Global B-School rankings: Good news! And then some

Business school fraternities across India should be proud of the recent development in the MBA world. One of the best Indian B schools, ISB, Hyderabad, a path breaker in several ways has made it to the top 20 ranks among global B schools.Read the rankings here.

This development should add more shimmer to the 'India Inc shining' picture. Global investors are progressively looking at emerging markets for better returns. If experts are to be believed,the sole hope over the next year (with imminent US recession), lies in BRIC and other emerging markets, the only ones that can deliver least 18% returns. This, combined with the fact that an Indian B school has been ranked with the top league should make prospective international students think whether studying in an Indian B school and spending a part of their career in Asia is the way to go. The relative cost of education is low and opportunities aplenty.

ISB ought to be in the top schools list for several reasons, despite being young- the program structure, the composition of visiting international faculty, the corporate backing the school has, international alliances, the placement percentage (100%), and not in the least, the five-star facilities in the campus.

The article in The Times of India, read here, has quoted the methodology of computing the remuneration figure. Apparently, the average salary of $169,000 was arrived at by using Purchasing Power Parity (PPP). Now, the PPP between INR and USD is between 6 and 8, for such purposes as calculating remuneration and, well, spending power. This means that at ISB, the average Indian Salary is between INR 10.5 Lakhs and INR 13.52 Lakhs using the limits of PPP.

In general, however, the average salary is mostly misleading, for any school. This is because,by nature of average, a few distinguished top grossers will even out (or skew?) the impact of the many more at the lower end of remuneration scale. Median ought to be more representative but again may not comprehensive. But hey, all schools use the same logic, so we are on level ground here.Are we really, if we use PPP? Because, back home, when top schools report highest-salaries, they convert an international 'USD package' in INR by simply using the forex conversion rate, thereby launching the package into unbelievable stellar heights. That's another story altogether.

In any case, using average ,the numbers in other top Indian B-schools would be in similar range viz.IIMs- A, B and C, FMS, XLRI, SPJIMS. Barring IIM-B and FMS, other schools have a new 'international' one year program. The PGPX program at IIM-A and PGPEX at IIM-C for 'students with substantial experience' have reported 'average' INR 25 Lakhs and INR 20 Lakhs respectively. In terms of PPP, this will translate to an average minimum of USD 315,000 and USD 250,000 using a PPP of 8 (Obviously, 30% higher using 6). Like other aforementioned schools, IIM-A and IIM-C have a legacy of about 40 years and a wide international acceptance of their students and do not lack anything; except a five-star living, perhaps. So, why are these schools not in the list? Did they not participate?

This makes me wonder that in these schools, the people who teach marketing to the people who eventually run the businesses of the world ought to know better.So, why are they not telling? In fact, back home, in the more popular 'BusinessWorld' rankings, IIM-A and IIM-B have been only intermittently participating for the last 3 years.Most ranking sheets, nowadays,in India are based on student responses rather than statistics provided by schools and rarely, if any, by industry.

At the end of the day, the bottom line of any business school is as important as the lessons on bottom line they teach their students. ISB's marketing has left no holds barred. An example is the fact that even I, a prospective student of the past, have received an email from the dean of ISB about this successful ranking.

Nevertheless, with this success of ISB, the top B schools of the world will wake up to the challenge of Indian B schools. Congrats ISB!

Update: Read Rashmi Bansal's view point here. Something I noticed: Ms.Bansal's research has used PPP in a forward-count. This post used a backward-count. Hence, a small difference.

Further update: The reason that the other B Schools mentioned herein do not yet qualify at that level is the fact that in their programs, students with zero experience are also included. Programs exclusively for experienced students have not been running for 3 years.

Find PPP Conversion tables here