Course Auction for the sixth term

We have not had the mid term for the fifth term and course auction for the sixth term is already on. There are some excellent courses available for bidding. And that is the toughest part of the whole exercise of which course to take and which course to leave.

Amidst difficult choices, I am planning to bid for the Investing in Private Equity so as to supplement the learning from the Project we are doing on the Venture Capital. Then, I am also thinking to bid for the Financial Statement Analysis to develop expertise on interpretation of financial statements of companies- Private or Public.

One of the courses, Indian Financial Systems will be of high relevance to me, so I will bid for it along with a course on Strategic Performance Management which has a bit LBOs, VCs etc. I am also planning to do a course on real estate. That makes 4 hours of classes on Mondays and Wednesdays and 6 hours of classes on Tuesdays and Thursdays. So hoping for a tough term ahead with possibly five courses to have a relatively free 7th term...

Loss of the Talent- Is it?

It is preparation time at ISB so people are busy with their case preparations and resume preparation etc. along with the academics. I was advised by a young friend who reviewed my CV that I should get my resume reviewed from as many people as possible. Well, good old roomy at D-10 Aravali Hostel, IIT D and the next door neighbour D-9, both VPs at a haloed I-Bank in London have agreed to do the needful. A third friend, another VP, has already started pulling my leg and has forwarded his advance wishes to me for ‘graduating’ again.

It brings back the fond memories of the IIT days when we were preparing to get into our dream jobs. They were preparing for CAT while I was preparing for IAS. But our courses coincided for ‘stat, quant and verbal’ as they called it. I needed those subjects for the General Studies Paper 1 Question 1 and for essay writing. While doing my summer training at Orkay in Mumbai, where breakfast was served for 20 paisa and lunch for 1 rupee, I had saved some money due to the subsidized canteen. My investment was in the form of course packs, used by CAT aspirants, to enhance my speed in stats.

This had served two purposes; firstly I had become a bench mark for my friends who were writing CAT. They lamented that I got higher marks when I was not even preparing for that exam; they rejoiced that I was not preparing for that exam. Secondly, it was age old wisdom of Civil service aspirants to complete Stats portion of GS paper in 60 minutes if one wanted to complete that paper. I had completed that portion in flat 20 minutes and used rest of the time to build my essay type answers. The result was one of the highest marks in General Studies paper, the waterloo of IITians in that exam. 10 years down the line we are all winners, I would say.

So what brings me to an MBA course after so many years or why are the civil servants quitting the premier civil service, or are they? The same question was asked to me some ten times in last 2-3 weeks by the Assistant Editor of a business magazine.

I only know that three of my batch mates in the Civil Services exam went to Wharton and have not come back. That is a big B-School by any standards, I accept. But yesterday I saw a lady who had done her graduation from Wharton and is working in India now. She was here with her team to talk about their firm and various roles therein and various projects they undertake.

I had questions to ask, why working here after Wharton? Then there was someone from IITD, who must have been there around the time I was there. Again wanted to talk to him but the session lasted till 2.15 am so didn’t feel like delaying them for my curiosity. May be they wouldn’t have minded, I don’t know. But I know something for sure. They were working at 2.15 am to get the best people in their organization. And that explains the difference, may be.

I also know that if anyone believes that people are thinking beyond the Civil Services due to the differences in salary, then they are wrong. People knew the pay scales when they joined those services. They wouldn’t like to join as fresh grads in Corporate when their room mates in engineering college are VPs and Directors recruiting at the international level.

We will have to introspect to search for the reasons. May be some people had extra energy which couldn’t expand as much as they wanted in Government system. May be the horizon itself became small while people wanted to grow more. May be fresh air will reduce the feeling of suffocation. If nothing else, the hierarchies at newer places could be flexible and people would like to just laugh at the sense of humour of a colleague, instead of sirring him.

And about the fears of loss of talent, they are unwarranted. As long as people taught in best B-Schools around the world are interested to work in their country, there is no reason to worry about. No system owns the responsibility of ensuring development alone or monopolizes it.

On Education and Agency Problems

The Agency problem in management has been defined as ‘the managers maximizing their personal benefits at the cost of the share holders’ cost’. The cases of agency problems in education systems are as prevalent as in any other business, though have not been studied in such details so far.

Let’s take a case of a school created somewhere in rural area. Almost in all the cases, schools are born due to the vision of some committed individuals. In our country where need for educational institutions, of primary education or higher education, is wide spread. In such situation, it is the efforts of a few committed individuals, some local leader or influential person, whose efforts create school in a location preferred over equally deserving other places.

The owners lobby with the Government for posting of teachers in their backward area and if the school is a private one, they search for teachers on their own efforts. Managers and administrators are appointed for day to day governance as well. However, soon when the hue and cry subsides and the excitement reduces the agency problems begin to surface.

1. City based teachers gradually start commuting, to and fro, from city to village. They can be seen on ‘Intercity Expresses’ more often then in School. Soon they develop an apathy to the problems of the school and are more than happy if someone else is willing to share their responsibilities

2. Then gradually as the supervision reduces, the absence from classes (responsibility) sets in. But since this can be easily identified, role of teaching is often times sublet.

3. The responsibility of conducting the classes and running the school ends on the shoulder of quack teachers who gladly accept this difficult role. These quack teachers could be local unemployed youth or other caretakers

4. Over the time the quacks learn their importance to the school and the dependence of other stakeholders upon them and gradually they fill in the other vacuums. They soon realize that beyond teaching, they are also important for say selecting the students for a few scholarships or for grading of students. Owing to their position, many students may be willing to take private tuitions under them for better grades or position on merit list.

5. The managers too, assured of their salary, turn a blind eye to such events. Since I believe that they are too holy to share the booty with the quacks, it must be that they try to improve their earnings in the form of ‘leisure time’ by caring least for the problems of the school. ‘Leisure time’ after all is what the workers trade for money beyond a limit.

6. This continues as inspections are few and informed. During inspections the genuine teachers report back on duty and the quacks to their normal roles and the authorities are given an impression that everything is excellent.

7. The pass outs from such schools show strange deviations from their performance records when they enter the real world. For example a board topper from Agra, who got admission in a premium engineering institute on basis or her board marks, was soon dropped by the engineering college due to her poor performance in academics. She though had over 90% marks in her board exam while other students in the engineering college had much lower marks.

8. The reason for rise and fall of such students are the ‘quacks’ that distorted grading and inflated their marks. For example in the school examinations if a student not enrolled for tuitions would top, quacks helped their favourites (when they got the answer wrong) for following the ‘right approach’ in attempting the question and giving them full marks. Let’s say they created a plus 6 marks of advantage for their tutored by this. In the next exam when their student was better prepared they may pull other student down for not getting the exact answer by giving them a flat zero while they still deserved six marks for the approach.

9. Over a series of exams, the gains and losses of neutral students even out (Case of a drunkard moving a step forward and then backward and staying at his place), but for those for whom these benefits are aligned move many steps ahead just by ‘policy decisions’. In the worse form of agency problem, policy could be aligned to pull some one down as well, when the competition is high and the rewards like scholarships few.

10. These events don’t go unnoticed. Once people believe it is luck, then they assume it is coincidence and by third time most ‘give up’. Those who still try to report the things are branded as the ‘disturbing factor’. A few of such individuals may be seen trying to reach the DM or the DIoS for solving the problems.

11. Many (though not all) good students still reach the positions where they deserved to be- though after a lot of struggle. Most of those handicapped birds who reached the top of the tree by help of bull s*** end up being shot down. The real loser is the school as its product loses credibility in long run. The deserving students lose their good will for their school.

And the saga of education and the agency problems there in, goes on.