MBA as a Career in India

MBA as a Career

MBA as a career option is really enticing. There are several media reports glorifying the success of top Indian MBAs earning starting salaries above Rs.1 crore or a six figure salary in US dollars. These are few examples or drops in an ocean of MBA graduates passing out every year. A recent study by Merit Trac-MBA Universe.com reveals shocking facts about the poor quality of MBAs.

MBA as a career might be a bed of roses for some. But, believe me its all really useless unless you have passion for what you take up as a specialization. The lifestyle and work culture is tempting. MBA will help you is to have a wider choice in terms of what you can do.

As per the study, in the year 2011-12, only 21% of MBAs in India are employable.

The study was conducted through a nationwide test where students were drawn from over 100 B-schools (excluding the top 20). This pool of students were tested on verbal ability, quantitative ability and reasoning by using standardized tests. The project was done on behalf of recruiting companies based on some passing criteria.

One can always debate the method of research or question the 21% figure, but the reality is that a majority of MBA graduates are not good enough to enter the corporate world.

Why the Gap?

There are various reasons or factors that contribute to this issue. But finally it all boils down to one fundamental issue with education – the Indian Education system is not good enough to make people employable. Which means people who pass out of most educational institutions or universities do not have the right skills, abilities or competencies required to perform their duties effectively in the corporate world.

However, most people still argue that Indian education system is far better and more comprehensive than the systems in developed markets. Yes, but we focus more on quantity of material and bookish lessons, while ignoring skill-development, which is essential to transform a student in to a professional. Moreover, the type of education does not help in developing life skills that are essential for survival, growth and success.

What are the flaws? What needs to be set right?

I’m not an educational stalwart or expert to comment on this. However, there are inherent flaw right from primary education till the master’s degree and beyond. Although I sound pessimistic I don’t think India lacks talent or intellectual powers. However, the educational system does not seem to encourage new skills, talents, creativity, inventions, path-breaking research, etc.

The system itself is flawed because of the following issues:-

  • Lack of good faculty
  • Focus on Rote/Memorization rather than understanding the concepts/workings
  • Lack of industry exposure
  • Poor understanding of corporate etiquette
  • Poor infrastructure (labs, sports kits, computers, etc.)
  • Too many subjects or disciplines
  • Outdated syllabus and pedagogy
  • Skills such as communication, critical analysis, etc are ignored
  • Activities/Projects are merely fancy stuff (not solving real problems, lacking innovation)
  • High fees (starts from Rs.3 lakhs onwards)
  • Placement: Most large and established companies don’t come to campus &
  • Various other issues

Faculty Crunch

The faculty issue is common across most B-schools because high quality professors move to other institutions or abroad. In some cases the teachers were probably students from the same college, who graduated and moved in to teaching. These student-turned-faculty lack real-world corporate experience.

Of course there are matured faculty purely from academic background with PhDs, who can only go up to a certain point with respect to  relevance of content or application of concepts. Then there are faculties with corporate experience who have a mix of knowledge and know the best of both worlds.

The PhD qualified professors, who have not seen the corporate world would not be in a position to understand the questions or needs of a student. Lack of real life case studies, current affairs, corporate developments, etc needs to be studied afresh instead of sticking to examples which are decades old.

Practical Relevance and Industry Exposure

Its time to move on from Henry Ford story to the current events such as Tata Steel’s acquisition of Corus or Facebook’s IPO and so on. The university/education system does not encourage corporates to get into teaching because it requires candidates to have done M.Phil, PhD, which few people in industry try to acquire.

Moreover, MBA being treated as a technical education on par with engineering and technology areas does not bode well for business education, which requires a different approach.

The most essential part of business is the practical exposure to industry scenarios which is completely missing. You cannot learn about cycling just by reading a book, you need to actually try it or attempt it to appreciate the challenges involved. Learning about how to improve ‘accounts receivable’ is different from practically doing a collections drive to improve cash flows, and fine tuning credit policies.

For instance a leading business school invited the film and music crew involved in the ‘kolaveri’ song to talk about viral marketing. Similarly, the exposure provided by leading institutions through their corporate links is strong, and this is where several mid-tier and low-tier colleges/universities have to improve on.

MBA as a Career – Student’s Expectations, Reality & Other Issues

One of the major issues with students who want to make MBA as a career have unrealistic expectations. A student interested in a marketing career thinks that he can become a Marketing Manager after MBA, which is unrealistic. The reality is that he has to start as a sales executive and learn the practical aspect of the business, become a relationship manager, and probably later move to senior roles.

Directly aiming for a senior role on graduation is wishful thinking. It takes several years to work, learn and become an expert in any field, and MBA enables you with some skills, but does not provide a shortcut or bypass to get ahead quickly or make money fast.

One should invest in MBA with a long term objective that it will give them the skills required to learn, adapt and move to higher levels. Remember, that the degree by itself is not a passport or a VIP entry to top positions.

Return on Investment on an MBA – Is it worthwhile?

I don’t blame the student as such, because when he/she paid a hefty fee of Rs.5 lakhs for an MBA, he/she expects a reasonable salary of Rs.3.5-4 lakh p.a. to start with in order to recover the cost in 1.5 or 2 years. But when he/she is offered a job offering Rs.10-15 k per month, he is not even able to earn 2 lakhs p.a. and the student’s grudge about spending a fortune on MBA is understandable.

What B-schools do to tackle this situation is to smartly hire a placement consultant or provide additional training in soft skills, technical skills or in specific domain to sharpen student’s skill. However, this puts more burden as students have to prepare once again for this program in addition to regular academics.

At the end of the day the students are the ones who will have to spend additional time, money and energy and what they get in return is peanuts. A number of students will get benefited by additional training, but there will still be a few laggards who need to pull up their socks and work harder.

Its high time for students and their parents to realize that an MBA (barring the top 20 B-schools) does not guarantee a high profile job with a 7 digit salary. The dreams of becoming a manager in an air conditioned cabin with a chauffeur driven car can only be achieved in the long run.

Students who invest in an MBA should be flexible or adaptable to take up an entry level role to start their careers and work harder and smarter to move up the ladder gradually, and achieve true success. There are no easy short cuts or tricks to success, its like ‘as you sow shall you reap’.

MBA as a Career – What should you do?

While I advise you to take your course seriously and try to score well, don’t assume that your learning ends there. Academics and qualifications are very important, but not the end of education. Keep more time for additional courses, certifications or projects that can enhance your knowledge, skills and career as a whole. For instance some students enroll for ERP courses such as Oracle, SAP, etc.

Students who are keen on careers in financial markets can pursue NCFM (NSE Certification in Financial Markets), CFA (Chartered Financial Analyst), etc. You can also attend workshops, seminars or meets to get in touch with like-minded professionals and develop the right contacts who can help you in some way.

Conclusion – MBA as a Career

All said and done, unless you are from the IIMs or the top layer you cannot rely fully on your degree or the institutes name to get ahead. Instead rely on your skills, talents, strengths, work experience, domain skills, team management skills, ability to execute projects and how to handle customers.

Once you move up the ladder, knowing the business and the tricks of the trade will help you achieve more success. This is where people move to newer and challenging projects across the industry and emerge as successful managers.

If you want to become a successful manager and sustain your reputation, be prepared to run the marathon…..one day you will achieve your dreams.

On a broader front, for people who are passionate about business and want to pursue MBA as a career, what an MBA degree will help you is, to have a wider choice in terms of what you can do. You’ll have a larger number of verticals you can enter. Also before taking up a job you would exactly know what the job demands.

Wishing all MBAs an exciting and wonderful career ahead!!!

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About the Author

Sridhar is a financial analyst and his work experience spans areas of financial analysis, modeling, valuation and research on companies, specific sectors, etc. Sridhar is an MBA graduate with Finance major from Maharishi Institute of Management.

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