the starting, growth and opportunities of business education in nepal has been explored from the perspective of an educational professional

1. Management Education in Nepal: Industry-Academia Gap
Kapil Deb Subedi1
Introduction
Globalization, privatization and liberalization policies adopted by the countries around the world
has not only the impact on the world economic order it has direct relationship with the
emergence of multinational corporations and their aspiring needs of qualified and competent
human resources who have been graduated from management colleges. The changing face of
global business demands highly qualified management executives to deal with rapidly changing
business environment of modern corporations. The changing scenario of world economic order
demands more management graduates hence thousands of management colleges and B-schools
have been established during past two decades producing graduates at an amazing rate. The
global market of management education is estimated to be of USD 25 billion in 2011 AD and it
has been growing at a rate of 10 -15 % per annum. But the pertinent question is how far the
business schools are teaching their students? Whether the academic knowledge provided by
management colleges find the practical solutions to real life problems faced by business houses?
A gap between the Management Education provided by the Colleges and the actual expectation
from the corporations is the pertinent question that need to be solved for better placement of the
graduates and sustainable development of the corporations.
What should be the qualities of management graduates? Certainly they should be enriched with a
combination of knowledge, skill, attitudes and ethical values which would enable them to lead a
proper professional, corporate and socio-economic life in business and society. But our
management graduates are lacking these qualities and management colleges are producing just
the quantity of graduates not considering the quality aspects of their students. Many scholars
point to the gap between theory and practice, arguing the knowledge delivered by the business
schools relates poorly to practitioners’ needs. And if this gap is a persistent feature of higher
education, it may be a mistake to think we should make it go away. Management is the very
antithesis of a professionalized practice. Many writers, including Mintzberg (1976) and Hatch et
al. (2005), suggest management is also an art form. While it has creative and aesthetic aspects,
we should take this to its logical conclusion. Then we are at the real heart of the matter –where
we can question our blind commitment to the rational decision-making model.
Managerial practice is seldom conducted under conditions of perfect information as we presume
in our theories and classrooms. Even if a body of rigorous knowledge existed, there would be
problems relating it to the circumstances under which managers actually work. Simon (1947)
told us this nearly 60 years ago and we have not done much about it. We continue to teach and
theorise as if managers operate under conditions of certainty. It is this assumption, clearly
unwarranted, that drives the deepest wedges between our teaching and their practice as Ghosal
(2005) suggests bad management theories are destroying good management practices.
1
Mr Subedi is the Head of Department of Management Studies in Saptagandaki M.Campus

2. Management graduates need the knowledge acquired through the case based study of real life
situation. Only the academic and conceptual knowledge acquired from class room teaching is not
sufficient for a management graduate to handle our businesses which are facing tremendous
challenges each and every day. Management education is the combination of three ‘Ts’. They
are teaching, training and transformation. But the management colleges toady only perform the
task of teaching and they disregard ‘training’ and ‘transformation’. Therefore, corporations
themselves are also launching more formal training programs for developing their managers.
Despite all these facts, global markets for management education are growing day by. The
United States is the largest market for business education. Thousands of B-schools in US provide
the management education especially MBA dominating other countries in terms of ranking and
market share over the last fifty years. In India, it is over half a million students who attend the
various national admission tests to get enrollment into Management colleges for MBA. More
than 50% of them are engineering background. The maximum candidates aspire to get admission
into the Indian Institute of Management (IIMs). The six IIM’s in the country together, have a
limited number of seats, but they attract maximum number of applications which are five to six
times more against the number of seats available.
In Nepal, Management education was introduced in the year 1954 to cater the needs of trained
manpower to banks, government agencies, industrial and commercial sectors in general.
According to Govinda Acharya former Dean, FOM, TU, ‘Tri Chandra College, established in
1918, affiliated initially to Calcutta University and later to Patna University is privileged to
launch academic programs and set the record of beginning of modern higher education in Nepal.
The pace of development of the then higher education was slow because of the beliefs that it was
meant specifically for few privileged ones. After the advent of democracy in 1951, the then
prevalent notion changed, and a number of public and community colleges emerged. The need
for emergence of commerce education was felt during this period and hence initiated in
September 1954 (Bhadra 17, 2011 B.S.). Tri Chandra College, the first college of the country,
launched the Intermediate of commerce (I.Com) and Bachelor of Commerce (B.Com) programs
in the beginning. Started initially with 27 and 4 students respectively at I.Com and B.Com, it
gained popularity in a short span of time luring other colleges to start those programs as well.
Public Commerce College (Kathmandu), Nepal Commerce College (Lalitpur), Thakur Ram
College (Birgunj), Mahendra Morang College (Biratnagar) remained some prominent colleges to
name in this context. Commerce education, one of the youngest disciplines in the context of
Nepal, had its master level program; Master of Commerce (M.Com), in 1960 only after the
establishment of Tribhuvan University (TU).’
At present, there are four universities in Nepal, offering business graduation courses.
Kathmandu University is the first one introducing BBA and MBA product in Nepal , after that
Pokhara, Purbanchal and Tribhuvan University also offered these courses. Meanwhile,
Tribhuvan University is the oldest university in Nepal offering business graduation courses. In
the early years of management education, B.Com. and M.Com. Courses which more or less
followed the course of Indian universities’ prototype were run by TU in Nepal. These courses
highly focused on functional management specialization catering the need of suitable employee
in government and business organizations. Later these courses were renamed as BBS and MBS

3. by TU with some modification. At present, masses of students are enrolled in these courses all
over the country. Thousands of students have been graduated annually from TU in management
courses as shown by the table- 1 below. The management graduation output is in increasing trend
in other universities viz; Pokhara, Kathmandu and Purbanchal Universities over the last period.
Table-1. No. of Management Graduates produced by TU in different academic year
Sn Progarm 063/064 064/065 065/066
1 Bachelors 6799 6187 9326
2 Masters 1636 1110 2360
3 M.Phil Na na Na
4 Ph.D 5 4 4
Source Economic Survey-2010
Now the demand for management education is growing day by day in Nepal as the new
liberalized policies adopted by the country has promoted the different sectors of economy to the
blossom, specially the service sectors including banking, communication, hotel, tourism and
financial service industry has grown over its size and quantity demanding skilled business
graduates for fulfilling their expanding business activities. Skilled management graduates are
offered the jobs in national and international corporate sectors hence business education has been
popular among the youths in Nepal. To catch up this reality, a number of business schools have
been established and run in Nepal in the affiliation of national and international universities. The
universities from UK, USA and other countries are expanding their market into the country by
offering their business graduation courses for thousands of Nepalese students. Table 2 shows the
growing trend of students’ enrollment in under graduate and post graduate level management
courses in Nepal.
Table-2 Student enrollment in management courses of TU during 2060 to 2064
year Proficiency Bachelors Masters Total
2060 53238 70856 13212 137306
2061 47661 76427 15076 139164
2062 42056 94795 17107 153958
2063 36481 98222 19090 153793
2064 30240 110191 20844 161275
Source- Office of the Controller of the Examination, TU
A question of quality
The management colleges in Nepal are diversified in terms of their ownership, university
affiliation, infrastructure and many more including TU constituent campuses, community
campuses, KUSOM colleges, and other private colleges offering management courses in
affiliation from different national and international universities. Until recently, the top
management colleges including Kathmandu University School of Management (KUSOM) have
been looked upon as role models for the rest; however a number of management colleges are
striving to create their own innovation niches. Some colleges established by professional and
academicians in Kathmandu valley and other urban cities of Nepal have shown their early sign of
excellence in quality par to the standard of abroad universities. However, a broader policy

4. concern relates to the apparent paradox between excellence and equity. To identify the best
academic institution, one needs to consider several criteria. No institution may have an absolute
advantage in everything; therefore it is important to encourage the development of comparative
advantage of each management college by recognizing the value of their self-defining academic
initiatives. Considering the fact that there are many parameters in making comparisons across
management colleges, there are some universal yardsticks for measuring quality in business
education. Some of them which are universally applicable are: (1) Students intake (2) Teaching
methodology (3) Placement rate (4) Publication and research and (5) Physical investment.
The intake of students entering to management colleges determines the performance and
placement of management graduates. It is mandatory to attract brilliant minds and talents to
management education if it has to excel in leadership development and successful running of
giant multinational corporations. Currently, getting accepted into a well-regarded Business
school is seen as very attractive career. In neighboring India, IIMs have been ranked at the top in
several surveys of management colleges in Asia-Pacific region, and admission to any IIM is seen
by most as a passport to a fast track career at the national and international levels. Each year
about 100,000 aspiring candidates take Common Admission Test. Of these only 1,100 get
selected through rigorous entrance procedure. Thus admission standards are very high for getting
through the IIM’s. Consequently it has been a number one institution in management education
in our region.
Despite some colleges have sparkled the bright symptoms of producing quality management
graduates in Nepal, many of the management colleges does not have infrastructure, long term
vision and well trained faculty which is also not encouraged in terms of research work or
publication. Many colleges are being founded by influential people by lobbying with political
parties for university affiliation and they are run to make substantial profit for the promoters.
Teaching methodology aspect should be very strong in management education since the
functional business and management concepts require to be translated into real life situation by
the graduates. Rigorous use of case methods, frequent training programs and management clinics
are the part and parcel of management teaching method. Unfortunately the Nepalese
management education institutions have not initiated these practices till the date. As a result of
which the quality of education is not encouraging and such Management colleges are unable to
meet the requirements of the corporate world and hence the percentage of placement of
Management Graduates is disappointing. The publication is the forum where faculties share and
discuss their experiences and put empirical studies conducted in the field of business and
management. Unfortunately, we have not such tradition for publication and it is not mandatory
for faculties to get publication for their career concern. It has hindered the academic exposure of
our faculties in international arena submerging our faculty development initiation. Lacking all
these attributes by our management colleges has built a gap between the industry and academia.
Corporate expectation
Business schools have been charged with doing a bad job of meeting the needs of their industry
for effective education and relevant knowledge. With respect to the research contribution of
business schools, although much is occasionally made of the influence of academic financial
research – the capital asset pricing model and the theory of efficient markets – on financial

5. practice, this example is more the exception than the rule. A study of the business idea
marketplace concluded that ‘most business schools have not been very effective in the creation
of useful business ideas’ (Davenport et al., 2003). Even people such as Robert Kaplan, former
dean of the business school at Carnegie Mellon have argued that business school research and
teaching have contributed very little to recent developments in the world of business. Business
schools have been accused of doing a poor job of educating and preparing their students and a
poor job of producing research relevant to the practice of management
Management colleges are expected to provide knowledge, skill, attitude and ethical values to the
students making them capable to foresee risk and uncertainty, scan the complex business
environment and convert it to the profitable opportunities, and to play with team for positive
outcome. “Knowledge” enables them to understand what they learn in relation to what they
already know, and creates an ability to generalize from their experiences. “Skill” takes them
beyond merely understanding and enables them to put their knowledge to work. “. Attitude and
ethical values are expected from graduates in terms of increasing corporate social responsibility
in the field of business and management. What a corporation expects from the management
graduate is shown in figure-1. However, many of the educational institutions hardly pay any
attention to the development of students and their ability to apply their knowledge to the real
world. They pay attention to inculcate theoretical, conceptual and curriculum based subject
matter so that higher percentage of students could pass in exam, beyond this they have no further
responsibility. They miss in inculcating the ability to apply conceptual knowledge to the real
world. The graduates leave the college with a degree of management, but they are unable to be
transformed into management leaders who meet the requirements of the industry.
Figure-1: Corporate expectations from Management Graduates
Source; Sheoliha-2011
Corporate
requirement
Self
confidence
Conceptual
clarity
Drive to
succeed
Knowledge of
business
environmet
Inerpersonal
skill
Management
skill
Knowledge of
management
function
technical
skills

6. Issues and Challenges
The challenging issues and the factors responsible for the quality of the Management Education
in today’s competitive environment are as follows:
1. The faculties engaged in management colleges are detest from creativity in teaching and
they are lacking the publications and research. The faculties are underpaid and they run
after three to four colleges each day for solving their livelihood problems. These entire
factors are hindering the faculties from overall development of their career and they are
not making the students abreast with the latest trends. Hence, the quality of the students
remains undernourished, which in turn results in poor placements. Imparting education is
a noble job but unfortunately some colleges have made management education a channel
for earning huge profits.
2. Industry academia gap is the second most embarrassing challenge faced by the
management education industry today. The graduates produced by the colleges are not
meeting the need of industry in term of their relevancy. Most of the graduates have to be
re-trained by the companies which are costlier to them, thus leading to wastage of time
and resources and above all giving negative impressions to the employers. Graduates
possess the conceptual knowledge and theories which fit into perfect competitive markets
but in real world they have to work in imperfect market and real life situation where they
are unable to implement those theories and concepts. It has ultimately threatened the
management education industry for its sustainable growth.
3. The third issue is the examination system followed by the universities which are unable
to testing student’s real capability since the system involves a lot of subjective answers to
be written within a specified time period, for example within three hours at the end of
academic year. By such system, students become good at cramming but do not develop
an understanding of the subjects matter. Rigorous group discussion, case studies,
presentations and field based exercises with frequent and routine caliber testing system
will enhance the quality of management student which is lacking in current education
system.
4. The provision of Quality Accreditation and Assurance in management colleges is the
primary need for focusing the quality. The system has been initiated by the UGC but
colleges are not interested in entering this provision for measuring their strength and
weaknesses. The governance, transparency, quality, public relations, publication and
placement are the major area of judgment for measuring the overall assessment of an
educational institution under QAA provision. If the management colleges are to survive
for long to their mission they have to be judged themselves by such provision.
5. Some colleges have shown early sign of producing quality manpower suitable to fit the
requirement of corporations. For this they need to assign their students for internship into
the corporate world. But there is always a complain made by colleges that business world
is not providing sufficient assignment to their students for internship. If such situation
persists, the question of quality gets even more deteriorating in days to come.

7. Filling the Gap
Management colleges are not able to produce the graduates coping the need of corporations. In
one hand there is over supply of management graduates and in other, the corporations’ demand
has not been fulfilled by the existing human resources. This is the hard reality faced by our
system. To fill up this gap, the initiation is needed from the part of academia as well as from the
side of business community. Basically the following are the major points to be considered;
 Management Education should not only focus the pass percentage of the students but also
it should match the expectations of the corporate world. To fulfill the same, the
management colleges should focus on academic as well as the holistic development
programs of the students. Instilling the management knowledge and skills into the
graduates is the primary task of the colleges; simultaneously they should focus on
training and research to solve problems enduring practical importance and to build such
curriculum that can actually prepare students to be effective in practicing the profession.
 Management is an applied subject. Students should be given an exposure, so as to
simulate the reality by giving the case methods in class and examinations. The inertia of
theory teaching by colleges should have prompt paradigm shift for better outcomes.
 Selective student intake and standard of admission test should be forcefully applied. As
Harvard and Cambridge universities carry high reputation because of their high
admission standards that ensure only bright and best students to join. Management should
not be the subject accessible to all after discarded from medical and engineering entrance
test. There should not be any bias towards quantitative testing but should emphasize on
nurturing skills. Also institutional governance must ensure objectivity in selection.
 Faculty development program should be initiated. Faculties should be given facilities for
case development, research and publication to enhance their skills to impart their
knowledge better.
 Provision of QAA should come up and it should fully implement so as that the
management colleges are forced to maintain the transparency regarding the faculty
strength, their qualification, research publications and infrastructure details which could
include library, computer access to online journals, conference hall, research
management cell, play grounds etc.
 Attracting, retaining and ensuring the qualified faculties should be the prime focus of
management colleges. Similarly developing and implementing the short term but
practical courses to meet the human resource requirements of different sectors
and seeking collaboration with reputed institutions to twin the program and faculty
exchange help management colleges to compare them into the standard of international
arena.

8.  Last but not the least, to give management education a quality that has to be taken care
off right from the scratch, that the students selected for the course should carry an aim &
a fire in the belly rather than just coming for a degree to enhance their Bio data.
Conclusion
Management education in Nepal has initiated to take a responsibility for producing human
resources required by corporations in a highly competitive market. Globalization of business and
intense competition for scarce resources, market and costumer has reshaped the traditional
economic role of corporations which ultimately has enforced the management colleges to
develop the management leaders with the global orientation having high ethical and social
considerations. However there is a huge gap between the current academic practice and business
reality. Business world is facing a lot of challenges after the world financial crisis. European
recession, surge of fuel crisis, collapse of subprime mortgage markets, and many more have
forced to reshape the corporate world to shift their strategies and it has direct impact upon the
courses and curriculum of business schools. The business schools should focus more on research
and innovation to meet the changing need of business community. They should provide the
human resources with innovative knowledge, creative thinking and team playing capacity which
can navigate the crew of business in vibrant and dynamic hurricane.
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