IS MBA REALLY LOSING ITS SHEEN?

"The Managerial Revolution" seen in the US in 1930's, saw shifting of economic power from business owners to a new class of educated professionals, i.e. Managers. While it lasted for decades there, educationists in India worry that such a transformation is dying a premature death in our country, as evidenced by the falling number of candidates taking MBA entrances examinations. Thus, the question troubling every graduate and their parents in the country is : to go for MBA or not?

We saw a spurt in the number of MBA colleges, especially privately owned, in the period of accelerated economic growth seen during 2003 to 2008. This period saw sky-rocketing pay packages and students bagging multiple offers from so-called 'dream companies', the Big 3's, the Big 5's and so on. This 'All-India Job-Fest' benefitted MBA graduates and other professionals alike, irrespective of their alma mater or field of specialization. But, experts had started warning of a 'bubble' developing as the supply of management professionals exceeding the capacity of the market to absorb them. This dream run ended with the financial crisis of 20072008, with corporates increasingly becoming riskaverse and conservative while recruiting new managers. Rising monetary and opportunity costs made management education impossible without education loans. Also, increased recruitment activity by the government combinedwith revised pay grades, further reduced the demand for a MBA degree. However, the paper 'Worthiness of doing an MBA' by Nirmal M highlights that the monetary and social benefits of an MBA,are dependent on the institute from which a student passes out from. He shows that despite the increased fees, students from top 50-ranking institutions (as per Business Today Ranking, 2013)are able to breakeven within 14 to 24 months of joining a job (on the basis of average fees and pay packages). Further, these institutions showed a robust placement record, even during the economic downturn. Beyond the financial benefits, the social rewards associated with an MBA from elite Bschools are numerous. These include a life-long brand value attached with an alumnus, ensuring a faster climb up the corporate ladder. Further, while in the top ranked colleges, students develop social networks, which continue to be a source of value addition throughout their career. Lastly, an MBA qualification opens up new career paths and opportunities in the fast and ever-evolving private sector paving the way for a fulfilling and satisfying career. Thus, companies have become wiser after the crisis and are more selective in hiring people, especially in managerial positions. While companies still need MBAs, their focus hasdecisively shifted from quantity to quality. Hence, a management aspirant will do well to work hard to secure a seat in a top-ranked B-school rather than blindly running after an MBA degree.

-Contributed By Ankur Choudhary, Alumnus UBS Chandigarh & visiting faculty at Bulls eye