B-schools and entrepreneurship

Entrepreneurship is becoming a popular career choice these days among aspirants and in an endeavour to cater to this growing demand, many institutions are making ‘entrepreneurship education’ a part of their curriculum. ET HighFlier discusses the unique ways business schools are adopting to support students who have a penchant towards creating something new.

MENTORING ENTREPRENEURS:

Karam Lakshman, program manager - iAccelerator, IIMAhmedabad believes that entrepreneurship education seeks to provide students with the knowledge, skills and motivation required to encourage entrepreneurial success and lay down the conditions and solutions to the challenges that one might foresee in a venture. “Business is the backbone of a country’s economy and entrepreneurship is a tremendous force that has a huge impact on facilitating growth, recovery and societal progress. It results in innovation, employment generation and social empowerment. In India, entrepreneurship education is gradually picking up. That said, it needs to scale up further to make everyone involved – promoter, investor, parents, employees, etc - more aware about the different aspects,” he expresses.

“The time is right for the educated managers to stop looking for jobs and start providing them to others. Forming the right team is one of the challenges that an entrepreneur faces and if a person is starting early while he/she is in college, they will find the right kind of people amongst their friends, who they can work with easily,” he asserts.

“Students work on their own business plan as part of a project. The students get an opportunity to do projects with the incubates. This helps them achieve a handson experience of working with a start-up .” Lakshman adds.

Lakshman further says, “We will soon be competing with the best in the world if you compare statistics on number of start-ups, funding, etc. Entrepreneurs who don’t know how to go about it, here’s a pearl of wisdom: An entrepreneurial journey is like travelling through a thin fog when there is no wind. Start walking and it will keep getting clearer ahead. If you try and wait to get a complete picture from the start itself , you will keep waiting. Just take the first step and keep walking.”

GROOMING ENTREPRENEURS:

According to Dr Harsh Mishra, associate professor, strategic management , Management Development Institute (MDI), Gurgaon, there is a need for B-schools to have entrepreneurship focused courses and programs. “Before even experiencing the status quo as an employee, formal education in entrepreneurship makes a case for early intervention by exposing students to successful stories, the underlying rationale or theory as well as the science and mechanism for tapping and developing their entrepreneurial instincts,” says Mishra.

Many organisations offers fullcredit courses in entrepreneurship and are also establishing a business incubator that could provide the opportunity to several new entrepreneurs to germinate their ideas into a business enterprise. According to Mishra, courses and programs on entrepreneurship are often interdisciplinary and an MBA program with entrepreneurial focus encourages students to crystallise, test, self-critique and gain confidence in their own ideas to move forward.

Many experts feel that B-schools must encourage entrepreneurship, but a student before opting for such courses, must analyse his/her own personal entrepreneurial capacity. Before starting up a venture, one must evaluate their entrepreneurial idea to meet the existing market need or a new emerging market demand, become aware of the legalities involved and various support systems in the eco-system for entrepreneurship and must not be obsessed with the desired financial outcome.

NURTURING ENTREPRENEURS:

Prof S Sadagopan, director, IIITBangalore feels that knowledge and wealth creation are equally important . He is of the belief that Bschools must encourage entrepreneurship , period. “We promote both, a formal as well as an informal program. Within 10 years of existence, we have incubated four successful companies. Currently, we are incubating five companies. The proof of the pudding is in eating; more than 20 of our alumni are pursuing new ventures currently,” he shares. Talking about the future of this rising trend of entrepreneurship education, Sadagopan says, “It is clear. Indian techies will increasingly look at e-option ! The eco-system is taking shape. My advice to entrepreneurs is to get into the ‘network’ and benefit from the huge advantage.”

Starting one’s own venture is never an easy task but a formal training could teach a person the nuances of the journey. That is why entrepreneurship education is gaining such momentum in recent times.

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NITIE Placements 2010

Mumbai-based National Institute of Industrial Engineering (NITIE) has registered the highest domestic pay package of Rs 19.5 lakh a year and highest international pay package of Rs 67.5 lakh a year during its final placements.

The international placements were offered by companies like Olam International and Dubai Telecom. 

Around 90 companies participated in the placement process, offering roles in domains like supply chain, operations, marketing, finance, consulting and information technology (IT) & systems. 

Companies like Procter & Gamble, Cadbury, GE, Essar, L’Oreal, Cummins among others made pre-placement offers (PPOs), with 25 students accepting the direct route to their dream jobs. 

Other recruiters who participated in the placement process include players like PwC, Ernst and Young, Cognizant Business Consulting, Global e-Procure, Bristlecone, Capgemini, Citibank, HSBC, Standard Chartered Bank, JPMC, Deutsche Bank, GE, ICICI Bank, YES Bank, SBI Caps and Kotak Mahindra. The profiles offered were investment banking, corporate finance, bank operations, retail banking etc. 

Meanwhile, the institute also completed summer placements for 2011, with Cadbury offering the highest stipend of Rs 1 lakh for a two-month internship. 

The summer placements for the 2009-11 batch of NITIE attracted companies like Ernts and Young, KPMG, Cognizant Business Consulting, PWC, Citibank, HSBC, Standard Chartered Bank, Deutsche Bank, ICICI Bank, Edelweiss, Bank of India, Axis bank, Union Bank of India among others. 

HSBC offered internships to seven students, the highest for any one company in the banking and financial sector.

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Funding your Education

Last week, Indian Institutes of Management (IIMs) Bangalore and Kozhikode raised their fees by Rs 1.5 lakh and Rs 1 lakh, respectively. IIM Ahmedabad is also expected to soon raise its fee by Rs 1 lakh. After the fee hike, IIM-A would charge Rs 12.5 lakh for the post graduate programme in management (PGPM) for two years and IIM-B would charge Rs 13 lakh. Indian School of Business (ISB), too, hiked its annual fee by Rs 80,000 to Rs 15.3 lakh for the one-year course. 

No wonder, while qualifying for theses courses means a lot for the students, funding them requires significant financial capability. Then, there are educational loans that are offered by most banks and financial institutions. Many of them are coming with innovative products to tap this market. 

Union Bank of India recently launched an education product known as 'Union Education (Special Education Loan Scheme)' designed for studies at top-rung Indian B-schools. Under the new scheme, the bank is to cover the IIMs at Ahmedabad, Bangalore, Calcutta, Indore, Kozhikode and Lucknow; SP Jain Institute of Management and Research, Mumbai; XLRI, Jamshedpur and Indian School of Business (ISB), Hyderabad, among others. 

This scheme has a single rate of interest for all kinds of courses. For instance, loans up to Rs 20 lakh for ISB and Rs 15 lakh for other institutes would come at the same fixed rate of 10.5 per cent for male students and 10 per cent for female students. In addition, there is no collateral. Also, there is 100 per cent funding for all these courses, except for ISB, where 95 per cent of the course fees is given. S L Bansal, general manager - retail banking, Union Bank of India said “We have kept a margin of five per cent with loans for ISB because the course fee is high. Also, students have to pay this 5 per cent as registration fee, unlike other institutes. For other banks, the five per cent margin kicks-in when the loan amount exceeds Rs 4 lakh. 

The repayment period is also higher. Union Bank is offering a repayment period of seven years. Other banks, generally, allow four years. The loan would be available for the course tenure and the repayment holiday or moratorium period is the course period plus one year or six months after securing employment, whichever is earlier. 

Others like HDFC Bank also offer an exclusive product for premier management institutes, where the collateral is as per mandated by the Reserve Bank of India, said the bank spokesperson. According to the bank's website, for a two-year post-graduate diploma course, there is no collateral needed for loans up to Rs 12 lakh. The loan is available for up to seven years, including the repayment holiday period. Loans worth Rs 15 lakh for the one-year executive programme does not require any guarantee and collateral. Loans above Rs 15 lakh will need adequate collateral. “Our fixed rate of interest is between 10.50-13 per cent. Very soon we will also be launching the floating interest rates,” said the bank spokesperson. 

State Bank of India, the country’s largest bank, has no fixed-rate education loan. The floating rate education product charges 11.75 per cent for loans above Rs 7.5 lakh. A concession of 0.5 per cent is given to female students. The bank sanctions loans up to Rs 10 lakh for studies in India and for loans above Rs 7.5 lakh, a collateral security equivalent to the full value of loan is required. 

Axis Bank offers an education loan at 15.75 per cent (floating) for loans above Rs 7.5 lakh, the repayment period being four years, as per loan site www.apnapaisa.com. The bank offers loans up to Rs 10 lakh for studies in India with a third party guarantee and/or collateral security depending on individual cases, says the bank website. 

Financial experts said that if you are looking for an educational loan, it would be a smart idea to start scouting for it quite early. “Go through brochures of different banks as it will help you to zero-in on the best one,” said financial planner Suresh Sadagopan. 

The three most important points that one needs to look at are: 

• Collateral or guarantee required for the loan 
• Rate of interest 
• Moratorium period 

“Once you have all the details, you can try and negotiate the loan rate. Bank managers normally have the powers to reduce the rate by 0.25 to 0.5 per cent, depending on the quality of the customer,” added Sadagopan.

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ISB collaborates with peers to enhance B-school education

Hyderabad-based Indian School of Business (ISB) plans to organise workshops for other B-school faculty in a bid to enhance management education in the country.

The workshops will vary in scope and address different aspects of management education from classroom content to delivery. Workshops planned include those in case teaching and simulations, as well as those in the functional topics, such as the just-concluded workshop on marketing analytics. 

As part of the initiative, it recently organised a management workshop in the area of marketing analytics in which over 50 faculty members from across 25 leading b-schools in the country participated. The workshop was led by Gary Lilien from the US’ Pennsylvania State University. 

“This is one of the many programmes that are needed to enhance management education in India so that the foreign b-schools look to us for management education and teaching and imbibe global best practices, collaborate, network, and share their classroom experiences,” says Professor Arun Pereira, Head - Initiative for Excellence in Teaching and Learning, ISB. 

ISB now plans another such programme for case teaching that will be led by Canada’s University of Western Ontario later this year. Moreover, it aims to have such programmes in functional areas like finance, human resource, accounting and operations and any other function that offers a new pedagogy. “We will write to deans of B-schools to nominate their faculty for these programmes and this will be an ongoing process,” adds Pereira.

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100% Placements at IIM Shillong

All the 63 first-batch graduates of the youngest Indian Institute of Management (IIM) in Meghalaya have got job offers, with an annual average salary of around Rs.10 lakhs and the highest pay package worth a whopping Rs.34 lakhs.

The mood is upbeat and one of utter jubilation at IIM Shillong (IIM-S). 

"We are indeed very happy with the placements considering the fact that we are the youngest IIM and had to overcome several odds like logistical problems," Arijit Majumdar, the institute's corporate relations and external affairs head, told IANS. 

Not many outside India's northeast probably know that there is an IIM in the Meghalaya capital named after former prime minister Rajiv Gandhi. It started in 2008 from a makeshift campus and still functions out of an interim facility. 

Surrounded by pine trees, lush green lawns and mountains in the backdrop, the institute is functioning from the Mayurbhanj Complex -- the erstwhile summer palace of the kings of Mayurbhanj, Orissa. 

"We may be logistically handicapped in terms of the distance and location, but we can boast that IIM Shillong is one of the best tech savvy campuses in the country and more than 35 percent of the recruiters offered jobs by way of video conferencing," Majumdar said. 

In the just concluded placements, recruiters, both domestic and foreign, offered good pay packagaes to the young managers. 

"The highest domestic offer annually was around Rs.1.8 million. A few of the students were offered jobs by foreign firms with salaries ranging from Rs.3.3 to 3.4 million," Majumdar said. 

The recruiters include big names such as Deloitte, Infosys, Power Finance Corporation, Jumbo Electronics of Dubai, Hewlett Packard, Essar, Shipping Corporation, TELCON, Tata Motors and Escorts. 

The job categories were varied - from IT to finance, human resources to marketing, besides other domains. 

"I am thrilled to be part of the first batch and get a reasonably good job offer. The facilities or other logistic support may not be at par with the other IIMs in the country, but the faculty here is simply exceptional," said a graduate from Assam, requesting annonymity as his recruiter demands privacy. 

The institute offers a two-year post- graduate programme in management (PGP) and plans to offer other courses like the fellow programme in management (FPM), management development programmes (MDPs) and research and consultancy, along with some short-term certificate courses. 

"Our goal is to achieve excellence in the field of managerial education, training and research. Beginning with the meticulous short-listing of candidates till the finalizing of electives for the students to specialize in, there is just one word to describe the methodology here - rigour," Ashoke K. Dutta, director of IIM-S, said. 

"The 63-strong student force, an army of corporate generals, has been trained under 'eight day' weeks, in cutting edge finance and economics, as well as on sustainability and governance," Dutta added with pride. 

The Meghalaya government has allotted a 120-acre plot on which work is under way for a state-of-the-art academic-cum-residential campus.

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Most B-schools not to increase fees

Top-rung management institutions in the country have ignored the cue from the Indian Institutes of Management (IIMs) by deciding not to increase fees for their two-year flagship management programmes.

Mumbai-based SP Jain Institute for Management and Research (SPJIMR) for instance, says it has decided not to increase the fee this year, in tune with its social obligations. The institute, at present, charges Rs 4.5 lakh for its two-year management programme.

“We have decided not to increase the fee, as we consider it a social responsibility not to make management education expensive,” said an SPJIMR professor.

Gurgaon-based Management Development Institute (MDI) has also decided against an increase in fee for its management programme from Rs 10.95 lakh at present.

“We had increased the fee last year and we see no reason to increase it this year again,” said B S Sahay, director, MDI Gurgaon.

To cope with rising expenditure on salaries and infrastructure, some of the IIMs are planning to increase fees by Rs 1-2 lakh for their two-year post-graduate programmes (PGPs).

IIM-Bangalore’s board of governors, chaired by Mukesh Ambani, on Monday decided to raise the fees from Rs 11.5 lakh to Rs 13 lakh for the batch coming in from 2010.

Last week, IIM Ahmedabad (IIM-A) said it would raise the fees for its two-year PGP course.

IIM-Kozhikode (IIM-K), too, decided to increase its PGP fee by Rs 1 lakh to Rs 10 lakh from the next academic year. IIM-K Director Debashish Chatterjee told Business Standard: “The board has decided to increase the fee by Rs 1 lakh for PGP students from 2011 academic year. At present, our fees are Rs 9 lakh for two years.

Likewise, IIM Calcutta will decide on the increase in its board meeting on April 3.

Jamshedpur-based Xavier Labour Relations Institute has also decided not to increase fee immediately. Its current fees for the two-year PGP course are Rs 9.5 lakh, which were after an increase from the 2009 batch onwards. The 2008-2010 batch paid Rs 7.5 lakh for two years.

The institute however, is increasing its student intake from 180 students at present to 240 students this year.

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Management schools at IITs see 10-20% jump in salary offers

While the IITs themselves are not very happy with the placements as yet, their management departments are reaping the benefits of an improving economy

Salary offers during the ongoing final placements continue to be a matter of concern at the Indian Institutes of Technology (IITs). However, the management schools that are a part of these premier technology institutions are not affected and are seeing a 10-20 per cent jump in final as well as summer placement salaries.

These schools have been set up within the IITs, and are dedicated management schools or departments that admit students through the JMET test. While final placements at the IITs would continue till the last week of April, a few of the management schools at the IITs have completed final placements and are readying for summer placements for the first-year students.

For instance, the Department of management studies (DMS) at IIT Delhi — which is among the first B-schools in the IIT circuit to finish final placements this year — has seen the number of recruiters who participated in this year’s placement increase to 42, a substantial rise from last year’s 35. The highest salary at the institute stood at Rs 18.2 lakh, while the average was Rs 11.86 lakh. Last year, while average salary was Rs 9.4 lakh, highest salary offered was Rs 16 lakh.

Around 81 offers were made to 61 students this year. Major recruiters included investment banks such as Nomura, SBI Caps and JP Morgan Chase, as well as top notch financial recruiters such as American Express, PriceWaterhouseCoopers and Citibank. The institute also saw recruiters from leading FMCG companies like Procter & Gamble, Reckitt Benckiser, Hindustan Coca Cola Beverages, Marico and Johnson & Johnson, and industry conglomerates including RPG, General Electric (GE), among others. Aspirants in the consultancy domain saw a slew of offers from prime firms such as Deloitte Consulting, Infosys, Cognizant Technology Solutions and IBM. In addition, the process saw several public sector units (PSUs) such as SBI, BHEL, Shipping Corporation of India, Bank of India offering distinguished profiles.

The placements week at the management school in IIT Delhi was preceded by laterals which saw 21 students being offered coveted profiles. Average salary for laterals stood at Rs 12.14 lakh. For summer placements for the first-year students, a total of 32 companies were slotted for the current batch of 52 students. The biggest brands, most coveted profiles, multiple offers and an average stipend was Rs 48,500 (two months). Recruiters for summer placements came from various sectors including FMCG, consulting, IT, banking, manufacturing, automobile, healthcare and marketing, bringing diverse options for the students.

At the Department of Management Studies, IIT Madras, the highest salary during final placements has remained the same as last year at Rs 12 lakh, while the average salary has seen an increase this year to touch Rs 9 lakh, up from Rs 8 lakh last year, informed T J Kamalanabhan, placements chairperson of IIT Madras.

The Department of Management Studies, IIT Roorkee, has seen a 25 per cent increase in salaries this year over last year’s final placements. The highest salary this year stood at Rs 11.6 lakh offered by Deloitte, while the average stood at Rs 8.5 lakh. V K Nangia, head of the department of management students at IIT Roorkee, said, “We had around 60 students to place this year compared to 46 students last year. The economy has recovered, it seems.”

The Vinod Gupta School of Management (VGSOM) at IIT Kharagpur and Shailesh J Mehta School of Management (SJMSoM) at IIT Bombay are yet to release their final placement report for the batch of 2010. But the schools have already seen encouraging response for summer placements for the first-years. At VGSOM, the average stipend for summer placements has crossed Rs 37,000 with the highest domestic stipend at Rs 70,000, which is a jump of 20 per cent in remuneration over last year. Around 54 companies participated in the summer placement process for 98 students this year and offered diverse profiles to choose from. Students were offered profiles like corporate strategy and planning, rural banking, sports consulting, energy, environment, climate and infrastructure consulting, institutional development and media marketing and strategy besides the regular consulting, marketing, finance, operations and HR profiles.

C S Mishra, placements chairperson of VGSOM, said that a major change this year has been the change in summer internship duration from six months to two months. This change has brought about participation from many new companies besides the regular recruiters. A total of 21 new companies participated in the summer placement process this year which included big names like Axis Bank, Reckitt Benckiser, Titan, Siemens, O3 Capital, Daimler, SCI and NABARD.

At SJMSoM, around 56 companies offered diverse profiles to a batch of 98 summer interns while stipend per month remained at Rs 50,000 like last year, informed a member of the placement committee. Companies participating in the summer placements this year include Asian Paints, Cadbury, Colgate-Palmolive, Idea Cellular, among others.

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