Privatising the IIMs – Economic Times

Is this what is in store for all National Institutes in the country? Makes very interesting reading in the light of the Government’s announcements on the setting up of four new NIDs.  Read original article in The Economic Times here.

Privatising the IIMs

, Mar 25, 2011, 08.09am IST

By Prodip Kumar Sett, Professor, IIM-Calcutta

Behind the public view and without any public debate, the Union HRD minister is trying to reshape the public institutional character of IIMs. In a recent meeting with chairpersons and directors of IIMs, he took a series of inter-linked decisions which, if implemented, would effectively transfer the control of these institutions to private donors. These decisions are ostensibly aimed at ‘shaping up’ the IIMs to meet the competitive challenges from foreign players once the sector is opened up. They are based on the reports of three committees that the minister constituted in early 2010.

Intriguingly, all the three committees comprised existing chairpersons or directors of various IIMs who themselves were appointed by the minister. They had no representatives from the academia, industry bodies or the civil society. None of these committees held any consultation with major stakeholders: IIM faculty, the industry or the alumni. Neither did they collect any ground data, or record the views of past chairpersons /directors of IIMs or eminent educationists to substantiate their findings. Yet, interestingly, the three reports converge to support the virtual privatisation of IIMs by altering the basic structure of their existing memorandum of association (MoA).

Report of the committee on new governance structure sets the stage by proposing that the society of each IIM should be reconstituted so that it can run the institute as an “enlightened owner” (equivalent to a person having an equity stake in the company) and by suggesting that “the most effective way of bringing this about is by making the payment of a substantial donation to the IIM as a condition for becoming a member of the society.” The reconstituted society would exercise all powers and ratify the appointments of the chairman and members of the board of governors (BoG) as also the director of the institute. The BoG would manage the institute on behalf of the society and the director should function as the chief executive officer (CEO).”

As regards the composition of the BoG, the report states: “The practice of board members representing different interests should be given up.” Obviously, implementing these changes would require some major changes in the existing MoAs of the IIMs. The committee, however, provides no justification how the recommended dispensation (payment of donations) make the reconstituted societies more ‘enlightened’ than the existing ones. The fallacious nature of its argument is quite obvious.

The argument can be turned on its head by contending that such an “equity stake” is more likely to lead to commercialisation of IIMs and destroy their public character and role. Similarly, changing the multiple stakeholder representational character of the BoG suggested by the committee is downright objectionable as it strikes at the very root of the concept of public institution. The second committee on faculty and research deals with a number of issues: meeting faculty shortages; use of technology to leverage faculty resources, faculty productivity, etc.

Most of the recommendations are in the nature of subjective views without any cogent argument or supporting data; some are misconceived. For example, the report suggests introduction of a system of annual work plan which is to be prepared by every faculty member at the beginning of an academic year based on a set of standard yardsticks (irrespective of his/her aptitude or academic interests) and submitted to the BoG for approval.

At the end of the year, the BoG would review the plan’s actual performance. IIMs already have peer reviewed faculty performance appraisal systems. What is new in the committee’s proposal is that the academic work of the faculty is to be submitted for review to the BoG, a nonacademic body having no competence. Nowhere in the world non-academics sit in judgement over academic work of the faculty. However, in the committee’s own words such an “external review” is necessary “as a control system”.

This reflects an efficiency oriented corporate mindset that pervades the whole report. It seeks to treat the faculty as ’employees’ who need to be controlled for attaining ‘optimum performance’ This is totally repugnant to the idea of academic freedom necessary for any institution of higher learning. Ill-effects of such corporatisation of higher education elsewhere in the world are well documented; they are also very much visible among the private educational institutions in India.

Such corporatisation affects not only the academic culture of the campus but also the very content of curriculum, which increasingly tends to get commoditised through efficiency seeking standardisation. Thus, the idea put forward by the committee to model the IIMs on the lines of a business firm is completely misconceived. The third committee suggests measures for fund-raising by the IIMs on the lines of the US business schools. These recommendations are nothing wrong in themselves; but they sound ominous when read in the context of other two reports.

The shared mental model that underlies the three reports as also the decisions of the HRD minister is as follows: hand over the control of IIMs to private donors (Rs 20 crore for corporate and Rs 5 crore or less for individuals) and allow them to run the institutes ‘efficiently’ as ‘enlightened owners’. It suits the government, as it is relieved of the fiscal burden of running the new IIMs (older IIMs have become financially self-sufficient more than a decade back) and it also suits the ‘enlightened owners’ as they ‘own’ the prestigious IIM brand at a ridiculously low price and are granted the licence to run the IIMs in their best ‘enlightened’ interests. The public at large only has to stand and watch the demise of a great icon of modern India — if the HRD minister has his way.

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About korjan

Partner, Studio Korjan & Independent Design Educator. Believes that complex problems could have design solutions.

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