Associate Professor at School Of Management, Asian Institute of Technology, Thailand.

Follow him on Twitter @anandunnithan