Centre can consider corporatising the IIMs

Written by YRK Reddy | Updated: Jan 21 2006, 06:15am hrs
If the previous governments move against the hike in fee was lambasted as being hawkish, intrusive and much more, the stand of the current government on IIM Bangalores move for an offshore facility has met a similar fate. The apparent common factor is the short-sightedness of the mandarins, even if they may have graduated from renowned schools of economics, management, medicine and engineering. A more curious common factor is that the IIMs are involved and such controversies between ministries and public bodies have not arisen in respect of the large number of defence establishments, research organisations, universities, and even the listed corporationssave the ONGC lately.

We professors had been teaching executives, senior IAS officers and MBA students on managing change; the art and science of reasoning, negotiating and convincing; managing and influencing impeding forces; effectively engaging diverse stakeholders; managing and cementing relationships; aligning values, tactics, and strategies with organisational vision and purpose; staying focused and capturing the domestic market first and the like. Arising from Rajiv Gandhis initiative, we had been putting together programmes for ministers, parliamentarians and legislators on management aspects and public policy. Yet, in both instances, there is much floundering in managing boundaries, influencing policy-makers and strengthening relationshipsthis may soon tell on the credibility of management education itself.

Management professors must ask how Dr APJ Abdul Kalam, Dr MS Swaminathan and Dr RA Mashelkar have led scientific missions and the strategies of sensitive organisations, much dependent on the same bureaucrazy. Maybe some former directors of the IITs or those who headed ICAR, CSIR, CCMB, et al., have also experiences to share in managing strategies without straining relationships or rushing to the public. Even corporate leaders on the governing boards of management institutes manage relationships with the policy-makers strikingly well.

We also teach executives and civil servants the importance of sequencing activities, bench-marking, and overcoming constrainsthe institutes seem to have failed in all these three aspects. First, it now transpires that IIM-Bs announcement of its foreign foray was ahead of even amending the articles of associationand as the minister revealed, the decision was taken without the full involvement of the critical stakeholder.

The IIMs have failed in sequencing activities and in bench-marking
Most American, European universities elsewhere are not state-sponsored
IIMs could have formed a Special Purpose Vehicle with minimal capital
Second, in respect of benchmarking, it will be clear that a majority of American or European universities operating in other locations are not government sponsored. While private universities and schools such as Harvard, Kellogg, Wharton, LBS may be active internationally, state universities have a limited remitand, at the most, have marketing outfits or joint research in other countries. Examples such as the National University of Singapore are an exception. If a BITS, SP Jain, XLRI or Amity goes to other countries, it should not necessarily set the standards for state sponsored bodies.

Third, we teach executives and civil servants to think out-of-the-box when confronted with constraints or competing objectives. Maybe such thinking would have led all IIMs to form a separate entity (a Special Purpose Vehicle) called IIM International Pvt Ltd, with minimal capital and in collaboration with the faculty/alumni associationand without diffusing the stated vision or focus, or challenging their raison detre.

The executive and Parliament often exercise undue control in the name of public duty and accountability. History tells us that unlike common predators, they arent easily scared by drumbeats or passing gales. Hence, the tension between control and autonomy cannot be resolved satisfactorily between the governing and the governed. It is the reason for advocating privatisation of not only corporations, but all publicly sponsored and supported bodies.

The rancour created by the two controversies should provoke the Centre to consider corporatising these institutes through legislative action in consultation with the respective states, as has been done in some countries including the UK, and then privatise. That would be a Pareto optimal solution, generating huge amounts both for the Central and state governments owing to the brand, as well as land.It will also set all of them totally free to benefit from market opportunities.