KARACHI:
If you ask a random group of undergraduate business students which academic programme they are enrolled in, chances are that an overwhelming majority will say Business Administration, the certification for which is commonly known as a BBA degree.
For consideration, in its most recent convocation for PhD, master’s and bachelor’s programmes, the Institute of Business Administration (IBA) – which is ranked by the Higher Education Commission at number two among Pakistani business schools – awarded 48% of all graduating students with a BBA degree. Similarly, the share of BBA graduates at IBA in the batches of 2010 and 2009 were 44% and 37%, respectively.
Likewise, about 32% of the 983 candidates who received their bachelor’s, master’s or MPhil degrees in Institute of Business Management’s (IoBM) most recent convocation belonged to the BBA programme.
As it becomes evident that BBA students form the largest chunk in graduating classes of major business schools annually, the question arises as to how much money these institutes make by churning out BBAs in droves every year.
Going by the number of BBAs produced over the last three years by leading business schools based out of Karachi – and relating them to tuition fees listed on their respective websites – it is clear that BBA programmes are a major source of revenue for these not-for-profit educational institutes.
Between IBA, IoBM, Shaheed Zulfikar Ali Bhutto Institute of Science and Technology (Szabist) and the Karachi University Business School (KUBS) – arguably the most prominent among all business schools in Karachi – the highest per-semester fee is charged by IBA. According to the fee structure available on its website, IBA charges BBA students Rs114,200 per semester.
Interestingly, IBA’s fee is four and a half times the per-semester fee charged by KUBS, which was established in 1999-2000 after IBA – till then a part of the University of Karachi, which is also the parent university of KUBS – received the status of an autonomous degree-awarding institution. Fees for the KUBS BBA morning programme is Rs25,155 per semester; while it stands at Rs27,000 for the KUBS BBA (evening) programme.
As for IoBM and Szabist, differences in their tuition fees are not as significant. While IoBM charges BBA students Rs73,000 per semester, the per-semester tuition fee for Szabist is Rs77,400; reflecting a difference of about 5%.
However, if compared to Szabist, IoBM makes more than double revenues through its BBA programme despite charging a relatively lower fee. For instance, 318 students graduated from IoBM in 2011 with BBA degrees. If calculated in nominal terms – ie without taking into account admission fees, examination fees, convocation fees, scholarships or any changes in the tuition fees – IoBM generated total revenues of Rs185.7 million in four years from all BBA students who graduated in 2011.
The corresponding figure for Szabist – disregarding additional fees, scholarships and changes in the fee structure during the course of study – comes to around Rs76.1 million, as the total number of BBAs produced by Szabist in 2011 was 123.
Therefore, despite charging a lower tuition fee compared to Szabist, IoBM managed to generate 144% higher revenues because of a higher number of BBA students, according to the nominal calculation based on the publicly available fee structure of these universities.
As far as IBA is concerned, not only does it charge over 50% higher tuition fees than IoBM or Szabist, a considerable number of BBA students have graduated from the oldest business school of Pakistan in recent years. 294 BBAs from IBA entered the job market in 2011 only.
Going by a nominal calculation based on the number of BBA graduates and the official tuition fee, IBA made about Rs268.6 million in four years from students who completed their BBAs in 2011. The IBA revenue figure is 44.6% and 253% higher than those of IoBM and Szabist, respectively, as per the nominal calculation based on the latest fee structure.
Another notable phenomenon is the rate with which our leading business schools are increasing the number of BBA seats in recent years. IBA increased its BBAs from 169 in 2009 to 294 in 2011, an increase of 74% in two years. The corresponding increase in the number of BBA graduates at IoBM over the same period was 13.5%.
It is surprising that Szabist has kept its student output in the BBA category consistent of late. The number of BBA graduates of Szabist was 123 in 2009, 98 in 2011, and 123 in 2011.
When The Express Tribune asked the Szabist spokesman why it did not increase BBA seats over the last three years like other leading business schools he stated that the figures reflected BBA graduates produced by the Karachi campus only, adding that it was just a coincidence that the number of seats has stayed constant over the last three years.
WITH ADDITIONAL REPORTING BY NOMAN AHMED
Published in The Express Tribune, July 2nd, 2012.
COMMENTS (15)
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The figures are miss leading, lack of proper research.
While making the analysis, the author has assumed that student fee is being used by institutes to churn out profits. I can't state about others but I would encourage the author to read the annual reports of IBA, Karachi. These can be found at http://www.iba.edu.pk/News/ibaannualreports.html. The said reports will highlight sources and uses of fund. One should see what proportion of current and capital expenditure are being met by the fee.
Also, since tuition fee has been compared for the last three years. Please see Strategic Direction of IBA 2008-13, which was laid down by the existing dean and director. These can be found at http://www.iba.edu.pk/News/Strategic_Direction.html. The documents will further elaborate the context of fee increments.
I hope these clarify your misunderstandings.
Poorly written! I wonder how this even got published
I like the article. Business schools are in the business of producing business clerks. Arrogant youngsters who believe that they are the best lot and should be sold at the best price as finance managers, brand and marketing manager. These business schools are not producing entrepreneurs to turn the economy around, to produce employment and generate income.
I feel sad for the fact that people here are pounding on the poor author for a work of reasonable quality. Having said that, I would love to see an evolved version of this article with estimates on internal cost structure of these institutions, net profitability, job placement patterns, and return on investment in business education in the short and long-term (5 to 10 years after graduation).
E-Tribune u never fail to surprise me with such gems....What a crap article!
IBA charges more, but their grads also have chances of better opportunities compared to other business schools.
There is a very high difference between grads of a top school and others. Not trying to be arrogant, but that is how it is. It starts from the entry critera, where better students end up in IBA, LUMS or NBS in Khi, Lhr and Isl, those leftover then move to the 2nd tier such as SZABIST, LSE or Bahria where admission criteria is relatively relaxed compared to the top tier schools.
After that, the top tier has access to better facilities, better faculties and stronger alumni networks and better networking opportunities for the students as compared to others. So, eventually all this translates into better opportunities for grads of say IBA.
These are simple facts, things are not equal, its competitive, study harder kids if you want in on the top tier schools.
Mr. Kazim.. kindly tell me which szabist campus charges 77400 pkr per semester for BBA??? during my two years at szabist BBA i have paid 100,000+ for a normal load and standard semester load...
Mr. Kazim kindly go through the fee structure of szabist for BBA n IoBM for BBA... please... considering the education recieved at IBA hte fee is quite nominal.... I had a fee bil of 108000 for szabist BBA exc admissions back in 2009, as compared to 107000 of IBA.. both the offers I had kept as secondary than going abroad
I would request ET to please verify the figures before posting such an article. Figures are repeatedly misstated in this article.
There is no research on the expenses side...The article would have been interesting if "analysis" would be the profit earned by the universities and taxed saved/exempted.. Just by visiting 4 university websites and calculating there estimated revenues doesnot make any sense..
The Question is not how many graduates are being produced but what are they doing after graduation. A more sensible approach would have been to find out hwere the classes or 2009, 2010 and 2011 are currently employed, avg pay structure and how many are doing MBAs.
Also if the wheels of the economy starts churning again we will need a lot more 'Quality' business gradautes than the one currently being churned out the IBAs. IoBM's, SZABIST's, etc.
More interesting stat would be cost of business degrees vs. Income of grads
@ammar: This is good article for the students who want to get admission, and we should encourage our writers, well good research article indeed.
Stupid article, without any sense, who cares about how much money these business schools make, and joining these business school is not a compulsion, a good waste of time preparing for this article....