Should MBA remain urban?

What is common among the orange farmers in Nagpur, turmeric growers in Tamil Nadu, granite polishers in Hyderabad, blue pottery makers in Jaipur, Madhubani painters in Madhubani, Bihar, potato growers in West Bengal, apple and fruit growers in Himachal Pradesh, fishermen in Howrah and alphonso mango growers in Ratnagiri? They all are prospective auto buyers in non-urban India. From just 3.5% of total sales five years ago Marutis sale in rural India has shot up to 26% in fiscal 2012.

Not just the automobile sector, the rural segment is providing a significant volume growth to the FMCG industry also, clocking faster growth than the urban segment. The contribution of rural areas, due to rise in rural non-agricultural income, is fueling the growth of the FMCG sector. The growth of micro-finance sector and the percolating benefits from government welfare programs are also adding to the robust growth scenario of Indian rural retail market. According to an estimate by the research agency Nielsen, India’s rural retail market will expand from $1.2 billion in 2011 to $12 billion by 2025.

Perhaps, taking cue from these findings, the captains of Indian management education have started looking inwards to the countryside. Several IIMs and some other prominent B-schools have instituted their Rural Immersion Programs (RIPs) under which students spend 4-6 weeks in a rural setting not only to get to know the dynamics of a rural market but also to develop innovative business products relevant to the region. They interact with the consumers to understand their taste and preferences, and carry out value chain analysis of rural products to understand their strengths and weaknesses in facing competition in the market beyond their local region. Existing institutional arrangements like credit market, governance structure, legal infrastructure, etc. are also investigated and probed threadbare by these budding managers and/or entrepreneurs.

Today, when these overtures are being made by the premier B-schools of the country to embrace the rural market, a few words of concern would be necessary.

Rural marketing courses offered in the B-Schools develop fundamental skills among their students to market lifestyle products in virgin rural market. It is acknowledged that one of the key drivers behind this is the unprecedented growth of smaller packaging options in rural India. Approaches like e-chaupals and other chains of rural malls are also catering to the same objective. However, such rural business courses are yet to be designed that would impart skills among students in inclusive business or creating market for the poor.

Unfortunately, host of other B-schools are yet to pick up these issues with necessary seriousness. They are still happy grooming their students in western models of management that is way too much urban-oriented and often irrelevant in their application to businesses in a large part of the country. Only a few are engaged in mentoring students about the dynamics of the rural markets. The same spirit is yet to be picked up in the middle rung business schools of the country.

Todays business school curriculum in India requires a greater emphasis on the business opportunities present in rural India. Given the large influx of students from semi-urban and rural regions of the country into MBA programs today, such an emphasis will not only add to the skill sets of the future managers and entrepreneurs of the country, but also will augment the stock of knowledge capital in the economy.

Sharda University School of Business Studies (SBS) aims to fill this gap by placing due emphasis on the rural markets and by focusing on India-specific business opportunities. Our students get exposure to the rural Indian markets through rural visits and field trips. These activities supplement our specially designed courses on rural marketing, rural retailing, and micro-finance. Sharda University School of Business Studies keeps a close watch on the emerging trends in rural markets, and inculcates a skill in the students, which not only is beneficial for the markets themselves, but also is an invaluable differentiator amongst our students.

(by Dr Milindo Chakrabarti)

Dr Milindo Chakrabarti is a professor at Sharda University School of Business Studies. His areas of expertise are Micro-economics and International Business. Dr Milindo has a teaching experience of over 23 years, and has been adjunct Professor at University of Manitoba, Canada & Teaching at IIM, Ahmedabad. He is author of four books, and has written & published many papers and articles in journals and books of National and International repute.

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