Is studying an MBA a good investment?

Is studying an MBA a good investment?

Fees are high, and the work is demanding - but it's a course employers really value.

An MBA indicates that one has mastered a certain level of knowledge in business management, which gives them the ability to deal with the pressures of the industry and interact with top professionals and executives on business-related issues. In recent years, there has been a sudden spurt in the number of institutes offering MBA programs. Apart from the competition intensifying among MBA grads, this has also resulted in business schools cashing in on the ‘MBA wave’ in the country, with many offering ‘100 per cent placement’. The reality, however, is that many of these institutes have poor infrastructure, and faculty who lack practical knowledge.

A slowing economy has compounded the problems of MBA graduates. It is not that there is no requirement of managerial personnel in the Indian economy. But not for all the over two lakh managers who graduate from the thousands of institutions every year. The economy is not doing well and there is no new investment.

The MBA schools are trying to teach students like it is an engineering course, in a very regimented manner. They treat the text book like a Bible! Their industry interaction is very bad and most of them graduate solely with textbook knowledge rather than case studies and discussions. Because of this, they are not prepared at all for the demands of the industry. Industry does not hire such students, definitely not for important posts.

A joint survey recently done by Development Dimensions International (DDI), a global talent management firm, along with The Conference Board, a non-profit business membership and research group, to check the preparedness of companies in India to meet the business challenges associated with global expansion, does not present a good picture.

The report includes responses from 836 leaders, 244 human resource executives in India. A shocking 39 per cent of HR professionals reported that leaders in their organisation are slightly or not at all prepared to handle human capital related challenges which include retaining and developing talent, managing complexity, leading change, leading with integrity and having an entrepreneurial mind-set. Only 31 per cent of Indian organisations are prepared to meet the business challenges which include customer relationships, innovation, operational excellence, corporate brand and reputation, global expansion, among others, as the country witnesses not much of an improvement in the quality of leadership.

It is seen that often, people coming from business schools think they have superior degrees, but many are not aware of the leadership skills that are required for the job. They are not able to effectively interact with others in the corporate environment; they don't know what kind of leadership skills is required when they get on to the job.

To address this issue, firms like DDI prepare graduates to be corporate-ready, and help them deal with the high pressure of a job in the corporate sector. There is an increasing demand to build campus-to-corporate relationships, with more and more organisations specifically investing in such programmes. Depending on their needs, each organisation decides what kind of leaders at a particular level they would require. Work is done accordingly to groom the graduates.

Giving further insight into the kind of work that they do at DDI: First, look at the learning orientation — is this person ready to learn. Then whether the person is really inquisitive about different things that an organisation has to offer.  Train them on the basic leadership skills that are required at the entry level. Whether interacting with team members or preparing for corporate meetings, there are a few things that management trainees who will soon become young leaders, need to focus on.”

There is much brighter placement season in 2016, compared to 2015. The recovery of the industrial and manufacturing sectors would happen in the third quarter of this year, which is the most crucial point for recruitment. Though actual investments are yet to pick up, there is euphoria, there is hope, and there are expectations at the moment.