I have a lot of regard for students from Indian Institute of Management. My regard is however restricted to students from A, B and C intitutes because I have not met/spoken to folks from other IIMs.
Preparation for IIMs start almost as early as preparation for US Bschools. I joined IMS in May. This time is just about right to start preparing for IIM. I started taking full exams during August. A lot of time is required to prepare for this exam. If you are busy at work, then that becomes an excuse to not do well in CAT. There is no point bitching you were busy. That does not show in the CAT marksheet. A percentile is the only number that comes up. So if that number aint good, nobody but your grandma will be interested in listening to your sob stories as to why you didnt get into IIM.
1) The objective tests are (almost) everything as far as IIMs are concerned. It is just a data point for US Bschools. You can do bad in GMAT and still get into Harvard. In fact HBS did not accept GMAT scores until 6-7 years ago.
2) The top 10 US Bschools admit close to 3500 students among 70000 applicants each year. I think around 10 of the admitted students (at maximum) will be freshers (people who join immediately after undergrad). This is NOT 10% but on total just 10 students. Even 10 is like an exagerated number. It may be less than 5 students overall for most years. Even these students would have done something remarkable as starting their own company while at undergrad to get in. IIM (A, B, C) admits close to 600 students out of 150000 applicants. From talking to friends, I believe at least 100 are freshers (again both numbers are just educated guesses at best ... but I think you get the point). If you are a fresher and for some odd reason you think that you "know" that you have to get an MBA (Why you think so? is another question altogether) you are better of applying to IIM than US BSchools.
3) US Bschools extensively test maturity, team work , leadership and career progression. IIMs, could ask pointed questions about this if you get to the personal interview stage, but otherwise I believe they do not focus much on such aspects.
4) If you are someone who looks for diversity in class, in terms of student population from various countries, IIMs may not be the place for you.
5) If you are looking for employment in prestigious institutions in India, IIMs are the best option. If you are looking for global options then both IIM and US Bschools offer equal opportunities.
6) if you are looking for specialized training in Entrepreneurship and Venture Capital kind of niches -- IIMs are not the place. Many ex-IIMs and ex-XLRIs do another US MBA if they discover later in life that they want to be an Entrepreneur. Harvard and Stanford are probably 2 schools where you can end up starting a company while at school. I do not think many other schools can claim to consistently have such a reputation. I think this aspect is non-existent in IIMs (barring a few students who started coaching class institutions)
7) IIMS are not expensive and the fees is probably 1/10th of what you would pay in US BSchools.
These aspects should give you a fair idea as to the nature of the two schools and their expectations. Your situation and your ambitions predicts which of the two options are better for you. Except for few aspects it is not wise to to objectively try and determine which of the two options are better. My personal opinion, I have never been comfortable with IIMs taking campus freshers. In fact I am completely against MBAs for people with no industry experience. In my previous work place we had IIM graduates falling in this category who had no clue about the industry or what they wanted to do in life. They were smart enough to pick up stuff along the way but they would have been 'relatively' better off had they known what they want in life before they joined B School. I have also heard ex-students say that it is the students that really make IIM look good. This is something that I agree with wholeheartedly. Some of my younger-year mentors were IIM graduates. A lot of them are simply brilliant analytical-ability-wise. The good thing was - they themselves are sometimes frank in admitting that other soft-skill and maturity aspects aren't strictly evaluated by IIMs. The 3 or 4 people I spoke to did not feel that IIM had a unique culture and did not feel their personality went through a radical transformation during B School life.
This is a new and upcoming institution, which I researched for a quite a bit before deciding not to apply because it did not fit with my personal aspirations. It offers a 1 year course and costs 16 lacs. The value of an MBA course is determined by the quantity and quality of recruitement statistics. ISB is well on the rise as far as recruitment and recognition is concerned. But as far as I am concerned they ain't there yet. Their preference for both GRE and GMAT score concerns me. High cost and millionaire-kids-school was something that concerned me when I thought of applying. The latter may not be true as I know some students coming from middle class background who have actually got in.
The good thing is this intitution has support from leading US Bschools. Follows an application approach similar to US BSchools. This approach is in my opinion much better than the ones that the IIMs follow. I am not suggesting that ISB has better students compared to IIMs. It is just that IIMs will be better off stopping the CAT and coming up with a more mature evaluation process.
The CAT Exam:
I totally disrespect this exam. I do not think high about anybody purely because they cracked CAT. In a work situation it does mean much. IIM students are good because a big chunk of them who cracked this exam were also good self-starters. That they were also self-starters is a happenstance not a causality of doing well in the CAT.
To me, a MBA graduate needs to have a certain amount of analytical skills. Skills good enough to do his/her job. But it is complete nonsense to think analytical skills are the only aspect of the job. GMAT tests the analytical requirement adequately. There is no need for a "tougher", complicated and absolutely crazy test to evaluate a person's analytical ability. Doing fast math will not help anybody run a company, start a business or even push a team to be successful. Nobody invented a business idea by computing stuff rapidly. There is a correlation of r= 0.6 :-) between analytical ability and how a person would be successful post MBA. Team work, Demostrated Leadership potential, personality, maturity, clearly thought out ambitions are better indicators (r = 0.99) of post-MBA success than a silly math exam.
Does this prevent good candidates from entering IIMs. Most certainly yes! I have seen very good leaders, ambitious smart people who would have made excellent future business leaders not get into IIM because they couldn't do math as fast as a fresh grad from IIT. IIM has missed out on people big time.