Indian School of Business Tries to Deflect Scandals

(page 2 of 2)

ISB is not ranked by Outlook because it only offers a one-year program, but Arora says ISB's reputation is still safe. "I don't think [the media coverage] will have much of an impact on how students perceive the institution," he says. "It's not that students don't care, or haven't registered the information about the director, but the board of directors is divorced," he adds, from how they judge the school.

Moving Right Along

Instead, he feels that ISB may have handled the situation the best possible way by reacting quickly "rather than letting it fester," he says. "The school's reputation might have been affected if it had not acted with alacrity."

And Rangnekar is eager to move right past the issue. He has, he says, other fires to put out. Enrollment is up, but career placement for MBAs all across India is weak, forcing him to remind students, their parents, and the newspapers that obsessively report the starting salaries of top MBA students that ISB is not a placement agency, but a place of learning. ISB is working on a new $40 million campus in the northern Indian city of Mohali that's scheduled to open in mid-2012, and as he looks through his application files, he still doesn't see the best Western teachers applying for permanent jobs. "What do I have against a Wharton or a Harvard?" he asks. "Well, I have to appeal to those who are curious about India. I can offer them research opportunities, a good student body."

Above all, what Rangnekar is counting on is this: ISB is still a young school, and he's trying to uphold a reputation for the long run. It took in its first batch of students in 2001, and before this year it has remained free from the taint of any scandal. Instead, it has thrived by existing outside the Indian university system, which is itself seen as corrupt and incestuous by critics. That independence has allowed ISB to form alliances with the Wharton School at the University of Pennsylvania, the Kellogg School of Management at Northwestern University, and London Business School.

To some extent, what Rangnekar has going in his favor is the rapid growth in demand for MBAs in India. At last reckoning, the country was short by some 250,000, according to government estimates. That's why each seat at ISB is contested by several hundred candidates, many with undergraduate degrees from other elite Indian institutions, allowing schools like ISB to pick out students with the best indicators for success. "There are some great teachers at these schools," says Shyam Sunder, a professor at the Yale School of Management. "But essentially, they are also serving as a screening service. If you take students who are in the top one or half percent naturally, you could throw them in the gutter and they would be just fine."

Srivastava reports for BusinessWeek from New Delhi.

Business Exchange

Track and share business topics across the Web.