The MBA Degree Needs a Makeover

The MBA degree was created for a different world. It was the mid-sixties when having an MBA first began to catch the imagination of the middle-class aspirants. It was the guarantee of a good life. But that was also when the average tenure of companies on the S&P 500 was 33 years. By 1990, organization’s lifespans had shrunk to 20 years. By 2026 the lifespan of a company would be down to 14 years. 

About 50 percent of the S&P 500 will be replaced over the next 10 years. Already yesterday’s aspirational employers like US Steel, Dell, and the New York Times have been replaced by Facebook, Under Armor and Netflix. 

The employers have to rely on shortcuts to decide which degree best prepares someone for a career in business. The MBA program was the perfect answer. XLRI – India's oldest business management school was founded in 1949. IIM Calcutta was the first of the IIMs to be set up in 1961. Ahmedabad, Bangalore and Calcutta were the three cities which had IIMs. As industries flourished, so did the B-Schools. 

The two years of business education shot up the worth of any graduate in the job market. Employers could not hire enough of the MBAs. The B Schools started to “ration” out the MBAs. The students would choose which firms would be given the Day One status to come to offer jobs to the graduating MBAs. Soon a pecking order would emerge in the early nineties. It was the Big 4 consulting companies or the Investment Banks that would get the pick of the lot. Heads of HR would declare achieving Day 1 status on Campus as their biggest achievement. The students got more ambitious. Some campus offered Day Zero a day before Day One for campus placements.

There just were not enough B-Schools that stamped the three magical alphabets - MBA on to eager students. There are at least 5,500 B-schools in the country in 2016. The entrance examination became so skewed in favor of analytical thinking that 99% of the MBAs in most B-schools were Engineers (some B-Schools do admit students with a more diverse background). There was only one problem. 

The curriculum of the B-Schools has remained painfully slow to adapt. While some professors do have prior work experience, it is hard to stay current without engaging deeply with the industry. The industry-academic link has to be an active one. The professors have to run several consulting projects where they can involve the students. 

The Assocham report finds only 7% of the MBAs employable. The B & C category B-schools are doing the industry and the students disservice. Around 220 B-schools have shut down in 2014-15 years in Delhi-NCR (National Capital Region), Mumbai, Kolkata, Bangalore, Ahmedabad, Lucknow, Hyderabad, Dehradun etc. and at least 120 more closed shop in 2016. “Barring a handful of top Business schools like the government run IIMs and other few, most of 5,500 B schools in the country are producing sub-par graduates who are largely un-employable resulting in these pass-outs earning less than Rs 10,000 a month, if at all they find placements.”, says the report. 

The market forces are telling people that the B-Schools are having their “Kodak Moment”.

Here is what needs to happen.

When we buy a car, we have no problem in going to the petrol pump when the tank goes dry. We have to have the same mindset when it comes to business education. We have to rethink the MBA offering. It must stand for what it claims to be – Master of Business Administration and not Mediocre But Arrogant.

References:

https://www.nopaymba.com/

http://fortune.com/2015/03/16/how-to-get-an-mba-education-for-less-than-1000/

https://www.forbes.com/sites/joshbersin/2016/01/29/ten-predictions-for-hr-leaders-in-2016-how-the-digital-world-of-work-will-change/#8e7231955553

https://www.edcast.com/