We not only have an oversupply of MBAs already, but have MBAs whose academic and experience profile actually makes them another "brick in the wall", writes Arvind Singhal.
For the last few years, every MBA
placement season sees a flurry of releases from various business schools
on the highest and average salaries offered to their newly minted MBA
graduates.
Each year, the numbers show a rising
trend, and if these numbers are to be taken at face value, India must
be facing an incredible crunch of entry-level managerial talent since
such compensation levels are aspirational even for mid-career
professionals in other functions, such as manufacturing, or professional
service providers, such as doctors and chartered accountants.
Sometime later in the year, it would
be the "ranking" season when leading business magazines come out with
cover stories carrying their rankings of leading business schools in India, adding further glamour to the MBA degree.
Largely unstated are the
less-than-stellar overall placement records for most MBA institutes in
India, including some that have made it to even the top-10 rankings.
While it may be true that finally
most MBAs from the top-10 or even the top-25 ranked institutes find some
job and hence they are technically "placed", it is also true that
increasingly, many of them are forced to take up jobs that could be
easily managed by someone with a basic graduation degree itself.
The plight of those who do not come
from the top-25 institutions is probably worse. Indeed, if the glamour
and the clamour for an MBA degree continue to grow as it has in the last
few years, and with both public and private institutions creating
capacity at the same pace as they have been doing recently, it may be an
exaggeration, but just barely, that we will see legions of MBAs in the
field sales force of pharmaceutical or FMCG companies, on the shop floor
of retail outlets, and in different types of BPOs and KPOs.
Hard data supports the onset of this glut of MBAs.
"MBA graduate schools are in heavy demand. More and more students are now opting for BBA or MBA programs
so as to turn themselves into hot properties in the job market. At
present, there are ample of management institutes which are offering
management programs both at bachelor and masters level. But just joining
any B-school doesn't make it sure that you are going to have a good job
in the market." Says Mr. Praveen
In 2000, there were about 600
colleges in India offering about 70,000 MBA seats. By the end of 2009,
the number had increased to 1,400 colleges offering about 120,000 MBA
regular seats( It doesn't include private seats by institutes for
autonomous PGDBM etc. certificates)!
The intake of the top-20 institutes
alone has increased from 1,500 in 2000 to over 5,000 in 2009, and is
poised to increase further in the next five years as more IIMs come into
operation while the current top-ranked ones (IIMs and others) further
expand capacity or add new campuses and programmes.
By comparison, the US (whose economy
is over 10 times bigger than that of India) has about 1,000 colleges
offering about 150,000 MBA seats to both US citizens and to a growing
pool of international applicants.
In the entire European Union (EU),
whose economy is also over 10 times that of India and which has much
more diversity in terms of number of countries and businesses, there are
just about 550 colleges offering about 100,000 MBA seats.
Major EU economies such as Germany,
France and the UK individually offer between 8,600 and 27,000 MBA seats
despite each being significantly larger and more global than India is at
this time.
Making it worse is the highly flawed
selection criterion of almost all Indian MBA colleges, including the
IIMs. The 2010 incoming batch, for instance, has just 6 per cent women,
about 94 per cent are engineers with just an isolated representative
from arts stream, 33 per cent have no work experience at all and 41 per
cent have less than two years of experience.
There is very high probability that even this experience profile will largely have applicants who have worked in the IT sector post-engineering and wish to make a transition out of the IT sector itself.
Harvard's class of 2010 has 38 per
cent women, just 32 per cent are engineers, and over 84 per cent have
experience of more than two years. ESADE (Barcelona, Spain) has 48
nationalities represented in its class of 180 students with an average
work experience of seven years.
Hence, we not only have an oversupply of MBAs already, but have MBAs whose academic and experience profile actually makes them another "brick in the wall".
There are no easy solutions except
that MBA colleges have to reinvent themselves and their programmes
immediately before they add more capacity, and all new aspirants for an
MBA programme should keep in mind that an MBA degree from even a high-ranking institute may not translate into a dream job in the near future!
Source - Internet & Research
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