'A Natural Experiment'

The Indian School of Business responds nimbly to the changes of a dynamic market.
A Natural Experiment

The Library in the Academic Centre at the Indian School of Business. (Photo courtesy of the Indian School of Business)

 

For the Indian School of Business, which opened its doors in Hyderabad in 2001, the goals are both straightforward and ambitious: to be a global institution with deep local ties, able to respond quickly to every nuance of a dynamic market. Its relative youth means the school has few legacy systems in place, allowing it to be nimble in the way it deploys faculty, responds to changing business trends, and adapts to institutional needs.

From the beginning, the school positioned itself in the postgraduate space, recruiting students with a certain level of experience. Today, it offers several tiers of programming: a basic residential Post Graduate Program (PGP) that is the equivalent of an MBA, where students usually have about five years of experience; an MBA for working professionals who have been in the workforce about ten years; and an EMBA, whose participants have, on average, 17 or 18 years in the workforce.

These older, experienced students tend to be savvy and somewhat demanding, asking tough questions and making sure professors don’t simply teach from the textbook, says dean Rajendra Srivastava. “The education space in India is changing quite quickly,” says Srivastava, noting that some top competitors are also adding programs for post-experience students. To carve out its own space, ISB must stay flexible and market-focused.

A LABORATORY FOR RESEARCH

To understand ISB’s place in its market, it is important to first look at India itself, says Srivastava, because the country is undergoing rapid changes. He points to its airline industry, which is growing at more than 18 percent each year; its GDP is increasing at about 7.3 percent. “The middle class is growing at about 15 percent,” he adds. “Companies have to take into account the opportunity costs of taking too long to make a decision.”

Meanwhile, the market is highly fragmented—not only are there upper-, middle-, and lower-income segments, but each segment might have high, medium, and low price positions as well. “This can result in eight or nine pricing and brand position levels.”

In addition, distribution systems are changing rapidly. “India has become something of a war zone between companies like Amazon and Walmart, which has just acquired the Indian company Flipkart,” says Srivastava. “At the same time, an Indian ride-share company called Ola has passed Uber in terms of market share and is now moving into Australia, southeastern Asia, and Canada. An entrepreneurial company called On Your Own, or OYO, provides management services to privately owned hotels, and it has become the largest hospitality company in India and the third largest in China in terms of rooms managed.”

Other factors make India a laboratory for conducting research, says Srivastava. For instance, he says, a “natural experiment” is occurring around brands, which are extremely popular in India. “About 20 years ago, there were only three or four automobile brands, but now there are more than 300 brands or models. If you want to study how brands gain or lose market share, if you want to compare competitive strategies or see how markets evolve, India is the place to be. External parties can come to ISB to gain insights into India, into growth markets, and into public policy that impacts commerce.”

In fact, the school encourages both faculty on staff and faculty visiting from other institutions to create case content uniquely suited to the Indian market. To this end, it invites outside faculty and executives-in-residence from corporate partners to come to its Centre for Learning in Management Practice (CLMP) to conduct their own research in collaboration with ISB faculty and graduate students. CLMP creates connections with other research centers and institutes at ISB in areas such as healthcare, digital transformation, and public policy; the institute also arranges for housing, most often on ISB’s campuses in Hyderabad and Mohali, and transportation.

“We want to create new content, because a lot of the existing cases don’t apply to emerging markets, particularly markets where governments have a huge say,” Srivastava explains. “For example, one of the world’s largest employers is Indian Railways. It takes permission from parliament to change the lower-end price and service structure of the Railways. You don’t have situations like that in the West.”

It’s also essential that the school maintain relationships with governmental and industry partners, and these relationships can pay off in a big way. As an example, not long ago the school hosted an offsite event for the National Institution for Transforming India. Present were high-ranking government officials in charge of healthcare, transportation, and monetary policy. Srivastava was granted 45 minutes of their time to make a presentation about ISB, and three concrete projects have emerged as a result.

Says Srivastava, “We are trying to use our research centers and institutes as platforms to enable dialogue between the government and the corporate sector, through activities such as roundtables and workshops.” Such dialogue, he emphasizes, benefits India’s society as much as it benefits the school.

AN ADAPTABLE INSTITUTION

In addition to reacting quickly to the needs of the market, ISB remains flexible in other ways—particularly in its administrative functions. Srivastava meets monthly with a dean’s council and with his department heads to discuss issues and make key decisions.

“When the faculty requests something, we are often able to approve it the same week,” he says. The school can also move quickly to make major changes to the curriculum. “For example, we launched a DBA program within a semester. In the U.S., it would have taken two or three years to get it off the ground.” He credits the flexibility to a lack of entrenched committees that create barriers to change.

Adaptability and openness allow the school to keep its offerings current and relevant, says Srivastava, which makes its students attractive to employers. For instance, 98.5 percent of the 884 MBAs who graduated in April already had secured jobs by graduation.

But that flexibility also manifests in another critical way: faculty deployment. Because the school aims to be globally competitive, it follows the tenure system and requires tenure-track professors to publish in peer-reviewed journals. “But we have a very young faculty,” adds Srivastava. “Eighty to 85 percent do not have tenure, so they’re not set in their ways.”

Other components of ISB’s faculty system are more unconventional. All faculty have two affiliations—one with a discipline, and one with a research center. Srivastava calls this a nine-plus-three model, where nine months of salary and engagement come from the discipline affiliation and three months from the research centers and institutes.

“I’m a faculty member in marketing, and my research affiliation is with the Centre for Innovation and Entrepreneurship,” says Srivastava. “Someone else might be a professor in operations management with an affiliation with the Max Institute for Healthcare Management. Our logic is that you need the discipline to create frameworks and structures, but you need a domain to test out your hypotheses.”

At the same time, ISB encourages its faculty to develop close ties to outside stakeholders by spending time in corporate or government immersions. These immersions, which generally last a week or more, allow faculty to gain a richer understanding of the challenges and opportunities these organizations are facing. Meanwhile, about 30 percent of ISB’s faculty consists of practice or clinical faculty—and some of them, like the former head of Accenture India and the former head of Nestlé Global, are senior figures with a great deal of practical knowledge. As Srivastava points out, “A student in our executive MBA program who has 20 years of experience is not going to benefit that much from an assistant professor who just earned his PhD and has limited or no work experience. But if we couple that professor with clinical faculty from industry, it’s a learning experience for everybody.”

The school is still figuring out exactly how to deploy clinicians—or “pracademics”—in ways that best complement research-track professors. “One way we make that connection is by creating thematic research initiatives or clusters,” says Srivastava. “For example, when we look at healthcare as a domain, it includes people from marketing, operations, and strategy working together. Another example is the area of mergers and acquisitions, which requires people with expertise in strategy, valuation, finance, and marketing—and also organizational behavior, because there are significant HR challenges when one company absorbs another.”

It’s essential that faculty from different disciplines, and different tracks, work together, he adds. “Unless some interaction takes place, the learning opportunity is lost.”

CHALLENGES TO TACKLE

Despite the advantages that ISB enjoys as a newer business school, its age also presents certain challenges, says Srivastava. For instance, while he is enthusiastic about assembling multidisciplinary research teams, those teams don’t have a lot of publishing options. “That’s holding our faculty back,” says Srivastava. “We’re a young school, and we aren’t ready to launch a multidisciplinary journal, but something needs to be done.”

Even so, Srivastava believes ISB is showing the rest of the world what’s possible. “We might be struggling with the multidisciplinary research, but at least we’re taking a crack at it. And I think older schools could learn from watching what we’re trying to do. Either our success or our failure could prove useful as a lesson.”

This article originally appeared in BizEd's July/August 2019 issue. Please send questions, comments, or letters to the editor to bized.editors@aacsb.edu.




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