The Ford Foundation was created in 1936 by Edsel Ford (1893-1943), the only child of Henry Ford (1863-1947), as a non-profit organization for public welfare, with a gift of $25,000. For the first decade, its activities mainly revolved around Michigan, USA, where Ford Motor Company (estd. 1903) was based. Following the death of both Edsel and Henry Ford in the 1940s, the Ford Foundation became the largest philanthropy in the world due to their bequests.

The Ford Foundation began to play a more international role in philanthropy after World War II. In 1950, the Ford Foundation Trustees chose to support those activities that could promote world peace, freedom and democracy, economic well-being and economic institutions, scientific activities, and educational facilities. It also embarked on a policy of liquidating the Ford Motor Company stock and over time emerged as an independent philanthropic organization with its own identity. It rolled out grants across the world, and India became a major recipient of these grants in the late twentieth century in fields as varied as community development, agriculture and water resources, reproductive health, urban development, forest resource management, arts and culture, and education. In the four decades following 1951, around $275 million was committed to India by the Ford Foundation over thousands of different grants. The Indian Institute of Technology (IIT) in Kanpur and the first three IIMs in Ahmedabad, Calcutta and Bangalore were all beneficiaries of these grants.

Paul Hoffman, the first President of the enlarged Ford Foundation met Jawaharlal Nehru, the first Indian Prime Minister several times in 1951 and impressed upon him and other Indian policymakers the role Ford Foundation could play in supporting training projects. Dr. Douglas Ensminger (1910-1989) was appointed as the Ford Foundation representative for India and Pakistan in November 1951 and in February 1952, the Ford Foundation opened an office in Delhi. Douglas Ensminger was born in Stover, Missouri, USA, did his undergraduate and postgraduate studies in Rural Public Welfare at the University of Missouri and obtained his PhD in Rural Sociology from Cornell University in 1939. For the next twelve years he worked with the United States Department of Agriculture as a social scientist, eventually heading the Division of Education and Extension Training, Office of Foreign Cultural Relations.

Douglas Ensminger retired from Ford Foundation in 1970 to teach at the University of Missouri until his retirement in 1980. In between 1951 and 1970 he became one of the most influential Ford Foundation representatives in the world working behind the scenes with various Indian and American stakeholders, implementing over $100 million of grants in a wide range of sectors. In his detailed oral history preserved at the Ford Foundation archives, he observed how in the early 1950s the need for management training was absent in private and government sectors, which were dominated by excessive hierarchy. The British Henley model adopted by the Administrative Staff College in Hyderabad was rooted in the military and trained existing managers. University management programs had limited autonomy in curriculum development and capped faculty salaries and consultancy engagements with industry. In his desire to have an alternative management pedagogy in autonomous educational institutes outside the traditional Indian university system that would train fresh graduates, Ensminger set forth on a mission to establish new management institutes in India. His interest began to align with those of government officials who began to appreciate the need for management education during discussions on India's second Five-Year Plan that envisioned heavy industries under the public sector.

Talks were initiated between the Ford Foundation and the Ministry of Scientific Research and Cultural Affairs, headed by Humayun Kabir, to develop management education with American partnerships. This was followed by a Ford Foundation report authored by American faculty Richard Merriam and Harold Thurlby in 1957. A second Ford Foundation report, titled 'Recommendations for an All-India Institute of Management' was written by George Robbins in 1959, associate dean of the graduate school of business administration at the University of California Los Angeles.

The Robbins report laid down the template for a new institute, and the Planning Commission of India decided to set up a management institute in Bombay (now Mumbai) outside the university system, registered under the Indian Societies Act. Due to a breakdown in talks with Bombay University which did not want to cede autonomy, and the enthusiasm shown by Dr. Vikram Sarabhai in Ahmedabad with the full backing of the Ahmedabad Management Association, a decision was taken to transfer the location from Bombay to Ahmedabad. A second management institute was also conceived for Calcutta by Humayun Kabir who had Bengali roots and his close friend Dr. B. C. Roy, Chief Minister of West Bengal. The central government promised initial financial support while the respective state governments were to provide the land. Much later, in the 1970s, the Ford Foundation also provided important grants to the IIM in Bangalore and the Institute of Rural Management (IRMA) in Anand, Gujarat.

In July 1961, the Government of India set up a seven-member Planning Committee for IIMA comprising Dr. Vikram Sarabhai, Kasturbhai Lalbhai, Jivraj Mehta, Madanmohan Mangaldas (Ahmedabad-based textile industrialist), Prof. M. S. Thacker (Secretary, Ministry of Scientific Research and Cultural Affairs), V. Isvaran (Chief Secretary, Govt. of Gujarat) and S. P. Mahna (Asst. Financial Advisor, Ministry of Finance). IIMA was registered as a society on December 11, 1961 and the administrative office started functioning from June 1, 1962. Douglas Ensminger took a keen interest in the progress of the IIMs, attended several board meetings as a special invitee, served on the Personnel Committee and was instrumental in suggesting Ravi Matthai's name as Director of IIMA that eventually led to Matthai's appointment in 1965.

IIMA received close to $3 million from Ford Foundation grants in its first decade after which the connection with Ford Foundation tapered off. One of the last grants to IIMA was towards the purchase and maintenance of a novel Hewlett-Packard time-sharing computer system in 1970. The IIMA computer team was led by Prof. J. G. Krishnayya who had recruited Narayana Murthy from IIT Kanpur as a systems analyst. Narayana Murthy later co-founded Infosys in 1981, became Chairperson of the IIMA Board of Governors in 2002 and was elected to the Ford Foundation Board of Trustees in 2008.