September 03, 2013

Dual Vocational Training System (TVET) model for MBA programs

MBA programs in India, and perhaps abroad as well, are at the crossroads. While the top 3 IIMs may be comfortably placed with their placement story, students of other B-Schools in the country are in a state of tension -- will they or will they not be placed in a job of their choice ? In this post, we explore how the famous German system of Dual Vocational Training (TVET) can make an MBA program more meaningful for corporates, students and for the teaching institution.

As I have argued in another post, B-Schools and the Placement Syndrome, placements are the only reason why B-Schools exist ! We may talk about research in management and of papers  being published in respected journals like Management Science but 99% of B-School students, the primary customers who actually pay for the faculty and the infrastructure, do not really care about such stuff. To them, the reputation of a B-School depends on the percentage of the graduating batch that is placed and the average salary that they have got.

In a sense, the prefix "Master" in the MBA may be the same as in an M.Tech, M.Sc, or M.A. but at the end of the day one must admit that while the last three are designed to be stepping stones to a career in research and a PhD, the MBA is essentially a skill based vocational program that equips students with the tools and techniques that will make him an effective manager.

We can of course redesign the MBA curriculum so that the V-School can become a B-School with a Research Agenda, but I am not sure whether the employers, the secondary customers, of B-Schools would really be interested. Rarely do employers select students on the basis of what they have been taught in a B-School. Had that been so, then students of an IIM would be no better placed than students from any other B-School since the course content is almost identical and the delivery is hardly any better ! Employers go to an IIM because because they know that the selection process of CAT+GD+PI means that the best students are there and if they employ these students it is more likely than not that these students will deliver better results. So the only value that an IIM ( or for that matter, an IIT in a different context ) adds is to act as a filter in the companies recruitment process.

Which brings us back to the idea of placements being central to the reputation of a B-School. Lost in this mad obsession with placements is the fact that the curriculum in a B-School can and does impart substantial and significant skills that can really help a manager with his or her line functions. But the focus being on placements and placements alone, the contents of the curriculum and the quality of delivery is generally ignored. This is the tragedy of the MBA ecosystem in India.

Is there a way out of this unfortunate and uncomfortable situation ? Can a B-School remove the placement pressure, both from itself and from its students, and focus instead on  the delivery of quality education that is really appropriate for companies that hire its MBAs/PGDBMs ?

The answer is "Yes, if we look beyond the standard two-year residential MBA model -- the one with a summer internship in the middle and a placement season at the end !"

An alternate model and one that has worked very successfully in Germany and certain parts of Europe is the Dual Vocational Training System (TVET) -- a time-tested economic model that has been incorporated in the national laws of Germany. This German model is designed for students passing out of (the equivalent of our) Class XII and joining various vocational schools like our ITIs but with a little bit of adjustment can fit our "post-graduate" MBA students as well. Let us see how it works !

After passing out of high school, students apply for internships in companies that offer such a role. Once accepted, the students also join a publicly funded vocational school and for the next two or three years they split the time between the school and the company. This means that the student could be at the company for three days a week, or every other week or a week after every two weeks depending on the model adopted by the school and the company. The school provides a generic, common set of training that leads to a diploma while the company provides training that is specific to the company or the trade ( machinist, boiler operator etc). At the end of the internship period, the student has acquired skills that are of interest to the company and so he or she is generally offered a full time employment.

This Dual Vocational Training System has been credited for Germany's low unemployment figures because it fine tunes student training with exactly the kind of skills that the country's industry needs and ensures that students are trained to fit the job profiles that actually exist. No student is left in the lurch without a job at the end of his coursework.

How can we tailor this model to fit the MBA ecosystem in India ?

Ideally we should begin with a group of MBA colleges but even a single one should be good to start with. This institution ( or group of institutions ) would talk to a group of companies that generally hire MBA students to understand actual requirements of freshers in the current year. Next a common fresher recruitment process is conducted at the institution through a job fair where company HR staff interview and select fresh graduates on the basis of educational background, CAT scores and the usual GD/PI process. Selected candidates are made an offer of appointment, subject to standard rules of probation and confirmation after one year. [ This is very similar to Indian Oil recruiting engineers at the entry level on the basis of GATE scores and not on the basis of the M.Tech program that uses GATE as the entry criteria !]

The students selected by different companies will join the MBA/PGDBM program and pay their own tuition with the understanding and assurance from each company that barring serious disciplinary issues they will be employed by the company at the end of one year.

Since the companies would expect the students to join in the same year itself, the MBA program offered by the institution must be shortened from the standard two-year format to an equivalent one-year format that is explained in my earlier blog post, the 49 week MBA program. In fact this program can be shortened even further if we use the first 22 weeks ( or 6 months ) to deliver the core, compulsory modules of the MBA program and then send the students to the company for their actual internship process.

In a normal MBA program, the students come back to the institution after their internship for their final year classes and this is where this modified program can create a killer advantage if the last trimester of elective subjects are delivered through an inexpensive distance learning mechanism at the company itself where the student is doing his internship !

This means that within six months of the admission process -- the kind of time it takes to run a decent Management Trainee program in any company -- the student is already onboarded into the company and actually working in the area where the company has a need or a vacancy. The last one-third of the MBA coursework can then be executed at leisure through distance learning that could be hybrid of asynchronous, synchronous and even periodic face-to-face interactions. Moreover the kind of electives that are offered could be tailored to meet the requirements of a majority of who are participating in this exercise. Once coursework is completed, the student gets the degree and joins the company as a confirmed employee.

This arrangement is a win-win situation for all participants.

  • For companies who are looking for freshers in their management cadre, this is a confirmed pipeline of people whom they themselves have chosen. Irrespective of the number of people that they have selected, the hassle of running a management trainee program for freshers is offloaded to the college at no cost to the company ! Internship payments start only after the first six months when the student comes on board.
  • For students the assurance of an internship/probation guaranteed after six months and the high likelihood of its conversion into a employment at the end of the year is a big source of comfort before investing Rs 6 - 8 lakhs in an MBA program. Moreover they can focus on their studies and acquire skills that are important and not get distracted with numerous internship and placement processes that happen in a normal B-School program.
  • For the institution the benefit is that both and inbound and outbound supply chains are taken care of and the faculty can focus on their subject, their research and make their pedagogy more effective. Moreover by conducting courses over the distance learning network they can create educational assets whose intellectual property can be monetised and converted into good revenue both for the institution and for the individual faculty members.

Are there any drawbacks in this model ?

Of course companies can renege on their promises and refuse to take the students after six months. This is possible though unlikely because if a professionally managed company has a plan to hire and train freshers then this plan will not change dramatically within 6 months.

However if a student performs very badly in the first six months of coursework or there are performance and disciplinary issues during the internship process then the company should have the right to refuse a final appointment and this must be made very clear to the student before he or she invests in the program.

Finally, how effective is the distance learning mechanism that will be used for the elective courses in the final trimester ? Can these be considered the equivalent of face-to-face courses delivered in a traditional residential program. ? The answer is "Why not ?" Distance learning is fast becoming the norm and MOOCs ( Massively Online Open Courseware ) are being offered by many of the world's finest universities. Georgia Tech is offering an entire MS degree through this route. With a little bit of effort on the part of the faculty to acquire some basic teaching skills, the distance learning route can become the norm not just for electives but for an entire online MBA program as well.

So to sum up we propose that we 
  • Adopt the methodology of the time tested Dual Vocational Training System (TVET ) from Germany
  • Modify the two-year residential MBA program to shorten it and place it in the TVET mode
  • Create a situation that meets the requirements of the corporates, is a safe investment for the students and allows institutions to focus on teaching and research.
Since this process would involve a degree of commitment from the industry, perhaps the CII or Chamber of Commerce could champion this model and take it up with its member companies.


Supriyo Chaudhuri said...


I am working to develop a model based on competence-based education in management and ideas expressed here surely resonates with this. However, I am slightly unsure about what role the Indian employers will be able to play in this. The German model works due to the constructive and inclusive role the German Trade Unions play/ traditionally played in the development of the system, a layer completely missing in India.

Besides, the Indian employers, on average, are far less involved in employee development than employers elsewhere. To be fair, in most European countries, the employers are given incentives to do so by the government, and someone somewhere needs to wake up and start doing something about it.

And, finally, the current B-Schools are anything but innovative, and lacks courage to do anything new (otherwise, would you not expect some of them to start innovating the model, when the existing one is so unsustainable). Again, the AICTE and other bodies will come into play - it is they who block any attempts at innovation of this nature.

Having said this, I do believe that the idea of moving to a more vocationally oriented model is inevitable, though this may need to be pushed through some administrative fiat rather than voluntary adoption in the sector.


Prithwis said...

I am not banking on the altruism of the Indian Industry. They hire MBAs anyway. My only suggestion is that they hire these persons before they get their MBA diploma on the basis of the MBA entrance credentials ONLY ( and not on the basis of what they learn during the MBA, which is not much)

Hence they spend nothing, get their "management training" paid for the student and the student is willing to invest in this because he know that there is near-guaranteed job waiting for him at the end.

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