The Mumbai Business School has downed shutters

When PaGaLGuY visited the Mumbai Business School (MBS) a year ago, it looked like place in a hurry. Situated on the third floor of a commercial building in a suburb in Mumbai, the school was filled with the sound of ongoing carpentry work. Be it in the classrooms or the corridors, there was something being built at every nook. The noise was so prominent that the general chatter of the students in the school was hardly heard. The former director of Mumbai Business School, Dr Sunil Rai had then told us that the school had great infrastructural development plans.

But when PaGaLGuY visited the school yesterday, it was quite a different sight. The watchman at the gate below said there was “no school or college anywhere in the building. When he was told that the school was three years old, he just shrugged his shoulders, and he was partly right. There was indeed no college on the third floor. The shutters of MBS were down and no official of the school in sight. Some maids who had laid their lunch boxes in front of the school said that it had been months since the school had shut down. We saw some furniture being taken out in December 2011 but lots of it is still inside, one added.

What happened to Mumbai Business School?

The answer is that it buckled under the pressure of the ongoing dull economic scenario and the general decline in MBA demand.

S Sriram, executive director of Great Lakes Institute of Management, Chennai said that the number of applications the b-school received for 2012 had been too few to keep it going. We were looking at 45 students in a batch but we got some 15-20. We thought it is best to close the PGDM programme than to go ahead with those numbers, he said adding that that “programme has been suspended but the institute has not closed down.”

According to the MBS website, ‘Mumbai Business School is an Associate Institution of Great Lakes Institute of Management, Chennai, run by the same management, both founded by Dr Bala Balachandran, and Mr A Mahendran. Dr Balachandran functions as the Founder-President of both these institutions…. The administration of the School has been completely revamped, with a new Dean in charge of the School. Great Lakes Institute of Management, Chennai, is mentoring Mumbai Business School in all its key areas viz. academics, quality standards, faculty and building MBS as a great School.‘

Sometime last year when the association was announced, Prof Bala Balchandran had then told us that the move had been made to make the Great Lakes presence known in Mumbai. We will also change the name and make it Great Lakes, Mumbai or something. What do you suggest?, he had asked. The name change however, never happened.

Prof Sriram added that a new course in Brand Management may make its way instead but that could not be confirmed right away. We will decide by April 2012 whether to start the course or not,” he said.

The executive director was honest enough to admit that the global economic conditions had played a huge role in MBS closure. Jobs are hard to come by. There are fewer people leaving their jobs and opting to do an MBA. This has resulted in fewer MBA numbers not only in India but world over. This decline in students directly impacts the running of the institute, he said.

That MBA numbers have been going down is not a revelation. The Common Admission Test (CAT) numbers have been hovering in the region of two lakhs for a few years now, though the numbers should have drastically gone up last year, given the fact that many other entrance tests had given way to CAT. In fact, even CRISIL’s research report published last week only reiterated that a shake-out was predicted in the higher education space in India with schools not being able to attract students to fill batch requirements. According to the report. occupancy in business schools was on a decline and might reduce to as much as 65% in the near future.

Prof Sriram predicted that in the next 3-5 years many more institutes will close down. The engineering colleges boom started in the 1990s but 15 years later, colleges were having a problem filling seats. The same is happening in the MBA space, he said. Since the MBS ran a one-year course, there were no students left in a lurch because of the sudden closure. Those who had sought admission for the 2012 batch had been refunded the money.

A class in progress at MBS, while it ws still operational. (Source: MBS website)

Former officials at MBS however, have a slightly different view as to why the school had closed down. One official said that that MBS had been in need of some local and persistent leadership. Prof Bala coming in was fine but someone was needed to be in Mumbai all the time and take care of matters. No point running the school practically from Chennai. In big b-schools, the issue is of bettering what one has, be it faculty or amenities. But in schools like MBS which are new, the work is more hands-on and about everyday matters.

Another official said that MBS could never get out of the shadow of Great Lakes. About vacant seats, people who were with MBS earlier said that last year the batch had been of 26 students and the batch before, 20, so if the school had 15-20 students this year, why should that have forced a closure? “A little bit of patience is required when ventures are new. Three years is little time to take a call on the viability of a school,” added the official.

MBS used to be in frequent talks with the All Indian Council for Technical Education (AICTE), for approval of its one-year programme (AICTE does not approve of the one-year MBA diploma). The fact that the school occupied one part of a floor in a commercial building, additionally, made dealing with the AICTE difficult as it never met AICTE’s infrastructural standards. “This is Mumbai, you cannot have large campuses and palace-like structures,” is what the then MBS director used to say. The school’s fees of Rs 700,000 did not include accommodation and food charges. The programme was a non-residential one but school authorities had helped students with accommodation in close by buildings.

When operational, MBS officials used to always pride themselves with what they considered MBS’ takeaways, primary among them was that there was nothing better than learning business in India’s business city. But running an institute in Mumbai where real estate prices were always at a high was not the easiest of tasks.

Students echoed the viewpoint. When PaGaLGuY spoke to a few a year ago, they were upbeat about studying in MBS. Most said that they had chosen MBS because there was no better place to do an MBA than the financial capital of the country. Today, the students have a different take. Those who took admission for the 2012 batch say that they were shocked that an institute could close down overnight. Many had paid the initial fees of Rs 50,000 which they got back as soon as the announcement for cancellation of the programme was made. S Kanan, one such student said that he had really aspired to study MBS in Mumbai. Kanan has already secured admission in another b-school but will shift if ever MBS reopened its PGDM programme. Some students said that MBS one-year programme was an easier option than the two-year PGDM available in most schools across India.

As of now, the MBS website has outdated information about admissions to the 2011 batch; when that information will be updated, and whether it will ever be, remains a question.

The above article has been re-published. Months ago when Great Lakes announced its association with Mumbai Business School, this correspondent was verbally told that Great Lakes was taking over Mumbai Business School. However, the fact is that Mumbai Business School is an associate institute of Great Lakes.