The Indian Institutes of Management’s online registration for the IIM CAT 2020 exam is now open. Lakhs of aspirants will fight it out to secure the coveted seat in IIM, or other desirable MBA colleges, to get one step closer to securing their dream jobs. But what if I told you your fancy B-school degrees are becoming increasingly irrelevant in today’s fast-changing world, and that India’s MBA-IIM obsession is merely a consumerist demand created by the education sector?
The death bells of doing an MBA have been sounding for a while now. According to an All India Council for Technical Education (AICTE) report, more than half of MBA graduates failed to secure a campus placement in 2016-17. Apart from the general job crisis in the country, the outdated curriculum has been cited as one of the reasons these institutes fail to woo companies looking to hire.
It turns out, the Return on Investment for a lot of management courses is quite poor. An MBA from non top-tier college costs somewhere around Rs 8-12 lakh, but only fetches a job that pays on an average Rs 40,000 per month. Don’t forget the costly CAT coaching classes, which can run up to Rs 75,000 a year. In contrast, vocational courses cost much, much less, which means you not only recover the total investment a lot sooner but also start making more money.
Since IIMs, considered the crème de la crème, have produced noteworthy alumni, who now head global conglomerates, and an average graduate enjoys enjoy a hefty package of Rs 20 lakh per annum or more, the craze refuses to die. But it’s worth noting just how many young Indians actually secure admission in top management colleges.
More than two lakh students battle it out every year for a little over 3,200 seats in the ‘dream factories’ of India. The competition is so stiff that even those with 99 percentile CAT scores fail to make the eligibility cut for IIM interviews. And MBA degrees from tier-2 or 3 colleges are only likely to give you diminishing returns.
The cut-throat competition to enter top colleges has given way to the booming markets of coaching centres, who perpetuate positive sentiments for these degrees and market them as an almost sacrosanct part of your life. So there might be a glut of management institutes, courses and students, but the saturated market will still profit from you from becoming another tiny droplet in the ocean of MBA graduates.
MBAs don’t make CEOs
The chief executive officers (CEOs) aren’t made in colleges, but on office floors where experience holds more value than a degree. An MBA might be able to give you a headstart, but it can’t guarantee the topmost position.
Even Google CEO Sundar Pichai warned students of this obsession with doing an MBA from IIMs. “I get very surprised that people get into the IITs and immediately they are thinking about IIMs and so on..” Pichai had said in a conversation with students at his alma mater, IIT Kharagpur.
An MBA is often seen as a guarantor of success, at least when it comes to earning massive salaries and making it to the top position in a company. But consider this: the 2016 Mint analysis of the top 500 companies on Bombay Stock Exchange (BSE) showed that only 144 CEOs of 466 companies had an MBA. A 2017 survey showed that only 28 per cent of India’s CEOs have a master’s degree in business. We should also note that the ‘Forbes Billionaires List’ of 2020 found that among the top 100, only 11 hold an MBA degree.
There must be something amiss in MBA courses, or something so redundant and useless about them that industrialists like Azim Premji and Mukesh Ambani, albeit privileged students for sure, left their courses at top business schools mid-way. If MBA courses did offer the value they promise, we wouldn’t be here after all.
It’s funny how Ambani, the richest man in Asia, left his MBA degree at Stanford University, while his brother Anil Ambani, who is now bankrupt, went on to complete his degree from Wharton. If MBAs courses did teach you how to run businesses impeccably, the situation would have been slightly different here, don’t you think?
The people mentioned above acquired their parents’ business, one might argue. But even successful start-up founders like Vijay Shekhar Sharma (Paytm), Byju Raveendran (Byjus) and Ritesh Agarwal (OYO) — all non-MBAs — prove it’s the idea that counts. And good ideas don’t seek a degree before coming to you.
The times are changing, many job creators now look for specific skillsets, instead of going by the book and picking the first MBA who walks through their door. Many of these colleges also teach students outdated and obsolete curriculum that’s way behind the curve of change. For all the focus on the dynamic nature of business that these courses obsess over, they bring little dynamism to their own courses. In a volatile market, leaving a fresh employee with a bunch of Peter Drucker or Philip Kotler theories, and some business jargon in their pocket won’t really be of much use.
The illogical IIT-IIM combo
Indians hate taking the road less-travelled. Even though the relevance of MBA is decreasing, the course fee is sky-rocketing and people are still willing to dole out lakhs and lakhs, in dreams of an average-paying day job.
We’re too busy adding yet another brick to the wall to stop and weigh the alternatives. So often parents want their kid to to follow the 6-step outdated plan devised to crack ‘success’:
- 10th mein padhai, phir aish he aish (Study in the 10th grade, and then you can chill forever)
- Opt for science or leave the house
- IIT, then you’ll earn more than you can spend
- IIM, then you’re a guaranteed crorepati
- Bag an average, secure job (in this economy, really?)
While choosing subject streams in Class 11, we are made to believe our choice will determine the direction our lives take. More often than not, we are forced to take science, but are not told all paths will eventually meet at the doors of MBA colleges. It’s true, you’ll most likely meet your science section friend standing in the same queue as you for a business school interview. The natural precursor to pursuing MBA should be a BBA (Bachelor of Business Administration), but it is, quite strangely, BTech (Bachelor of Technology).
About 87 per cent students who have enrolled in IIM Bangalore’s post-graduate (PG) programme for 2020 are engineering students; 55 per cent of CAT applicants this year were engineers, while all 11 of the 100 percentile scorers were either BE/BTech students.
One of the people who lived the ‘Indian dream’, but found fame and happiness in an alt career, is Chetan Bhagat. But in his words, he wasn’t ever happy. The IIT-IIM grad left his high-paying job to write sub-par literature. And while people like me can criticise his work, it is an undeniable fact that he is successful, and one of the most recognised Indian authors in English today. To do something he loved and live a life on his own terms, he didn’t need an IIM degree. In fact, he probably would have written more nuanced books had he studied English or one of those wretched Arts subjects. Who knows!
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