How MBA Has Wrecked Havoc In India

The belief in the mind space of Indian students (and parents) that an MBA is a requirement to enter job market or that this should be the education plan needs to change if they want to remain employable. In 2015, Harish Chaudhry, a professor of management studies at IIT-Delhi wrote an article in Business World and as a counsellor working with students, I believe that this short and pointed article needs to be retold and understood. 

In my previous blogs I have repeatedly emphasised that MBA is not for fresh graduates by design and its suitability for those seeking their fresh jobs is grossly misplaced. I have interacted with faculty members even of  institutes such as the hallowed IIM and often find that there are many amongst them, who have never worked outside of academia at all and even if they have, it is often in consultative roles.

While countries such as India need skilled workers and professionals, the push towards degrees that make students uninterested in fulfilling the shortage is leading to a unique situation where there are jobs but no workers trained for them and workers for whom there are no jobs.

MBA programs have be actively packaged to suit the marketing objectives of the educational institutions. It is time to change this.

I was recently asked as to what proportion of our overseas bound students opt for an MBA and many were surprised to hear that very few do and those who are indeed suited for this training after having worked and gained experience for years and now needing the management training to take them in the management cadre of their organisations. There are also those who opt for the same as they have a family business to manage and here too my advise to them is to opt for general management degrees or specialisations such as entrepreneurship.

Overseas bound students seeking pathway to work or settle overseas are driven by occupations in demand in those countries and thus MBA is not the ideal qualification anyways for vast majority of them. (A trained school teacher or a nurse is more in demand than a fancy MBA working in a bank. I am talking from the skilled immigration perspective here.)

Let me quote from the article first for those short on time.

• Engineers do not want to pursue a career in engineering, hotel management graduates do not want to continue in the hospitality sector — they all want to be managers. Somewhere, the dream merchants have been able to brand the MBA degree as an assurance of a good job, defined as a high CTC (cost to company) and little work.
• The average MBA in India is unemployed, nay, unemployable. The reasons are many. First and foremost is the curriculum design. The MBA program was designed for executives with substantial (8 to 10 years) work experience and domain knowledge. It rests on a belief that you cannot manage that what you cannot do yourself. Also, managerial decision making calls for a certain level of maturity, which is usually lacking in a young adult straight out of college. However, most students in India come for an MBA without any work experience (and surprisingly so do the teachers).
• Every discipline requires a degree of prior knowledge and competencies, and so does management. That graduation in any discipline from any university college with any marks is good enough is an absurdity. Not even the best institutions can transform every child in two years, much less the average B-school.
• I hear a very large number of management graduates stating that management is the art of getting work done (and adding, with tongue in cheek, not doing it yourself). Someone must be teaching that in the classroom. Such an attitude is a guarantee of unemployability.

Now I share the full article which can be found on the link.

The biggest problem in life is a gap between reality perception and self-assessment. The second biggest is contradictory desires in the mind. Let me explain the second one first. Many youngsters want to be rich and honest. Many young boys want to marry a smart homely girl. Where have these notions come from?

The biggest problem in life is a gap between reality perception and self-assessment. The second biggest is contradictory desires in the mind. Let me explain the second one first. Many youngsters want to be rich and honest. Many young boys want to marry a smart homely girl. Where have these notions come from? Clearly from the dream merchants who are creating unrealistic expectations. Engineers do not want to pursue a career in engineering, hotel management graduates do not want to continue in the hospitality sector — they all want to be managers. Somewhere, the dream merchants have been able to brand the MBA degree as an assurance of a good job, defined as a high CTC (cost to company) and little work. In the good old days, it meant an air-conditioned office, Wi-Fi enabled system, company car and good looking secretary. Sometime ago, we added ESOPs to the mix, and more recently — music to the ears — work from home. Does an MBA give you all that a gullible youngster believes it gives? No, certainly not in India.

The first major review of the MBA program was carried out at the University of Michigan in 1931. The Michigan review, and numerous subsequent ones pointed out that the MBA program needs to be more skill oriented and that it needs to develop it’s own body of knowledge. The first MBA was offered in India by the University of Madras in 1951, and little has changed since then. With a huge overkill by the government of India, the first three IIMs (popularly called ABC) were set up and the sheer number of applicant to seats availability ratio ensured that good (smart, intelligent, hardworking! ) students got selected and these IIMs gold-plated gold. The numbers were small. With no reference to the curricula and pedagogy, no concern for the skill set required for managerial tasks little or no availability of faculty and a poor research base, the universities (government and non-government) and autonomous institutes recognized by the All India Council for Technical Education (AICTE) have sprung up in every nook and corner of India. The number had crossed 3000, and has now come down with the shutting down of some due to financial constraints.

The average MBA in India is unemployed, nay, unemployable. The reasons are many. First and foremost is the curriculum design. The MBA program was designed for executives with substantial (8 to 10 years) work experience and domain knowledge. It rests on a belief that you cannot manage that what you cannot do yourself. Also, managerial decision making calls for a certain level of maturity, which is usually lacking in a young adult straight out of college. However, most students in India come for an MBA without any work experience (and surprisingly so do the teachers). How does one teach industrial relations to a student who has no idea of industry or relations, leave aside strategic management? Second, the pedagogy of a management subject is different from commerce or maths.

Management is not a subset of social psychology or operations research, although it borrows from these areas. Management is an applied discipline, and calls for a combination of teaching and training. It then calls for teacher preparation, and the average PhD is not adequate training for teaching a management course or training for a managerial role. While subject experts can deliver the curricula, teaching and training are different aspects, and need to be treated differently. Third, every discipline requires a degree of prior knowledge and competencies, and so does management. That graduation in any discipline from any university college with any marks is good enough is an absurdity. Not even the best institutions can transform every child in two years, much less the average B-school.

Fourth, most B-schools ignore industry requirements and employability drivers. I hear a very large number of management graduates stating that management is the art of getting work done (and adding, with tongue in cheek, not doing it yourself). Someone must be teaching that in the classroom. Such an attitude is a guarantee of unemployability. Clearly, industry wants people who are willing and capable of hard work.

Last but not the least, the promotion campaigns carried out by the B-schools tend to lead applicants believe that the starting CTC is somewhat below what IIM-A or ISB claims, and in any case nothing less than Rs 12-15 lakh a year — often off the mark by a multiple of 10. They are heartbroken when reality strikes.

With the supply hugely outstripping the demand for managerial jobs, we are doing a great deal of damage to the future of our children as well as to the social fabric of the country. By pursuing policies that convert the uneducated unemployed into degree-holding unemployable citizens, we are causing great harm to the psyche of the individual as well as robbing professions of available talent. We are short of teachers, nurses, electricians, and plumbers, and flooded with jobless MBAs. Can we introspect on our policy framework?

(This story was published in BW | Businessworld Issue Dated 14-12-2015)