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Business education in Pakistan – by M.K. Areola
Posted on August 13, 2010by Admin

Students at the IBA, Karachi

Source: Pakistan and Gulf Economist, Oct 26 – Nov 01, 1998

Supply and demand need to be managed to ensure quality education
It has been over five years now that the influx of foreign private investment into the country created
the demand of trained professionals in business administration, which has led to setting up of
universities in the private sector. Now that since, there have been changes in the foreign investment,
most of the business graduates are in surplus and reportedly without job.

While it is said that more than 90 per cent of the country’s business schools are located in Karachi, the
remaining have their regional centres or campuses in city. The reason for this is the fact that the city is
the country’s centre of business and financial activities.
With an estimated population of over 12 million, the city has more than 50,000 big, medium and
small industries, besides numerous cottage industries, with four major industrial trading estates
which provide employment to more than half-a-million people.

Not only does the city have the headquarter of the State Bank of Pakistan, it also serve as a base for
over a 100 financial institutions including 25 foreign banks and other financial institutions as well as
a large number of trade organisations which all make use of the professionals in the business
management.

Realising this need, some local investors saw this as an opportunity, and a large number of business-
oriented educators appeared on the scene to launch business schools. Some of them claiming to have
been affiliated with foreign universities and their curricula were designed as those of the universities
they claimed to be affiliated with.

Claiming an affiliation with a foreign university, on the other hand, is a guarantee of getting students
because of the preference for foreign things which persists in the country.

PUBLIC VS PRIVATE SECTOR INSTITUTES

Taking the advantage of strong awareness of business education in the general public, a large number
of private universities have cropped up over the years offering degrees in business administration as
well as in computer science and other related fields.
Traditionally, when talking about business schools, finance and marketing are the areas that always
come to mind, but with the mushrooming of different schools in recent years, the emphasis is shifting
from traditional business education to economics, technology, engineering, commerce, law and
medicine.

The implicit specialisation, that has already emerged, is that academic business schools are offering
long-term programmes which lead to degrees, but with the increase in the competition, and at the
broadest level, some of these universities now offer degrees in executive programmes requiring
attendance during the weekends and for periods of between three and four months only.

There are certain institutions, in the private sector which offer executive training. Lahore University
of Management Sciences (LUMS) is one of such institutions that have established their credibility
over the years in providing executive training of high standard for serving executives.

Following the same pattern, almost all the private universities now claim that they offer executive
training, and charge high fee whether the actual training is being provided or not, is another story.

According to Dr. Wahab, the Director of the Institute of Business Administration, the motivating force
behind the private business schools is the high profit, therefore, these institutes lack the interest in
providing facilities required for a quality business education.

There are large number of such fake universities operating from one small room in places countries
Philippines or Cyprus and many others and their course titles are very impressive on the paper while
in reality they are nothing.

And not only has the number of such universities increased many-fold during the past five years, the
management of some of them has changed hands three to four times during the same period, and
some have change their affiliation with a foreign universities and claimed to have affiliated with
another while some keep changing names as well as addresses for reasons best known to them, while,
yet more have declared themselves ‘centres of excellence’.

Some of these universities were described as ‘fly-by-night’ because nobody really knows much about
their origin except that they claim to have affiliation with universities that, in principle, do not
participate in the activities locally, and the students are usually given the option to pay in foreign
currency so as to give the impression that the amount is being transferred to the foreign principal.

One such institution was the Barrington American University which, when it was started functioning
in the city two years ago, claimed to have planned a “nation-wide rural programme whereby it will
make sure that talented youth from rural areas who cannot afford foreign education, are
accommodated and sponsored by various serviced clubs in the city, and the idea of starting our own
system from primary level is to create our own ISO 9000,” said the spokesman of the university while
speaking to PAGE.

Over a period of three years, not only did Barrington American University changed its name four
times, it changed campus almost the same number of times and the management has taken
themselves to court on various issues on which these premises were sealed a number of times leaving
the students out on the street without education, which the government had earlier warned them
about.
Another example is Clayton University which claimed that the university was established “as a result
of the meeting held at Harvard University Campus.” Such statement could be misleading because
“Harvard University or any other university campus is open to everyone whoever comes and holds
meeting at the campus cafeteria” Dr. Abdul Wahab warned.

While one group claimed that the mushrooming of business schools has led to stiff competition within
the schools in the private sector and has improved the standard of the ones in the public sector.

Others claimed that it is rather a sign of deterioration of the system as some of these business schools
are now competing by cutting costs and fees, continual lowering of entrance requirements and in the
process bringing down the quality as well. Some of these institutions now offer degree by paying their
fees on installments.

The competition among the private institutes is described as ‘fierce’ and their tactics may be termed
‘frontal attack’ only in a hidden manner.

“This competition,” according to Dr. Shahida Wizarat, “will improve the standard of the education as
long as it is a healthy competition.”

According to Professor Dr. Abdul Wahab, the competition among the private universities will result in
the closure of some of these universities while the remaining will be able to provide quality education
in view of the competition and the absorption rate in the job market .

MAJOR PLAYERS

The IBA Karachi, which is in the public sector, has, over the years, established a solid level of
credibility in the market for having tough entrance criteria including transparent admissions tests and
interviews and a consistent implementation of disciplinary standards.

Established since 1955, in collaboration with the Wharton School of Finance and Commerce,
University of Pennsylvania. The Institute later associated itself with the University of Southern
California. Today, the Institute is the largest graduate business school in the Third World and its
status was elevated to a degree-awarding institution four years ago.

The Institute offers, among other programmes a three-year, full-time degree of Bachelor of Business
Administration (BBA Hons), followed by a two-year, full-time master’s degree in business
administration (MBA), and MBA MIS programme (Computer) an MBA banking course, a part-time
MBA and a PhD programme.

Although, established just a little over a decade ago, the Lahore University of Management Sciences
(LUMS) has come to be regarded as the second best institute for business education in the country
and has established an assurance and confidence in its meritorious and thorough academic
programmes.

LUMS accords a high priority to research, and applied research in particular, which is considered as
an important element in the achievement of the overall mission of the University.
The University’s Centre for Management and Economic Research coordinates and conducts research
on major economic and management issues in the country as well as the region.

The Small and Medium Enterprise Centre assesses the specific training and development needs of
small enterprise owners/managers and to design and deliver training programmes addressing these
needs.

As a part of their regular curriculum, LUMS offers a two-year MBA and a three-year B Sc (Hons) in
Computer and Economics.

The International School of Management Sciences, which is affiliated with Newport University in the
USA, has three campuses in Pakistan one each in Karachi, Lahore and Rawalpindi and offer, in
addition to the BBA programme a full-time as well as part-time MBA programme, with three
semesters of overall management courses.

The Hamdard Institute of Management Sciences of Hamdard University which received its charter in
1991, offers BBA (Hons), MS in Business Informatics, MS in Finance, MS in Advertising as well as
MBA.

College of Business Management, another centre for business education is affiliated not with a foreign
university but with Sir Syed University, which was chartered around the same time as Hamdard
University .

Less than three years in operation, the college has managed to gather high rated faculty members and
is endorsed by the city’s notables in the business community such as Arif Habib, Jahangir Siddiqui
and S .M.Muneer.

The College offers a three-year BBA (Hons) degree besides a two-year MBA degree with specialisation
in accounting, finance and banking, management, marketing and MIS as well as a career placement
service.

Pak-AIMS, affiliated with Punjab University Lahore was established in Lahore in 1987 and offers a
two-year MBA programme with options to specialise in marketing, finance or accounting, as well as
three-year Executive MBA, a three-year BCS and a two-year BBA degree programme.

The City College of Higher Education in Karachi, also offers an undergraduate programmes with one
year of study in Karachi and the subsequent two years in Britain. The College claims an affiliation
with twelve British Universities.

Institute of Business Administration and Technology which claims an affiliation with Adamson
University, offers MBA programme in marketing management, finance an human resource
management, production management and its degree is awarded by Adamson University in Manila.

A standard of quality education has been established by the Institute of Business Administration of
Karachi from the public sector institution and the Lahore University of Management Sciences
(LUMS) from the private sector. And the graduates from these two institutions are being given job
preference in the market both in the private and the corporate sectors. At the lower end of the quality
are those coming out now to replace the BCom degree holders in the job market and do not really
mind what salary they are offered.
Other public sector universities that offer business education include Bahauddin Zakariyah
University, Multan; Punjab University, Lahore; Peshawar University and Allama Iqbal Open
University. But, except for the IBA Karachi, the product of these universities, as far as business
education is concerned was generally not welcomed in the market until recent years when they
improved their standards due to the stiff competition encountered from the private sector.

Beside the ones that have been mentioned earlier, others in the run, include, Lloyds School of
Business, International University of America which claimed to be a local campus of the same
University based in Canada, School of Business and Commerce which is affiliated with Preston
University.

Preston University is more than 14 years old in the country and operates two campuses in the city at
present beside other campuses in Islamabad, Rawalpindi, Lahore, Peshawar and Hyderabad.

Others include Institute of Business Administration and Technology, (IBADAT) which claims
affiliation with Adamson University of Manila,

PROBLEMS

One of the major problems of the business education in the country is the shortage or lack of faculty
members. Since the business administration is in great demand, all those who graduated have better
offer in the industry where the starting salary ranges between Rs 15,000 and Rs 30,000 per month as
compared to grade-17 (Rs. 6-7,000). in which the public sector universities can hire them, therefore
no graduate will be willing to make such a lifetime sacrifice.

Another factor is the period of promotion which is very slow in the public sector, while a young
graduate cannot be considered for promotion to next higher grade in the public sector until after six
years of continuous service while on the other hand rise to higher grade is very fast in the private
sector depending on one’s ability and hard work .Private universities, on the other hand mainly
depend on the services of retired teachers or visiting faculties from well established business schools
in the public sector.

Recognition or approval is another problem that some of these private institutions are still
complaining about while the others claim that the only recognition they wanted was from the market.

The establishment of foreign universities in Pakistan, according to some, is all right but the key
requirement is to ensure a proper regulatory framework so that standards of business education do
not get diluted. Such a step, however, was seen as an interference in the private establishment.

It is said that there is no provision under the law for foreign universities to establish a campus locally
without the government’s permission while, on the other hand, no private university can function
without the approval of the Federal Ministry of Education.

In the beginning of the issue, the UGC published a list of such institutions that were termed fake at
the time. Following which some of these universities published two and three-page supplements in
the dailies about their institutions. Some of these supplements even carried messages from the chief
minister and the governor as well as the federal ministers and other political personalities, such
advertisements have now become a regular routine in the dailies to which Dr. Abdul Wahab said
“advertising almost every day in the dailies does not make any sense.”
Shortage of books, magazines and other physical facilities are cited as other problems facing the
establishments imparting business education in the country.

Part of this racketeering include the claim by these fake universities that they have to send certain
amount to their principal universities abroad thereby charging foreign exchange from the students .

GOVERNMENT’S ROLE

While the national education policy for 1998-2010, or any other for that matter, does not have a
separate section on business education. There are different views on the issue of whether to regularise
the activities of the business schools in the private sector or not. While one opinion is that it should be
regulated others say the schools should be allowed to function freely.

Those who want a legislation to be passed to regulate the opening and functioning of the business
schools say that regularising the schools will minimise the malpractices such as opening of business
schools without facilities such as books, library, faculty as well as reduced the false claims of being a
local branch of foreign university.

Another argument against the legislature on business schools said at least these business schools are
providing some education, “though may not be of high caliber” while standards of education in
colleges in the public sector is declining day by day. The teachers are losing interest and the
attendance is falling to ten per cent level, therefore, the private business schools are at least better
than the public schools and colleges .

According to some of the operators of these universities, the holder of such degrees will be eligible for
a government job, but if it is not recognised, “no one cares about the government jobs nowadays in
view of the political instability and the jobs that are really not there” one of the students in the private
sector, complained.

The private institutions on the other hand claimed that their affiliation with foreign universities give
them greater chances of learning at first hand about the new advancements and rapid changes in the
business community around the world than, the ones in the public sector.

“There should be a monitoring team, to be set up by the UGC and that will improve the situation”
Ahsan Rafi, Director General of Preston University said.

Though in the recent months, the UGC has formulated a principle by which these private universities
could be recognised by the government and some of those who applied are said to have been given
NOC by the UGC or the concerned agencies while others are still in the pipeline.

OUTLOOK

Talking about the future of business education in the country, Dr. Wahab said, “It is not very bright
because of lack of counselling and guidance due to which a large number of students rush to the
wrong business schools.”
Regulation is one of the best things that could happen to the sector at this stage because that will not
only ensure quality education but will save people from being looted in the name of business
education.

A stringent regulatory system through which entrance procedure, fee structures and academic
programmes are screened is the next pressing requirement. An urgent need is the regulation in order
to arrest the situation before it goes out of control.

Both the private and the public sector business schools agreed that the demand and supply factor
need to be managed in order to ensure that the business education in the country is not overpriced
and that national priorities are taken into account at the same time.