CHURUMURI POLL: Do B-schools have a problem?

Now in its 10th year, India’s top B-school, the Indian School of Business, is facing a serious crisis of credibility. Founded by some of the “best minds from the corporate and academic worlds“, and working in conjunction with such top B-schools such as Kellogg and Wharton, key personnel of ISB have figured in two very big scams.

First, its dean M. Rammohan Rao had to quit his exalted post ignomiously in 2009 after the Satyam scam. Reason: he was a director (in his individual capacity) on the board of the company. Another high functionary of ISB, Anil Kumar, too, had to follow suit. (A Harvard worthie, G. Krishna Palepu, was similarly embroiled.)

Now, Rajat Gupta, one of the co-founders of ISB, has had to resign or is on the verge of resigning, after being slammed with charges of insider-trading by American authorities, for giving illegal tips about Goldman Sachs Group Inc, based on information available to him as board member, to a scamster. He is now an accused under-trial.

To be fair, the individual indiscretions of ISB’s faculty or founders should not tar-brush an entire institution, especially for one which has consistently figured in the Financial Times ranking of the top business schools in the world. But is there a larger problem with B-schools that ISB seems to showcase?

As it is, many private business schools have had a well-earned reputation of being money-minting machines, with poor faculty, poor placement, bogus claims, etc. On top of that, if a school such as ISB reveals holes in its faculty’s clothes, does it point to a deeper malaise, on the pitfalls of having too close an interface with industry?

Also read: Is Yale turning India into a dynastic democracy?

Graduates of Indian Universities need not apply

Do they teach this at Harvard Business School?

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6 Responses to “CHURUMURI POLL: Do B-schools have a problem?”

  1. Nastika Says:

    Depends on what they bring to the table at the B-schools.

    If they bring their insider trading secrets, then it is.
    If they bring their organization expertise, then it isn’t.

  2. Abi Says:

    Just a quick note: The way you have mentioned Anil Kumar gives (what I think is) an incorrect impression that he was also involved in the Satyam scam.

    To my knowledge, his “leave of absence” from the ISB is related to the same hedge fund scam that has now snared Rajat Gupta.

    Anil Kumar has since pleaded guilty, and is likely to be a star witness for the prosecution.

    http://www.bloomberg.com/news/2011-03-04/galleon-trial-scorecard-rajaratnam-friends-colleagues-and-cooperators.html

  3. Mahesh Vijapurkar Says:

    I’d be less worried about IIMs and ISB but shudder about the quality of the mushroom business schools that charge a lot but give little save a scrap of paper called a degree or a diploma.

  4. Faldo Says:

    Like Mahesh says, if the institution can impart quality education, then credibility would not be a major problem. After all, the institution or knowledge gained is greater than any individual. In another day and age, some of the people who sponsored centers of excellence were also called robber-barons. Think Rockerfeller or Carnegie!

  5. Narayana Says:

    At least Krishna Palepu’s record is consistent. He was also taking care of corporate governance in Global Trust Bank before that went down.
    So at least he has a history that can not be explained away using business statistics or hypothesis testing which he probably is teaching kids in business school.

  6. karihaida Says:

    @Mahesh,
    agree.. the $500 bottle of wine is always better than the $5 one :)

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