Higher Education

MBA Craze Tumbles Down: Where Lies the Canker?

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A tête-à-tête with aspirants on ‘Why MBA’ often draws out some of the most diverse answers. In recent times, not only has the B-schools witnessed a dip in placement figures; reports also suggest a nearly 10 percent dip in takers of CAT 2013. Why has MBA, the much celebrated passport to lucrative careers, lost its lustre suddenly? Anushi Agrawal, with inputs from Veena Kurup of Elets News Network (ENN) finds out if placement is the only factor that attracts students to do an MBA.

Students are not concerned about the quality of education in an institute, they only want to know the placement and salary statistics and discounts offered on the fee structure and this has spoiled the entire education system,” reads a paper, ‘B-schools and Engineering colleges shut down- Big Business Struggles’ by the Associated Chambers of Commerce and Industry of India (ASSOCHAM). The finding pretty much sums up the MBA education scenario in our country at present. Ask for the most nerve-wrecking days in college from an MBA student and the answer is almost unanimoustheir placement day.

For years now, handsome salary, bright future and social respect have allured students to pursue a career in management. The crazy run towards these rosy aspects is so much for some that you often might think that MBA is a savior to the confused soul. “I did BSc in Microbiology and by third year of my degree I realised that the field that I had chosen require long years of dedication and academic perusal before I get a comfortable job. At that juncture, I decided to apply for MBA exams as I wanted a well paying job soon and become independent,” says Tanishtha Roy, first year MBA student. For Rajeev Garg too, MBA was the “obvious choice” after completing his BCom.

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Not to quote, many said they opted for MBA for the sake of having a degree, landing up a well-paid job, peer pressure, family expectations or even as basic as having better prospects in the matrimonial market! In crux, all the rationale point towards one component – the placement. But, what happens when there is a dip in placements itself ? To the surprise of most management fraternity, inspite of the increase in number of B-schools across the country, the number of applicants for Common Admission Test (CAT), the common test for admission to elite B-schools of the country, saw a drastic decline of 9.3 percent in 2013. The total number of applicants stood at 1.94 lakh in 2013, compared with 2.14 lakh in 2012. The decline is being attributed to not so impressive placements at Bschools by many. MBA seats in India grew almost four-fold from 95,000 in 2006-07 to 3,60,000 in 2011-12, resulting in a five-year compounded annual growth rate (CAGR) of 30 percent. Unfortunately, job opportunities for MBAs have not grown in the same proportion.

Dr Sanjeev Bansal, Director, Amity Business School

“The institute is only a service provider. Many people think that placement is the only work of B-schools which is absolutely wrong”.

Rajul Garg, Director, Sunstone Business School
“The basic motto of students is to gain a promotion at their present organisation or to seek better salary packages.”

B-schools in the placement soup

Campus recruitments saw a 40 percent dip during 2012 as compared to 2009, as per ASSOCHAM report. The report goes on to highlight that as a consequence of the same, B-schools are not able to attract students. To add to that, more than 180 B-schools have already closed down in 2012 and many more are struggling for their survival. In the last five years, the number of B-schools in India has tripled to about 4,500, amounting to as many as 3,60,000 MBA seats, collectively.

The demand has begun to deflate now, as economy growth rate hit its slowest in the last nine years and the quality of education provided by Bschools has come under scanner. The report establishes a clear positive relation between placements and admissions. On being asked about how Dr Sanjeev Bansal, Director, Amity Business School, Noida – one of the popular B-schools among aspirants – reverts to students and parents who ask him about placements before taking admissions, he remarks, “Many people think that placement is the only work of Bschools, which is absolutely wrong.

The only objective of joining a course should be learning. Placements depend largely on the individual capabilities” Voicing the same concern, Professor Prem Vrat, Vice Chancellor, ITM University adds, “It is unfortunate that admission process is so significantly influenced by placements. At the time of admission, students should consider the quality of institution in terms of faculty, infrastructure, alumni and placements. Don’t let placements be the sole purpose of admission but look in totality.” It is indeed true that students these  days readily take a lump sum loan for doing an MBA with the ultimate goal of getting placed with a good package.


Dr Raj Agrawal,Director, CME, AIMA

“B-schools should not be considered as placement agencies, the main purpose of B-school is to provide quality education. Placement is a byproduct” 

But lack of key skills and capabilities gained during the MBA course and consequently, a lack of good placement at the end of the course, leaves students in a soup. Rudraksh Mahajan, final year MBA student at Narsee Monjee Institute of Management Studies (NMIMS) justifies his decision of doing an MBA by saying that “MBA is like a ladder to a job with a respectable salary. MBA basically provides better chance for getting better jobs and more pay packages. For me, one of the major deciding factors while selecting an MBA institute was the salary package offered through placements.” Placements and salary packages are undoubtedly the prime factors while opting for MBA course.

“The basic motto of students is to gain a promotion at their present organisation or to seek better salary packages,” said Rajul Garg, Director, Sunstone Business School, Gurgaon. Raising the concern about the mindset of students before joining a B-school, Dr Pankaj Gupta, Director General, Jaipuria Institute of Management, Noida, said, “The root cause of the problem is that institutes only focus on filling up seats and do not consider the quality of students at the time of intake. Consequently, students think that the entire responsibility lies with the institute. They come with the mental set up that I have paid the fees and now the institute is entitled to provide me a job whether I upskill myself or not.

To some extent we have allowed for this kind of mentality to flourish.” Most of the B-schools have largely focused on filling up the seats and taking hefty fees on the fake claims of 100 percent placement. Dr Raj Agrawal, Director, Centre for Management Education, All India Management Association, New Delhi, sums up the dichotomy of the situation, “Quality of education should not be completely linked with placements, B-schools should not be considered as placement agencies, the main purpose of B-school is to provide quality education. Placement is a by-product.” There is a perception associated with MBA degree. It is believed that if you are able to grab a seat at a B-school, either

Dr Pankaj Gupta, Director General, Jaipuria Institute of Management
“Students come with the mental set up that I have paid the fees and now the institute is entitled to provide me a job whether I upskill myself or not. To some extent we have allowed for this kind of mentality to flourish .” 

On merit or through donation, a job at the end of the course is assured. Graduates suppose that they have a ready demand in the industry. But the situation is quiet opposite in the market. It is no longer an easy task to find a job at the completion of MBA from a not-sofamous B-school. Consequently, most graduates end up taking up jobs at the lowest level of hierarchy in the orgainsation which does not justify their MBA degree, neither in terms of work nor salary. The irony is graduates are left with no choice but to continue working at whatever profile and salary they manage to get initially as they also have to repay the hefty loan taken to pay the fee for the MBA degree. They find themselves trapped in a vicious circle.

The way forward
B-schools have fallen prey to their own game. They teach students to get maximum returns for their investments and students end up applying same to their education and weigh the MBA degree only in terms of financial returns and not in terms of skills and training gained. “MBA courses help the students in diversifying their knowledge and skills across functional areas. This ultimately enables the student in diversifying their knowledge and skills across distinct functional areas and assists them in better decision making. All these aspects enable the students in delivering better efficiency in job and future career prospects.

 The distinct spectrum of opportunities offered under MBA produces a better output of qualitative students and creates better placement avenues,” Dr Debashis Sanyal, Dean, School of Business Management, NMIMS, Mumbai, points out. But the attractive packages publicised by B-schools overshadow the emphasis on diversifying knowledge and skills and focus more on the glamour quotient of MBA. “Students are induced by the environment; they do not apply sense to it. Many MBA graduates are not getting jobs. People who do MBA for the sake of doing it are facing the problem. MBA schools have become placement-oriented.

There is need for awareness about the true state of MBA graduates,” says Dr M Ponnavaikko, Vice Chancellor, Sri Ramaswamy Memorial (SRM) University, Kanchipuram. In an education system that offers degrees but no jobs, the aim should be 100 percent employability and not 100 percent placement.

Professor Prem Vrat says, “It’s time that universities relook at their role. They are not employment exchanges but they should train those who would easily find and retain the job. Employability is the capacity of a person to get and retain a job. Employability is what the university can do, employment is dependent on external factors like economy, market forces etc. Responsibility of the universities is to produce employable graduates and not to provide employment.” Large number of B-schools have closed down due to unfavourable market forces. “There is a need to have proper regulatory authorities which should formulate norms and build a mechanism to enforce these norms.

The regulator should also be able to create an environment for quality education.” emphasises Dr Raj Agrawal. But there are others who are not perturbed by the shutting down of a number of Bschools. In fact they believe that it will cleanse the system which otherwise has become murky and corrupt. “This is actually a correction year. Many colleges have closed down, in few more years only good schools will survive and other will automatically get closed down,” says Dr Bhimaraya Metri, Dean (Academics), International Management Institute (IMI), New Delhi.


Professor Prem Vrat,Vice Chancellor, ITM University
“Responsibility of the universities is to produce employable graduates and not to provide employment”


Dr Debashis Sanyal, Dean,School of Business Management, NMIMS
“The distinct spectrum of opportunities offered under MBA produces a better output of qualitative students and creates better placement avenues”

To give a direction to the lost minds in MBA courses, some B-schools have started having in-built mechanisms like organising awareness cum counseling sessions for undergraduate students. Such programmes are organsied at regular intervals to spread awareness about what to expect from an MBA course and how it can upskill and help students in the long run. Some give special emphasis on getting to know the real interest of students during orientation and then create a support structure for them and guide them accordingly.

The probable solution is to look beyond the MBA hype in the country and be aware about the actual scenario at B-schools. At the time of taking admission, students must check the credentials of B-school very carefully. They should check the approval, faculty, tieups, placement record and accreditation of the institute. Moreover there is a need to change the outlook– to see MBA as a passport to a luxurious lifestyle with hefty salary packages in reputed companies. As ASSOCHAM report also cautions students “don’t take MBA as mandatory prestige tag for sure success in industry.

If you really like to take an MBA course, evaluate your current position, your long-term goals and may be your finance. Many private schools are just a business model by some management gurus to earn some money out of investment.” It’s time that we do away with the notion that securing a degree can fetch a good job without actually learning and developing capabilities. One should not take MBA as just another degree but rather work to mine the best out of it.

Key skills and training picked up during the course could provide the much requisite boost to the career and put the student right at the top of the heap without the need for the institute to lobby for a job for the student. On the other hand, even the institutes will have to improve the infrastructure, train the faculty, work on industry linkages and spend money on research and knowledge creation to ensure a holistic development of students and focus more on making students employable rather than employed.

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