[MavericK]

http://www.iimcal.ac.in/newsandevent...cle.asp?ID=201
http://www.telegraphindia.com/103122...ry_2693918.asp

Why the CAT gets all the cream
Professor Alok Ray

An article published in The Telegraph on December 24, 2003

Click here to read the article at www.telegraphindia.com

Despite the recent leak, the CAT remains the best way to screen students for the IIMs. It is comprehensive, deman- ding, foolproof, and fairly inexpensive, writes Alok Ray
The author is professor of economics at the Indian Institute of Management Calcutta
The views expressed by the author in this article are strictly personal

Following the recent leak of the CAT question paper, a number of questions are being asked in the media regarding the role of the Indian Institutes of Management and CAT in today’s India. These deserve discussion and debate.

The first question: what roles are the IIMs supposed to perform in a country like India? The IIMs were established in the early Sixties. Even “socialist” leaders like Jawaharlal Nehru found an urgent need for institutes that would produce and train managers for the public and the private sectors. The shortage of professional managers, like shortage of capital, was regarded a crucial constraint on India’s industrialization drive. Today, the two Indian brands that are globally accepted as world class are the IITs and IIMs. Graduates from these institutes are welcomed on the payrolls of employers all over the world .

Of course, there are the doubting Thomases. Some think that managers cannot be produced in business schools. Many great businessmen are self-taught. True. But they miss a few points. First, what can be learned through years of experience and “doing” can often be mastered in a much shorter time though systematic education. Some of the top “unschooled” managers have openly recognized this.

Second, today’s business world is much more complex and competitive than it was earlier. All scope for cost cutting, productivity improvement and other ways of enhancing bottom lines by the use of sophisticated state-of-the-art techniques must be exhausted for survival. It was not so in older days of “protectionism” and licence-permit raj.

Third, businessmen are not fools. They would not have paid such high salaries to IIM graduates over such a long period if they had not got their money’s worth. One may still argue that it is not for their training at the IIMs but the fact that they have been screened several times by such demanding tests as the IIT joint entrance examination and then again the IIM-CAT which gives them their astronomical market value.

That is partly true but certainly not the full explanation. Ask any IIM graduate and he would vouch for the value added though quality education at the IIMs. In any case, that brings us to the question of the value of CAT. This year nearly 1.3 lakh students are competing for the 1,200-odd seats at the six IIMs. The CAT is a written test which evaluates a student’s quantitative, analytical and verbal skills. Those who score very high are then called for a group discussion and personal interviews. The CAT scores, the scores at the GD and the interviews, past academic achievements are all taken into consideration, with pre-determined weights, to prepare a composite score and the final selection is made strictly according to this list.

There is not a single known case where a student has entered IIMs through the back door, by violating the merit list, despite intense pressures from different quarters. One circumstantial evidence would be to verify how few (almost non-existent) among the successful entrants to IIMs are the sons and daughters of IIM faculty or board members. This shows how scrupulously the sanctity of CAT and the admission procedure has been maintained over the years. This year’s leakage, which most probably happened at the press, is an aberration. Nonetheless, it is a matter of deep regret and concern, specially as the IIT-JEE question paper also got leaked a few years ago. This shows how vigilant the test administrators need to be against unscrupulous people who can do anything to enter the bastions of merit.

How about the suggestion that CAT be replaced by a single uniform national test for all management schools and that personal interviews be done away with? Apparently, this would reduce the hassles of students. But imagine that a few undeserving students, who paid a few lakhs to buy the question paper and answers, manage to get through the CAT. At least, under the present system, there is a fair chance that they would be screened out at the interview stage. Moreover, the GDs and interviews are meant to check the communication skills and leadership qualities of the student which are so essential for managers.

The problem with a single admission test for all management institutes is that the difference in the quality of applicants and management schools is so great in India that it is nearly impossible to devise a single test which will be able to differentiate students properly. The CAT is meant to screen out the really bright from the rest. If all students are made to go through a CAT-like super-difficult test, many of them would score very poorly and there would be so much bunching at the lower levels that it would not be possible to differentiate between them. So, there will have to be a different test for such students. For similar reasons, the Indian administrative services examination has been kept different from the state-level administrative service exams.

The counter-argument is that all management students in the United States of America go through a single test called the GMAT. Why not in India? A few points need to be noted here. The difference in quality between the top business schools and the bottom schools in the US would be much less than the corresponding difference in India. Unfortunately in India, the All India Council of Technical Education and various universities have given approval to hundreds of management institutes which have mushroomed without the required infrastructure and good quality faculty. The standards of students going into such institutes would also be correspondingly low.

Second, the GMAT has been a world-wide test backed by enormous resources. A great deal of research has been done over many years to make it scientifically valid for a wide cross-section of students. The current paper-setters of CAT or any other body in India are simply not equipped to design such a test at this point of time.

Third, the GMAT is not a pencil and paper test. For several years now, the GMAT (and GRE) has been made an online test taken by students sitting at a computer terminal at the testing centre. One can sit for the test any day throughout the year. This is a big advantage over the CAT which has to be taken on a fixed day throughout India, irrespective of the student’s convenience. “Why can’t applicants to the IIMs take the GMAT (instead of the CAT), which is conducted throughout the year by the Educational Testing Service of the US?” ask some students.

There are several problems. One, the GMAT is more than ten times expensive (costing around $ 225 or more than Rs 10,000) than the CAT (which costs around Rs 1,000). Two, logistically it is nearly impossible for 1.3 lakh students to take online computer tests at ETS test centres even if the examination is spread over several months. For example, in Calcutta there is only one ETS test centre for GMAT. Further, each test centre has a small number of properly equipped computer terminals. Third, applicants from remote areas or from poor families may not have adequate familiarity with computers and computer-based tests. They will be at a distinct disadvantage, relative to others. For all these reasons it is not practicable to substitute the CAT with the GMAT, at this point of time.

Finally, there is a feeling that the fees charged by the IIMs — around Rs 3 lakh over a two year period — are exorbitant for a poor country like India. Here, remember that the average starting salary of an IIM graduate is around Rs 6 lakh per annum. So, the two year fees amount to only six months of their first year’s salary. Why should they not pay for the cost of the high-class facilities they enjoy when they can afford to pay?

For poor students, the IIMs provide many scholarships. These can be further increased. Banks are also eager to give loans to IIM students because repayment is no problem. The government, since the early Nineties, has been insisting that higher education — especially institutions of engineering and management — should be self-financing as far as possible. The IIMs are the one place where this policy can be implemented, without compromising the equity principle.

[DoReMe]

Originally Posted by anil

Of course, there are the doubting Thomases. Some think that managers cannot be produced in business schools. Many great businessmen are self-taught. True. But they miss a few points. First, what can be learned through years of experience and “doing” can often be mastered in a much shorter time though systematic education. Some of the top “unschooled” managers have openly recognized this.

Second, today’s business world is much more complex and competitive than it was earlier. All scope for cost cutting, productivity improvement and other ways of enhancing bottom lines by the use of sophisticated state-of-the-art techniques must be exhausted for survival. It was not so in older days of “protectionism” and licence-permit raj.

That is partly true but certainly not the full explanation. Ask any IIM graduate and he would vouch for the value added though quality education at the IIMs. In any case, that brings us to the question of the value of CAT. This year nearly 1.3 lakh students are competing for the 1,200-odd seats at the six IIMs. The CAT is a written test which evaluates a student’s quantitative, analytical and verbal skills. Those who score very high (obviously, if it hadnt been so, the papers wouldnt have leaked SIR) are then called for a group discussion and personal interviews. The CAT scores, the scores at the GD and the interviews, past academic achievements are all taken into consideration, with pre-determined weights, to prepare a composite score and the final selection is made strictly according to this list.

How about the suggestion that CAT be replaced by a single uniform national test for all management schools and that personal interviews be done away with? Apparently, this would reduce the hassles of students. But imagine that a few undeserving students, who paid a few lakhs to buy the question paper and answers, manage to get through the CAT. (as pointed out earlier, this was cos only HIGH SCORES are called for GD and interviews. its only AFTER the GD and interview, that the past academic achievements are give SOME weightage. i know of a person who graduated from IITM - he just managed to SCRAPE thu n is not in IIMC. so i guess the institution from which u graduated holds more weightage that acedamic qualification err achievements...) At least, under the present system, there is a fair chance where is the magnifing glasses? i thought i read the word fool-proof somewhere in here... that they would be screened out at the interview stage. Moreover, the GDs and interviews are meant to check the communication skills and leadership qualities of the student which are so essential for managers. isint this conflicting to wot u said above that that mangers can be produced in b-schools wot u say seems to support the belief that managerial skills are in-born. oh.. i am so confused

The problem with a single admission test for all management institutes is that the difference in the quality of applicants and management schools is so great in India that it is nearly impossible to devise a single test which will be able to differentiate students properly. Sir why dont we narrow this down to the 6 IIMS for starters? why dont u tell me why is there so much difference in the quality of education at the 6 schools The CAT is meant to screen out the really bright from the rest. If all students are made to go through a CAT-like super-difficult test, many of them would score very poorly and there would be so much bunching at the lower levels that it would not be possible to differentiate between them. but only the TOP scroes would be receiving the call letters right? so y r u concerned about bouncing at the lower levels So, there will have to be a different test for such students. For similar reasons, the Indian administrative services examination has been kept different from the state-level administrative service exams.

The counter-argument is that all management students in the United States of America go through a single test called the GMAT. Why not in India? A few points need to be noted here. The difference in quality between the top business schools and the bottom schools in the US would be much less than the corresponding difference in India. Unfortunately in India, the All India Council of Technical Education and various universities have given approval to hundreds of management institutes which have mushroomed without the required infrastructure and good quality faculty. y r u raising concern over this now? if this really troubles u, u should have voice it when the orders were issued, not now. The standards of students going into such institutes would also be correspondingly low. thats y take this as a challenge Sir. create a belief in yourselves that u can give the best to every one not just the *really bright*.

Second, the GMAT has been a world-wide test backed by enormous resources. A great deal of research has been done over many years to make it scientifically valid for a wide cross-section of students. The current paper-setters of CAT or any other body in India are simply not equipped to design such a test at this point of time. wow this is news to me :!: those who VOUCH for IIMS r u listening

Third, the GMAT is not a pencil and paper test. For several years now, the GMAT (and GRE) has been made an online test taken by students sitting at a computer terminal at the testing centre. Sir if u r unaware, technology is inproving at a drastic rate, n u need to catch up with it. i understand India is a developing country but how long it it going to remain so and also let me see some developments. for starters lets try to save a few trees but going in for a paperless test. considering the deforestation and population explosion, if CAT is going to remain paper-based, then we'll have to IMPORT papers in due course One can sit for the test any day throughout the year. This is a big advantage err... ok let me give u a small case study here, i am to appear for CAT and just on the dawn of the D-day something drastic happens say my father meets with an accident. so now u'll tell me that managers need to be self composed so i shouldnt get disturbed and take the test in total self-control. or i have another option - appear NEXT year. Sir do u know that means 365 days... n yes since CAT is inexpensive (u said so) its ok i guess. but tell me do u REFUND the money to candidates who dont take the test up. why they didnt is none of ur concer i understand that. over the CAT which has to be taken on a fixed day throughout India, irrespective of the student’s convenience. “Why can’t applicants to the IIMs take the GMAT (instead of the CAT), which is conducted throughout the year by the Educational Testing Service of the US?” ask some students.

There are several problems. One, the GMAT is more than ten times expensive (costing around $ 225 or more than Rs 10,000) (but a to-be manager in INDIA appers for almost every entrance test thta has cropped up. n considering the cost of application, cost of test, cost of expense for GD interviews, coaching etc etc.. i guess it works up to almost the same, doesnt that junta ) than the CAT (which costs around Rs 1,000). Two, logistically it is nearly impossible for 1.3 lakh students to take online computer tests at ETS test centres even if the examination is spread over several months. For example, in Calcutta there is only one ETS test centre for GMAT. Further, each test centre has a small number of properly equipped computer terminals. Third, applicants from remote areas or from poor families (oh yah, i forgot, CAT is inexpensive, u give waivers for SC/ST classes, n the moment u step into the campus, banks come falling at yr feet to give u loans... ) may not have adequate familiarity with computers and computer-based tests. They will be at a distinct disadvantage, relative to others. For all these reasons it is not practicable to substitute the CAT with the GMAT, at this point of time.

Finally, there is a feeling that the fees charged by the IIMs — around Rs 3 lakh over a two year period — are exorbitant for a poor country like India. Here, remember that the average starting salary of an IIM graduate is around Rs 6 lakh per annum. So, the two year fees amount to only six months of their first year’s salary. Why should they not pay for the cost of the high-class facilities they enjoy when they can afford to pay? (see see u forgot the poor family blah blah u just pulled in the previous para. the credit here goes to the banks, who help in the funding)

For poor students, the IIMs provide many (be precise Sir, how many? n where can i get the authentic statistics on it ) scholarships. These can be further increased. Banks are also eager to give loans to IIM students because repayment is no problem. The government, since the early Nineties, has been insisting that higher education — especially institutions of engineering and management — should be self-financing as far as possible. ( i guess the govt felt that by giving a free hand to the worthy institutions, it would only stand to gain. thanks to brain drain, India is still a developing country. but only the fee structure seems to be going high. the number of seats should also proportionately increasing considering the fact that India is developing its population too) The IIMs are the one place where this policy can be implemented, without compromising the equity principle.

[mistake]

Second, the GMAT has been a world-wide test backed by enormous resources. A great deal of research has been done over many years to make it scientifically valid for a wide cross-section of students. The current paper-setters of CAT or any other body in India are simply not equipped to design such a test at this point of time. wow this is news to me those who VOUCH for IIMS r u listening

Why should this be news? Hasn't this been the case always?
As u pointed out about the difference in standards between the 6 IIMs themselves. Moreover, where is the transparency- now what goes into sending out the call letters is totally unknown. We can only conjecture about the percentages of CAT score, work ex , acads etc. etc. Even the negative marking is not clear. What this actually helps is the mushrooming of theories and of coaching institutes like the several we have.
Now compare it to the admission procedures of the B-schools abroad. Don't they place a lot of emphasis on the SOPs and LORs? Now considering the Laloos and Mayawatis in our country , don't u think the LOR thingie would snowball into something like the SC/ST/OBC reservation type stuff?
Think it over...there can't be islands of excellence, untainted and unaffected by the direction of the society and its culture (read corruption). I remember PG having said he knows of cases - where admissions to IIMS has happened without the candidate having appeared for CAT!! :( :x :wink:

Cheers,maloy

[DoReMe]

Originally Posted by itsmaloy

I remember PG having said he knows of cases - where admissions to IIMS has happened without the candidate having appeared for CAT!! :( :x :wink:

Cheers,maloy

and the fellow thinks we'll buy his story :!: thz for the info maloy

[mistake]

A l'il confused here, who do u mean by "the fellow"? Hope it's not PG!!

[Spiderman]

Originally Posted by itsmaloy

A l'il confused here, who do u mean by "the fellow"? Hope it's not PG!!

pg summoned to clear the confusion. pg hajir ho

Gary

[capreal26]

There is not a single known case where a student has entered IIMs through the back door, by violating the merit list, despite intense pressures from different quarters. One circumstantial evidence would be to verify how few (almost non-existent) among the successful entrants to IIMs are the sons and daughters of IIM faculty or board members. This shows how scrupulously the sanctity of CAT and the admission procedure has been maintained over the years. This year’s leakage, which most probably happened at the press, is an aberration. Nonetheless, it is a matter of deep regret and concern, specially as the IIT-JEE question paper also got leaked a few years ago. This shows how vigilant the test administrators need to be against unscrupulous people who can do anything to enter the bastions of merit.

I dunno why so defensive are these guys abt the entire sanctity of the cat process. makes me feel like cat is the & the only thing they attach pride of iim's ..

leak or no leak .... why shud they go abt explaining validity of cat .... whosoever wants to get inside has to clear that .... shud be their attitude....

There are several problems. One, the GMAT is more than ten times expensive (costing around $ 225 or more than Rs 10,000) than the CAT (which costs around Rs 1,000). Two, logistically it is nearly impossible for 1.3 lakh students to take online computer tests at ETS test centres even if the examination is spread over several months. For example, in Calcutta there is only one ETS test centre for GMAT. Further, each test centre has a small number of properly equipped computer terminals. Third, applicants from remote areas or from poor families may not have adequate familiarity with computers and computer-based tests. They will be at a distinct disadvantage, relative to others. For all these reasons it is not practicable to substitute the CAT with the GMAT, at this point of time.

crap ... it shud be made more exclusive .... anybody whos serious abt making it to iims can afford a travel to one of the cities .. make the fees of test 10k & all crappy junta giving the exam for the fun of it wont give it ..... u got 1/10 the no of applicants. but same rev from cat..
conduct test like a world class test .. well administered at select places..
get ur cream & show to rest.

this numbers game schadenfreude just beats me ....

wat say ppl ..

[ajaypp_iimc]

Hi everyone,
It seems some of u have some bones to pick with Prof. Ray's article. So, lemme try and answer some of those.

1) Abt CAT being made online like GMAT. Watever we say about the penetration of IT into the country, there is nothing like the infrastructure required. Some statistics to drive home this fact, since our Sound-of-Music friend seems to like facts an' figures- there r about 85,000 GRE applicants from India - presumably they take GRE in a YEAR!!! CAT is classified as the toughest and best management exam in the world by the Economist and one of the 3 tuffest entrance exams in the world. And thatz above GMAT!

2) The suggestion that the number of seats at the IIMs be increased does not hold water. One, the faculty student ratio would be diluted if this happens. In top US b-schools it is one-is-to-three or four. In the IIMs, it is already one-is-to-five or higher.The number of qualified faculty is limited. Secondly, a swollen intake would drastically affect placements. Recruiters, especially foreign ones, flock to the IIMs because they expect a certain minimum standard which is ensured by low intake.
Take Harvard, for instance, they have an intake of 800. But despite being a top US b-school, they cannot find full placements. And, that is when their market is the US industry which is about 10-12 times the size of ours!!

3)The matter about the difference in quality of the IIMs. It exists, believe it!! ha: In the case of the older 3 IIMs , on main factor is their superb alumni network along with their world class faculty and infra. Then, there is the IIM brand, which is undeniable international. If we deny that also carries tremendous weight, then sorry, we r denying reality. Case in point- today, the LNM group- second biggest steel producer in the world - came to IIM C for laterals. Guess where all they recruit from? IIMs A, B and C, ISB..and then Wharton, Kellog,Sloan, LBS,INSEAD et al. Same is the case with int'l leaders like Lehman, J P Morgan, Citibank, P & G and a long list of others.

4) By the same logic, the veritable ocean of b-schools which have sprung up in the recent past bear no comparison with the IIMs. The MHRD decided to allocate permission to all and sundry.Result? MBAs forced to work for salaries that any decent graduate will scoff at! :(

5) Are fees at the IIMs worth it? Yes, damn yes. Like Prof. Ray said , when the average salary u expect is 6 lakhs, thatz a rather good return on investment. But, that's not the crux of the matter, for the kind of facilities being extended , in terms of faculty and infra, it's worth it. The fees of the IIMs are far less than that of the better private b-schools and definitely less than those of private medical colleges. to which so many of us flock to proudly. The reduction of the fees would destroy the self dependence of the IIMs, which is what allows them to function. I know, since I work closely with the administration as General Secretary at IIM C, that this independence allows us to take decisions far faster than Govt: red tape will allow us to.

6) About the brain drain aspect, do note that less than 100 out of 1200 IIM grads a year are posted abroad. The vast majority work in Indian industry and generate value for the national economy, which is exactly the purpose for which the IIMs were setup for.

7) The GD and PI bit. It does carry a lot of weightage. And it does allow the IIMs to screen out a lot of people. It's not easy to get thru on a test score alone just like in IIT JEE. Again, it's true while CAT tests some of the basic skills required by a manager, the IIMs need to test some other contact skills as well as ensure the candidate's background is true. It is never the IIM's motto to "make a top class manager outta anyone!". If that were the case, we shud have picked up ppl by random, why have CAT at all? No, some basic skills and abilities are required, which are honed in the two years spent at an IIM.

About those scholarships. yup, they do exist. Last time I checked there were over 50 merit-cum-need scholarships available at C alone. So, that shud take care of a lot. And the banks are willing too. Two things abt the loans. One, it is not coz' the banks are kind hearted. They give loans coz' they know they will get their money's worth. Try taking a loan for an MBA at XYZ institute and u will find out that the banks will avoid u like a bad case of measles. Second, from a student's point of view, it is pretty to finance his IIM education with a loan, coz' he or she is pretty certain about the returns.

Thanx for bearing with me so far. Just had to make sure that all of this was said. After all u guys are going to be the next crop of IIM grads. U shud know the score.
In the end, it all boils down to the fact there is no free lunch. India needs quality management education to create managers who can take our economy to its zenith. Letz not dilute that aim with frivolous arguments. In the end , the value of every victory is in how difficult it was to win. :idea:

regards,
Ajay

[Spiderman]

Originally Posted by capreal26

crap ... it shud be made more exclusive .... anybody whos serious abt making it to iims can afford a travel to one of the cities .. make the fees of test 10k & all crappy junta giving the exam for the fun of it wont give it ..... u got 1/10 the no of applicants. but same rev from cat..
conduct test like a world class test .. well administered at select places..
get ur cream & show to rest.

this numbers game schadenfreude just beats me ....

wat say ppl ..

amit bhai,
u have not given any reason why the third reason in the above arguement is not valid . how can someone without knowledge of online tests give GMAT ?it will be a disadvantage for him/her if he/she does not have access to a computer .as we all know computer penetration in india is very low.

Gary

[poltergeist]

really gud post, ajay...
cudn't agree with u more..
regards,
rakesh