Is the IIM PGDM Program Useful for Family Business Heirs?

According to legendary management scholar Dr. Peter F. Drucker, managing a business entails efficiently serving customers with profitability at the core. In a business enterprise, there are various roles: owners, shareholders, managers, administrators, and workers. At a basic level, managers can be broadly categorized into three types:

Types of Managers

Managers who manage others' resources. Managers who own their resources but manage passively. Managers who own their resources and actively engage in day-to-day management.

Young, driven individuals, like you, most likely fall into the third category. Many management programs in India, especially those at the Indian Institutes of Management (IIMs), were originally designed to produce managers of the first type. Beginning in the 1960s, the economy was heavily regulated, known as the License-Quota-Permit Raj, and managers from IIMs were typically viewed as resource managers. As the Rao government initiated economic liberalization reforms in the 1990s, India began to foster its free enterprise generation. However, the IIMs were slow to adapt, and their PGDM courses were mainly structured to teach pure resource management until well after 1991.

The MNCs appreciated the abilities of Indian B-school graduates, who were keen, smart, and easily motivated without ownership shares. Prestige and other social perks were additional benefits of being an IIM graduate. Employee Stock Ownership Plans (ESOPs) and other modern compensation initiatives came much later. Very few family business heirs would benefit from these programs, leading to the rise of Family Managed Businesses (FMB) MBA programs in the early 2000s.

Learning and Prospects for FMB Heirs

If you are part of a family that runs a significant business, an MBA program can provide a wide range of learning opportunities. A combination of Finance and HR can be particularly beneficial if you plan to expand and scale your business. For more mature and large-scale businesses, consider specialized MBA programs focused on your industry.

The Benefits of an IIM PGDM for FMB Heirs

Exposure to novel and innovative ideas. Networking with a diverse group of highly talented individuals. Conceptualization of new business ideas that can propel your family enterprise forward.

Considerations for Choosing an IIM PGDM

Given the evolving nature of these programs, some of the newer IIMs may not currently add significant value. These institutions may lack cutting-edge faculty and are located in remote areas. It might be wise to look beyond IIMs for now and explore other educational opportunities that better align with your goals.