At India’s Top Business School, The Jobs Are Plentiful & The Students Satisfied

A student in a class at the Indian School of Business

Only 13 years old, the Indian School of Business has become the leading business school in India. It’s only by some methodological sleight of hand that India’s Indian Institute of Management in Ahmedabad is ranked slightly higher by The Financial Times, currently ranking 30th vs. ISB’s 36th place finish. The PGPX program that gains IIM its better ranking is composed of only 85 graduating students a year who as mid-level executives average six more years of work experience than ISB students. The FT is thus ranking not the quality of the school or its students, but rather the fact that IIM alums are higher paid because they are older and more experienced.

Rangneskar doesn’t cry foul. After all, his school is among the youngest institutions to be ranked among the top global MBA programs by The Financial Times. ISB made its debut, no less, at a rank of 20th in 2008, thanks partly to a purchasing power parity formula used by the FT that artificially inflates the salaries of its grads. A year later, moreover, the influential British newspaper ranked the school 12th in the world.

 ‘I COULDN’T TELL YOU WHY WE WERE RANKED 20TH OR 12TH’

“I couldn’t tell you why we were 20th and I can’t tell you why we were 12th,” laughs Rangneskar. “I have no control over it, and I can’t understand it.” He acknowledges that one mistake he made was to not go public with his opinion when the school made its first appearance in the FT ranking. ISB’s slide to its 36th place ranking is largely because of a plunge in Indian currency against the U.S. dollar which is used by the FT to measure salaries.

Regardless, the ranking has helped to put the school on the map. In a typical year, 4,100 applicants will vie for what is now 774 seats on two campuses in Hyderabad and Mohali. The school’s yield—the percentage of admitted applicants who enroll—edges slightly above 85%, a rate that is just below Harvard Business School and Stanford Graduate School of Business, both of which are closer to 90%.

The school has thrived while hundreds of management schools in India, hastily launched to take advantage of a boom in business education, have been driven from business. Some estimate that as many as 1,000 of some 4,000 business schools have shuttered their doors. “I hope more schools at the bottom close down,” says Dean Rangneskar. “It’s a moral hazard.” He believes there are no more than 50 graduate schools of business that can lay claim to quality and only 10 to 15 that get the top corporate recruiters.

 PROFESSORS PRAISE THE QUALITY OF THE STUDENT BODY

ISB, which took in its first class of 126 students in 2001, has been able to draw upon the vast numbers of exceptionally talented and test-trained young people in India to post unusually high raw stats right out of the gate. The average GMAT of the entire applicant pool is 690, while the average for the latest entering class is a hefty 714. Yet, in a country obsessed with both exams and grades, the school is trying to get the message out that GMAT scores are not as important as applicants think (see The MBA Gatekeeper At The Indian School of Business).

Professors say the quality of the students is nothing less than superb. “You typically teach to the middle, given the variance of student ability in a classroom,” says Arun Pereira, who has won the teacher of the year award for the past two years. “As a teacher you want minimal variance because it is always a challenge to keep everyone engaged. Here, the variance is minimal. It’s a tight band. The students are highly intelligent and highly intense. They get bored very easily, but once you excite them, you are off to the races.”

What has allowed a relatively new school to ramp-up so quickly and maintain high quality is also ironically one of ISB’s main drawbacks. It is a school that wants to be global, but is for all intents and purposes less global than most U.S. schools. Diversity is a true challenge. Most of the students here are quants: male with backgrounds in engineering. Poets are scarce. And only a handful of the 774 students are from outside India, often from the Middle East.