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Transforming business education in Pakistan

April 05, 2012

Number of institutes offering business degrees. Source: AACSB International.
The business education landscape is about to change in Pakistan. The decades-old dominance of leading biz schools will soon be challenged by the Karachi School for Business and Leadership (KSBL), which is about to launch an MBA in collaboration with the Judge Business School at Cambridge University.

For years, the Institute of Business Administration in Karachi and the Lahore University of Management Sciences had a near monopoly on talent in business education in Pakistan. The two prestigious schools attracted the best faculty in management sciences, which in turn attracted the best and the brightest students seeking business and management education. This duopoly will soon face competition from KSBL, which is a $100-million initiative championed by Hussain Dawood, a renowned Pakistani businessman and a philanthropist. KSBL is now accepting applications for MBA starting in September 2012.

While being a 100-year old professional designation, MBA continues to be desired by hundreds of thousands of aspiring business managers. The first graduate business school was established at Harvard University in 1908. The school was staffed by 15 faculty members and 33 regular students. By 2008, no fewer than 155,367 students graduated with a master’s degree in business administration in the United States alone.

Another 335,000 received a bachelor’s degree in the same discipline. Business schools have become the largest faculty by size on campuses across North America. The Ted Rogers School of Management at Ryerson University in Toronto is one of the largest business schools in Canada with over 9,000 students. In the US alone, three bachelor’s degrees are awarded in business administration for every one degree conferred in engineering

Despite its popularity from the very beginning in 1908, the MBA designation took 42 years to extend its reach beyond the US. The Richard Ivey School of Business at the University of Western Ontario in Canada in 1950 became the first non-American university to offer an MBA.   It took another seven years for the MBA to sail across the Atlantic to reach Europe where INSEAD near Paris became the first European school to offer an MBA designation.

AACSB, a group responsible for accrediting business schools, today boasts 1,182 schools as its members of which 607 schools have already been accredited. AACSB’s estimates reveal that around 12,100 educational institutions worldwide are offering business degrees. Approximately 82 institutes have been reported to offer business degrees in Pakistan. As expected, only a small number of Pakistan-based institutes offer high quality business curriculum and training. The rest comprise business schools that lack libraries, computing faculties, lecture halls and most importantly adequate faculty members. A quick look at the websites of business schools in Pakistan will reveal that most faculty members do not have a terminal degree in their field and more often than not faculty members lack training in disciplines related to management and business.

Source: Wolfram Alpha (http://www.wolframalpha.com/)

Unlike Pakistan, where only two business schools achieved prominence, several business schools in India achieved global fame. The most renowned of such schools is the Indian Business School, which has partnered with other leading business schools in the west. Also recognised globally are the Indian Schools of Management who have become a gold standard for business education in India and abroad. Apart from the dozen-odd famous business schools, another 1,600 institutions offer business education in India.

Another success story from India is the large contingent of Indian-born academics who have risen to prominence in North America and Europe. In fact, the current dean of the Harvard Business School is an Indian-born academic Nitin Nohria, who is now leading the transformation of the same school that pioneered the MBA pedagogy.

Earlier this month, I attended a two-day symposium about transforming the MBA curriculum in Tampa, Florida. The symposium was led by two Harvard Business School professors: Srikant Datar and David Garvin. Srikant, also an Indian-born academic, has co-authored a book with David Garvin on rethinking the MBA curriculum. Their book is influencing academics in business schools that are entrusted in transforming the business curriculum to meet the societal needs.

The business education in Pakistan continues to be offered in the same style and with almost the same contents as is being offered in the west. This results in a serious disconnect between the challenges faced by businesses in Pakistan and the training being provided. Teaching the same curriculum as is being taught in the west may prepare graduates of Pakistan’s business programs to meet the business needs in the west, however these students remain ill-equipped to help businesses succeed in Pakistan.

The courses in financial derivatives offered in Pakistan, for instance, teach largely the same curriculum as is being taught at the business schools in Chicago and Montreal, the two cities with large derivatives exchanges in North America. At the same time, Pakistan is a large producer of cotton and hence Pakistan-based curricula should focus on finding innovative market solutions to make cotton crops resilient to floods and crop diseases rather than focussing on cotton futures. And while the business schools in the west research and teach about high performance manufacturing, the business schools in Pakistan instead should focus on sustaining production in a resource-constrained economy where manufacturing units are being shut down at an alarming rate because of intermittent supply of electricity and chronic fuel shortages.

Notice in the following graph how India excelled in export intensity (measured as export dollars per capita) in the past few years while Pakistani businesses struggled against all odds including, but not limited to, infrastructure deficit, security concerns, poor governance and regulation, and lack of entrepreneurship.

Another big challenge in Pakistan is the lack of entrepreneurial culture. University graduates spend enormous time searching for employment in a job market where the private sector is collapsing while the public sector continues to absorb hoards of unemployed youth in state-owned corporations who have long become a huge burden on taxpayers for their lack of competitiveness, which has forced many such institutions effectively into default. The unemployed or partially employed in Pakistan instead could focus on creating small enterprises to offer goods and services needed by the low-income consumers whose numbers in Pakistan run into hundreds of millions.

There is indeed fortune lying at the bottom of the pyramid. C. K. Prahalad, a renowned business professor who was born in Coimbatore, Tamil Nadu, made this point in his book, The fortune at the bottom of the pyramid. He wrote: “Collectively, the world's 5 billion poor have vast untapped buying power. They represent enormous potential for companies who learn how to serve this market by providing the poor with what they need. This creates a win-win situation: not only do corporations tap into a vibrant market, but by treating the poor as consumers they are no longer treated with indignity; they become empowered customers.”

I would argue that one needs not to rely solely on corporations to serve the needs of those at the bottom of the pyramid. In the presence of an enterprising culture, the untapped value can be captured by the young indigenous entrepreneurs who are intimately aware of the constraints and opportunities that lie in a resource-constrained market place as the one existing in Pakistan. There is therefore a need to educate the youth about entrepreneurship and value creation.

This presents a unique and hitherto unexplored opportunity for business schools in Pakistan. Instead of replicating what is being taught at the Harvard Business School or its imitations and enlisting faculty who may not have a first-hand experience of bathing with only a bucket full of water, the business schools may consider tapping into the local talent by recruiting successful indigenous business leaders to teach the future generations of entrepreneurs about how they managed to succeed in the inhospitable business climate in Pakistan.

I believe that the students in Pakistan would benefit more from listening to Pakistani entrepreneurs, such as Hussain Dawood, who have run successful businesses in Pakistan, than from foreign-based academics who at best would have a 30,000-feet view of those who lie at the bottom of Pakistan’s pyramid.

Murtaza Haider, Ph.D. is the Associate Dean of research and graduate programs at the Ted Rogers School of Management at Ryerson University in Toronto.  He can be reached by email at murtaza.haider@ryerson.ca

The views expressed by this blogger and in the following reader comments do not necessarily reflect the views and policies of the Dawn Media Group.