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FACTORS AFFECTING SELECTION OF B-SCHOOLS

Submitted To: Dr. Gunjan Malhotra

Submitted By:

Jasvir Singh (09FT-067)


Lakshey Bhalla (09FT-074)
Nishant Kaila (09FT-100)
Rahul Aggarwal (09FT-111)

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Acknowledgement
We express our sincere gratitude towards Dr. Gunjan Malhotra, professor Business Research
Methods, IMT-Ghaziabad for helping us in the preparation of the project report. Her
encouragement, guidance and support from the initial to the final level enabled us to develop an
understanding of the subject.

Lastly, I offer my regards and blessings to all of those who supported us in any respect during
the completion of the research.

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Table of Contents
1. Abstract...............................................................................................................................................4
2. Introduction.........................................................................................................................................5
3. Review of Literature............................................................................................................................7
4. Research Objectives............................................................................................................................9
5. Methodology/Research Design.........................................................................................................10
6. Data Analysis.....................................................................................................................................12
a. Cronbach’s Alpha Test..................................................................................................................12
b. KMO and Bartlett's Test................................................................................................................12
c. Total Variance Explained..............................................................................................................12
d. Rotated Component Matrix...........................................................................................................12
7. Analysis & Interpretation...................................................................................................................14
8. Conclusion.........................................................................................................................................16
9. Bibliography.......................................................................................................................................17
10. Appendix........................................................................................................................................18

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1. Abstract

This research paper deals with the various factors that determine the selection of a business
school. The B school a student selects to attend has a huge impact on the future and the
career. There are a large number of schools that have come up over the years some good,
some very good and many of them of varying standards.

The selection of a B school has become all the more difficult from a student’s point of view
because there are hardly any standards in place to rank/grade a business school. Narrowing in
on a few factors is the purpose of this research.

The factors are studied considering both the global as well as a national environment. But
due to lack of resources the survey was conducted only on the schools within the country.
Thus the suggestions are for the students aspiring to pursue an MBA within the country.

Keywords and Phrases:

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2. Introduction

The Master of Business Administration (MBA) attracts people from a wide range of


academic disciplines. The MBA degree has been adopted by universities worldwide, and has
been adopted and adapted by both developed and developing countries. Most programs base
admission on the competitive exams, significant work experience, academic transcripts,
essays, references or letters of recommendation and personal interviews. Schools are also
interested in extracurricular activities, community service activities and how the student can
improve the diversity and contribute to the student body as a whole.

There has been a sea change in the economic and industrial scenario of India over the past
few years. The Government's policy of liberalization has unshackled restrictions and controls
on business with the result that there has been a spurt of entrepreneurial activity and a
spawning of mega-conglomerates. Naturally, all these organizations need talented, qualified
managers with a professional approach. So they turn to MBAs from premier business schools
for their requirement. Increasing globalization has perpetuated severe competition and tough
battles for market share. This has necessitated the need for corporations to revise and reorient
business policies.

Following the trend in the requirement of the time there has been a constant increase in the
number of MBA aspirants through the years. There are large numbers of MBAs present in
the country and with the constant demand of the degree more and more number of Students
with the degree are coming out of B-schools every year.

MBA today is the most sought after degree all over the world. Research shows people tend to
excel and enjoy career fulfillment when they are in careers that are broadly aligned to their
core personalities. MBA degrees require intellectual, analytical minds, leadership skills and
the ability to motivate people.

Also when seen in Indian perspective we find that people opt for this course due to the
following reasons.

a. Network - Your MBA network is for lifetime if you know how to leverage it.

b. Learning in a disciplined fashion - Without an MBA, you are learning from the school
of hard knocks. There is a chance that you will pay a higher price for some lessons in the
school of hard knocks

c. Awareness - Chances are you don’t know everything and chances are you will never
know everything in this lifetime. However, there are some things that you need to know
that you don’t know that you need to know. An MBA will increase your awareness on
these things.

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d. To get an advantage at the start: With an MBA, you enter the work world in the fast
lane. Of course, you can’t stay on the fast lane just because you have an MBA. You need
to produce highly valued accomplishments for your employer or customers or both.

e. Course correction: For some reason you picked the wrong subject for your graduate
degree and you don’t want to have a career in that field. You want to change course mid-
way. An MBA may provide a bridge from where you are to the field of your choice.

f. Status: MBA from a good university looks great on your resume.

g. Entry Ticket to many organizations: There are many organizations (especially in the
management consulting world) whose doors are open almost exclusively for MBA grads
from top universities. If joining them is one of your dreams, you may be better off doing
an MBA.

h. Tune-up your purpose: You may have an idea of what you want to do in life. When you
meet a set of highly-ambitious people and hear them share their vision and purpose of
their lives, it may trigger you to “upgrade” your own vision and purpose of your life.

i. Safe Laboratory: It provides a safe and almost risk free laboratory for bouncing off your
ideas, testing them.

j. Access to thought leaders: You have chance to meet thought leaders, corporate
executives and visionaries who come and speak (mostly for free). If you connect with
them and build on that relationship, you have an unfair competitive advantage

From above mentioned reasons one can understand why an Indian gives so much importance
to MBA program. But since every year, large number of students opt for this course due to its
strong demand, B-Schools try to encash this opportunity by luring them with various source
of information and advertisement media. We have chosen this topic to find out what factors
does students consider while selecting a B-School.

On the other hand, this research will be helpful to management institutions to understand the
perspective of the students and can cater them accordingly which will help them to provide
quality education and create strong brand identity.

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3. Review of Literature

The purpose of our research is to determine the most influential factors which affect the
selection of a business school. To support the variables which have been considered in our
research we referred to some of the surveys undertaken by various rating agency and
business magazines. Following are a few of them.
a. AIMA "BEST BUSINESS SCHOOLS" SURVEY

In an endeavor to encourage management education in India and provide authentic


information to all its stakeholders, All India Management Association (AIMA) conducted
an annual survey on the “Best Business Schools” in India. The parameters on which B
Schools were rated mainly included:

 Intellectual Capital
 Admissions and Placements
 Infrastructure
 Industry Interface
 Governance

b. SURVEY by COSMODE in 1997

In May, 1997, BT commissioned Consortium for Strategic Management & Organization


Development (COSMODE), to design and execute a survey to rank all MBA institutions.
The model developed to evaluate B-schools has two analytical components: objective and
subjective. The former scores a school on internal parameters: the quality of faculty, the
students, and the curriculum; the infrastructure facilities; the number of applicants per
seat; and number of corporate recruiters. The latter captures the perceptions of recruiters,
faculties, students, and alumni. Each B-school was evaluated on an overall score of
1,000. The scores were assigned using the following criteria:

 Objective Score (400)


 Students & Faculty Profile & Curriculum (180)
 Library & Classroom & Residential Facilities (72)
 Admissions & Placement (148)
 Subjective Score (600)
 Recruiter Score (300)
 Faculty Score (150)
 Students Score (50)
 Alumni Score (100)

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c. MARY IPE, HRM Professor, IBS Kochi

The business school that you choose to attend will have a huge impact on your future and
your career. The task of selecting a business school has become more difficult from the
students' point of view because there are no standards or universally acceptable
parameters or criteria for ranking management institutes.

d. GMAC Survey

This survey mainly gives a global touch to our research. The survey is typically
conducted a few months prior to graduation; therefore, we can ask students’ about their
opinions of their education, and the value of their degree, how they chose their school
and whether they would recommend it to someone else, and what they intend to do with
their degree after graduation, among many other topics.
e. The MBA Guidebook

This document gives a very subjective view of the various factors affecting the decision
of a B school and has a global touch to it.

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4. Research Objectives

Research Question

What are the decisions making factors that influence students in selecting B-school?

Specific Objective
To analyze the most influential factors influencing selection of B-school and find out
what a management schools like IMT can do to improve its quality and image as per the
student’s preferences.

Hypothesis
H1: All the factors have the same influence in the selection of a B School.
H2: Placement is the most influential factor in selection of a B School
H3: Reputation is the most essential factor for consideration in the selection of the B-
School.

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5. Methodology/Research Design

a. Formulation of Research Questionnaire

We took a sample size of 8 students with a male is to female ratio 1:1 from IMT
Ghaziabad. We conducted a focus group discussion among them which lasted
around 1 hour and from the outcome of focus group discussion we formed a
questionnaire.
b. Sampling Plan

The sample size selected for this research included 80 respondents. Responses
were collected from students of different B Schools and people aspiring to do
MBA in the near future.
c. Sampling Technique

The sampling technique chosen during this survey was simple random sampling
which included responses from male as well as female.
d. Preliminary Analysis and Data Preparation

After the data was collected it was checked, validated, edited and tabulated in
Excel sheet and from the excel sheet data was imported to SPSS.
Analysis of data was done using statistical tool- Factor analysis using SPSS
software and excel. A detailed report is prepared on the basis of analysis of data
collected.
e. Nature of Research

We conducted an exploratory research by preparing a questionnaire which listed


many variables which could answer our research question and help us to
determine the major factors which have an influence on the choice of student
selecting a particular B-school. As mentioned above we formulated the
questionnaire using the focus group discussion.
f. Type of Research

For the study we first conducted a qualitative research with the focus group
discussion and on the basis of that discussion we formulated a questionnaire and
after that we did quantitative research using that questionnaire. Qualitative
research focuses on gathering an in depth understanding of human behavior and
the reasons that govern human behavior. It analyses how and why a decision is
made rather than investigating what, where and when it is done. The quantitative
research methodology measures the knowledge, opinions and attitude of a person.

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Such methodology answer questions related to how much, how many, when and
who.
g. Mode of Research

For studying and analyzing this topic we have done primary research. However
for the literature review use of secondary data was made.

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6. Data Analysis

Data from the sample size of 82 people was collected based upon 15 variables and factor
analysis has been used for analysis of the data. To justify the selection of Factor analysis, we
did Kaiser-Meyer-Olkin (K.M.O.) & Bartlett’s test of sphericity. The data sheet has been
provided separately.
a. Cronbach’s Alpha Test

Alpha coefficient ranges in value from 0 to 1 and may be used to describe the
reliability of factors extracted from dichotomous (that is, questions with two possible
answers) and/or multi-point formatted questionnaires or scales (i.e., rating scale: 1 =
poor, 5 = excellent). The higher the score, the more reliable the generated scale is. 0.7
is an acceptable reliability coefficient but lower thresholds are sometimes used in the
literature.
The Cronbach’s Alpha value comes out to be 0.791 which proves the reliability of
variables derived from summated scales.

b. KMO and Bartlett's Test

Here the value of KMO is 0.712 which is greater than .50. It means that sample is
adequate & Factor analysis is justified as a multivariate analysis.
Through Bartlett’s test we check whether correlation among independent variables
exists or not. In this case, significance value for the variables is 0.00 which is less
than p- value of 0.05. Hence, there is high correlation among independent variables.

c. Total Variance Explained

The factor analysis is based on five factors, because five factors have Eigen values
greater than one.
d. Rotated Component Matrix

Component 1 includes Collaboration with international B Schools, Industry interface


and Research work & Study material provided.
Component 2 includes Ranking, Friends & Peer group, Placement record and
Alumni network.
Component 3 includes Infrastructure & other facilities, Years of existence and
Academic experience of faculty.

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Component 4 includes Financial cost of course, Scholarships and Affiliation to
AICTE, UGC etc.
Component 5 includes Advertisement and Geographical location,

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7. Analysis & Interpretation

The 5 predominant factors taking the mean value of the survey response into
consideration that influences the selection of a B school are as follows
 Placement record
 Ranking
 Infrastructure
 Industry interface
 Alumni

The 15 factors taken into consideration in our survey have been broken into 5 key factors
through the Factor Analysis.

Factor 1 Factor 2 Factor 3 Factor 4


Factor 5
International_ Collaborations Ranking Faculty Financial_ cost Advertisement
Industry_ Interface Peers Infrastructure Financial_ aid Location
Placemen
Research Year_Existence Affiliation
t
Alumni
Table 1. Grouping different attributes under factors.

The different attributes captured through the questionnaire have been grouped under the
following factors.
a. Credibility which then forms the first factor comprises of Research work done in
college, industry interface, and international collaborations.
b. Reputation which is the second factor comprises of Ranking, Peer group,
Placement & Alumni.
c. Facility is the next important factor which comprises of infrastructure, faculty,
and years of existence.
d. Value for money which comprises of financial cost and financial aid provided.
e. Awareness is one the factor which comprises of advertisements and location of
the college.

The above mentioned 5 factors have been ranked on the basis of the mean values .This
ranking is in the decreasing order of influence on the selection of a B School.

 Reputation

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 Facility
 Value for money
 Credibility
 Awareness

Now following table summarizes the comparison of our actual findings with previously
set hypotheses.

Sl. No. Null Hypotheses Actual Findings


1 H1: All the factors have the same influence in the selection Rejected
of a B School.
2 H2: Placement is the most influential factor in selection of a Accepted
B School
3 H3: Reputation is the most essential factor for consideration Accepted
in the selection of the B-School.

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8. Conclusion

The five factors identified through factor analysis provide an insight into the attitude of
MBA aspirants which influences selection of B-schools. MBA seekers give importance to
ranking and placement assistance provided by the colleges. So, management schools have
to ensure 100 percent placement assistance ship and a strong brand reputation by being in
top list of colleges. The institution should provide better facilities to students in form of
better infrastructure and faculty. The value for money proposition is also a major factor.

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9. Bibliography

a. www.pagulguy.com
b. http://www.careerlauncher.com/mba/about_mba/choosing_good_bschools.html
c. http://www.foreignmba.com/article.php?id=94
d. http://www.bschool.com/choose.html
e. http://www.time4education.com/Select_a_B-School.asp
f. http://www.sbir-georgia.org/2008/07/criteria-for-choosing-b-school.html
g. http://www.mbapursuit.com/nine-points-to-remember-while-choosing-a-b-school-
international
h. Marketing Research book by Naresh Malhotra.

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10. Appendix

a. Questionnaire

Please respond to the following questions keeping in mind, factors affecting your decision in
selecting a B- school
Please rate the following statements on a scale of 1-7 –> One being least applicable and 7
being highest

Statements 1 2 3 4 5 6 7
1 Do advertisements of B-school affect your decision?

2 Does ranking of a b-school affect your decision?

3 Does geographical location of a B school impact your


decision?
4 Do friends and peer group influence your decision?
5 Does infrastructure and facilities provided by B school
influence your decision.
6 Does the number of years of existence of B school influence
your Choice?

7 Does the academic experience of faculty influence in selecting


B-school.

8 Does placement record of b-school influence you?


9 Do the positions of b-school alumni influence your decision?
10 Does the financial cost like fees affect yours decision for
selecting your b school?
11 Does certification and affiliations with boards like AICTE,
UGC influence your decision
12 Does financial aid provided by B-school influence your
decision?
13. Does collaboration with international B-schools influence your
decision?
14. Does industry interface affect your decision in selecting a B
school?

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15. Does the research work done and the study material provided
by b-school influence your decision.

b. Factor Analysis – Options Used

Method of Factor Analysis: Principal component analysis


Details of Descriptive
 Initial Solution
 KMO & Bartlett’s test of sphericity.

Details of Extraction
 Correlation matrix
 Eigen values
 Unrotated Factor Solution
 Scree Plot

Details of Rotation
 Varimax
 Rotated Solution

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