MBA and its Specializations
Master’s Degree in Business Administration (Management), also known as Master of Business Administration (MBA or M.B.A.) is the degree, which originated in the United States in the late 19th century with the rise in demands of scientific approaches to management in the country which already was at the boom of industrialization. Under the purview of MBA programme comes the various areas of business such as finance, accounting, marketing, human resources and operations in a way most relevant to analysis of management and strategy formulation.
MBA has also shown its effect on the Indian subcontinent with more and more students opting for this programme as a long time career. This can be a direct consequence of the numerous set up of corporate houses in India. It seems now that what years ago was held to be the position of the Doctors and Engineers, have now been taken over by the MBAs. Not only is it proven by the unprecedented number of aspirants who seek to get into the premium colleges offering various degrees of MBA, but also the growing importance of actual MBA in the corporate sector.
Following are the specialisations according to their popularity in India and a brief descriptions on them. Specialisations of MBA (According to Popularity)
As a professional course, this course has a reputation of being the sector with ‘all the money’ and experts predict a far more growth in this particular specification of MBA, both as a career and as a part of the ever-rising Business Corporate houses.
Many colleges in India offers either a full two year Post graduation course in MBA or PGDM programmes accredited by AICTE or UGC. The aspirants comes from a mixture of people with both previous working and non-working background. The programmes offered are generally full time, part time and executive education programmes.
A few of the Examinations like CAT, MAT, XAT are the most appeared for examinations which acts as the benchmark for admissions into the premium MBA Institutions of India like the Indian Institute of Management, which are set up in many major cities across India. The IIMs offer a Post Graduate Diploma in Management and not a Degree as the Indian law permits only Universities to award Post Graduate degrees, which IIM is not.
As a trending career, MBA has a large number of specialisation, which are not equally sought after by the Students as of yet, but will soon do when there will be a rise of demand for such specialisations.
Need to revamp Management Education
In the latest ‘World Talent Report’ by the Switzerland-based IMD, a top-notch global business school, India slipped to the 48th position out of 60 countries from the 29th place it held in 2005. One of the factors behind the drop was the failure to match the needs of the business community. Experts feel revamps in the management education to make it relevant to the present and future business needs of the country.
Update the curriculums
– Mark Driscoll human capital leader, PwC India
The Indian education system largely focuses on the academic curriculum without practical business exposure. Every country has challenges wnith raw talent, but India’s challenges are expanded by creating a huge number of virtually unemployable graduates who are ill-prepared for the global business stage, says Mark Driscoll. “With little practical knowledge being taught in many management schools, I would expect our ratings to continue to fall compared to other countries.”
He adds: “Also, one of the main reasons why we have been falling in our ratings is because we haven’t seen recurring change in curriculums by educational institutes. They continue to teach the same thing as they used to earlier. Universities always need to upgrade their curriculum keeping in mind the fact that global companies are entering the Indian market and they are looking for talent that can work under those circumstances. It is important how colleges prepare students to accept those challenges offered in a global competitive market.”
A big challenge for Indian management programmes is that students directly move out from colleges and attend management schools without proper knowledge of what is required of them in a job environment. “We end up having a lot of not-employable workforce due to this reason,” says Driscoll.
“People who are already part of the workforce and do not have the time to go back to school—the executive MBA programme option is probably good for them. But the problem arises when you do not put anything to use which you have learnt as part of the course. Unless used, the degree’s value reduces extremely faster,” he says.
Increase faculty members
chairperson, postgraduate programme in management, IIM-Bangalore
There are supposedly more than 3,000 business schools in India, but the quality of education falls dramatically after the top 10, says Sourav Mukherji. The biggest bottleneck for good-quality management education is the low number of faculty members. “Our system doesn’t encourage enough bright students to do their PhD and become teachers in management institutions,” he says. Also, in general, teaching is not a very financially attractive profession; the offers from the industry are much more attractive compared with what a business school can give, he says.
Another problem is that Indian students get into management education at a very young age compared with the West, where people generally go to business schools after gaining some work experience. “The lack of experience creates a bit of disconnect with the kind of problem-solving that the industry wants,” says Mukherji. Students are not able to relate to the subjects from their life experience, making such inputs very theoretical.
For a country of India’s size and for economic growth, we need at least 100 good business schools, he says. “Unless we have about 50-100 good schools, we will not have enough good managers,” he says. If you are able to create good-quality schools, you will be able to attract good-quality students to do their PhDs and become teachers in those good schools, he adds.
The industry too needs to invest a bit, both in time and resources, he says. “Overall R&D (research and development ) budget of most organizations is low, and so is their tendency to invest in something long term,” says Mukherji. At the same time, academic institutions also need to open up and have discussions with the industry on how the two can work together in solving problems of practical significance.
Monitor the teaching
– R. Venkataraman group managing director, IIFL Holdings
India has produced some of the best managers occupying top decision-making positions in renowned multinational companies. Prem Watsa of Fairfax Financial Holdings Ltd,Satya Nadella of Microsoft Corp. and Indra Nooyi ofPepsiCo Inc. have managed to climb the organizational ladder and reach the top spot. Global talent rankings, however, paint a dismal picture, says Venkataraman. “One would wonder—if there are so many people who have succeeded globally, why does India fare so badly in the international rankings?” he says.
Indian management and technical education are largely theoretical, based on logic, mathematics and encourage rote method of studying, says Venkataraman. “As a manager, however, you need soft skills as much as the domain knowledge. This results in the process of un-learning and then learning on the job again. Hence, it takes another two-three years for the company to make an employee task-ready or to groom him for a managerial position,” says Venkataraman. Globally, institutes offering management education lay emphasis on work experience before enrolling for the course. “This accentuates managerial skills of students and helps them to use their precious management learning at work,” says Venkataraman.
Second, a large number of Indian management graduates are not trained or inclined towards sales and operations roles, which are basic business functions and help in building a successful enterprise. “Most management graduates want to take up strategy roles alone, which may not be the best option for them to start their career with a firm,” Venkataraman says. A system needs to be put in place to monitor the quality of the curriculum and coaching at management institutes.
The problem with management education in India
– S.L. Rao, author of ‘From Servants to Masters:
The Evolution of Professional Management in India’
Management is a much sought-after field for Indians. Today, the best and brightest students want to study management because it is a sure way to well-paid jobs with great prospects for advancement. In 2008-09, there were over 102,000 students studying for a Masters of Business Administration or its equivalent. But are management schools up to the challenge of providing able recruits to companies that need them the most?
The short answer is no. Many of the 2,000 or so management schools recognised by the All India Council for Technical Education (AICTE) have minimal faculty, most of whom have little practical experience in management and who undertake little research of decent quality. Also, a scant 250-300 management schools allow themselves to be rated—something that would make for easy assessment. Management schools should be at the apex of management education, for older students with work experience, but that isn’t so today.
Moreover, instead of focussing just on B-schools, it is vital to improve other education streams like commerce education, and management orientation in professional courses like accounting and secretarial studies. These constitute the base for the thousands of managers in Indian enterprises who need grounding to make an early and positive contribution as managers.
However, the most serious problem with management today concerns the placement of B-school graduates. In 2007, there were 12,500 or so unlisted companies in India— including public sector firms, banks, financial enterprises and service companies. The top 75 of these compare with the best of the listed companies. Most of the others, however, show poor performance in sales growth, profit ratios and consistency in overall performance—but that is where management graduates should be found playing a positive role.
Having been associated with over 35 companies over the decades, I have noticed that most holders of MBA degrees are targeting—and are targeted by—consultancy firms, multinationals and finance outfits. The huge requirement of the rest of industry, including infrastructure services, real estate, small scale units, NBFCs and educational organisations, amongst others, are largely met by graduates and post graduates in commerce, economics and engineering.
The small number of management graduates in relation to the total need produces another problem: it makes many of them feel superior and arrogant. They complete MBAs in their early 20s and often get multiple job offers. Monthly remunerations can get as high as Rs 5 lakh a month. These schools are evaluated by the media, employers and students based on how quickly students get placed and how big their pay packets are. Thus, greed is inculcated at an age when idealism should be.
Sumantra Ghoshal identified this, saying: “We as business school faculty—need to own up (that)… it is our theories and ideas that have done much to strengthen the management practices we are all so loudly condemning.” Recent excesses in the US and elsewhere, especially in the financial sector, involved many MBAs and had roots in ideas developed in business schools.
If managers seek ever-more inventive ways of boosting share prices, paying themselves over the odds for doing so and offloading the costs on to society, they are just doing what B-school courses on strategy, transaction cost economics and agency theory have taught them— which is to maximise the value of a company, product and themselves. Management education must focus on society and social good, not merely on building corporate bottom lines at any cost.
Blow to B-Schools 93% management graduates unemployable: Study
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 unemployable resulting in these pass-outs earning less than Rs 10,000 a month, if at all they find placements, an ASSOCHAM study has pointed out.
Expressing concern over the decay in the standards of these B-schools, many of which are not properly regulated, the study by the ASSOCHAM Education Committee (AEC) noted that only 7 per cent of the pass-outs are actually employable in India excepting graduates from IIMs.
India has at least 5,500 B-schools in operation now, but including unapproved institutes could take that number much higher. The ASSOCHAM report says that only 7 per cent of the MBA graduates are actually employable. Around 220 B-schools had shut down in the last two year in cities such as Delhi-NCR, Mumbai, Kolkata, Bangalore, Ahmedabad, Lucknow, Hyderabad, Dehradun etc. And at least 120 more are expected to wind up in 2016. Low education quality coupled with the economic slowdown, from 2014 to 2016, campus recruitments have gone down by a whopping 45 per cent.
“There are more seats than the takers in the B-schools. This is not surprising in the wake of poor placement records of the pass-outs, “ASSOCHAM Secretary General D S Rawat said.
In the last five years, the number of B-school seats has tripled. In 2015-16, these schools offered a total of 5,20,000 seats in MBA courses, compared to 3,60,000 in 2011-12.
Lack of quality control and infrastructure, low-paying jobs through campus placement and poor faculty are the major reasons for India’s unfolding B-school disaster. “The need to update and re-train faculty in emerging global business perspectives is practically absent in many B-schools, often making the course content redundant.
Only 7 per cent of MBA graduates from Indian business schools, excluding those from the top 20 schools, get a job straight after completing their course, adds the findings of the report.
While on an average each student spent nearly Rs 3 to Rs 5 lakh on a two-year MBA programme, their current monthly salary is a measly Rs 8,000 to Rs 10,000. Even the quality of IIM/IIT students coming out now compared to the last 15 years has come down due to the quality of school education. The faculty is also another problem as few people enter the teaching profession due to low salaries and the entire eco-system needs to be revamped.
ASSOCHAM said that the mismatch between aspirations of students and their level of preparation are crucial as most of the fresh graduates are afraid of getting their hands dirty. The flaw lies with the negligible hands-on training provided at Tier 2 and 3 colleges. Rawat further said that the quality of higher education in India across disciplines is poor and does not meet the needs of the corporate world.
Of the 15 lakh engineering graduates India produces every year, 20-30 per cent of them do not find jobs and many other get jobs well below their technical qualification.
There is clearly a rush towards engineering, that which is engineered largely by parents and the society. Indian economy is not growing at the same rate as the number of engineers. It is only the IT sector that absorbs engineers in large numbers, between 50-75 per cent. There is a large mismatch in the aspirations of graduating engineers and their job readiness. 97 per cent engineers aspire for a job in IT and core engineering. However, only 18.43 per cent employable in IT & 7.49 per cent in core engineering, adds the paper.
offering an added edge to almost every academic discipline, management tops the priority chart for students pursuing higher education. That’s not all; along with students, many professionals, too, are keen on taking up management courses and executive programmes to upgrades their skills from time to time. Management training has emerged a core academic and professional discipline with industry looking forward to experts giving insights to students as well as professionals. While B-schools in the country are giving their students field experience to bridge the gap between academics and industry, many corporates are organising management training programmes to keep their employees abreast with latest changes.
Indian management education is evolving, incorporating global trends combining them with the needs of local industries. That’s a reason as to why many management specialisations have emerged for students providing them a plenty of options to choose from. While choosing management as a career avenue, it is important to look at specialisations as per one’s inclination. When it comes to MBA specialisations, finance remains one of the popular choices of a large number of Indian students because of bright job prospects within the country as well as overseas. However, many offbeat specialisations, too, can lead to promising careers.
Keeping itself abreast with the latest developments, management education in India is trying to match the global pace of development. With ambitious policies like Make In India, Digital India and the recently launched Startup India, the world is looking at this country as a potential talent pool. As the expectations from the industry have risen, experts feel that it is high time management education in India raised its bar to cater to global challenges.
Emerging fields like e-commerce, technology, healthcare management, retailing and corporate communications are increasingly becoming part of curriculum along with traditional disciplines like human resources, finance, insurance and administration.
With India emerging as a brand talent pool for corporates worldwide, management education is stepping up to embrace global trends weaving them with contextual Indian set-up.
Management Education Stepping up to embrace global trends
However, management experts have emphasised on incorporating demographic features in management besides going global. In a diverse country like India, agriculture and rural management should be part of management education in India, experts say. Even in the 2016 Union Budget, the government has increased allocation for rural development.
A recent survey says that e-commerce continues to be the most favourite specialisation for MBA students. The Nielsen Campus Track Business School survey ranks Ecommerce as the most popular career destination. Students across 35 top B-schools voted it the most preferred sector for employment for the second year in a row.
According to the survey, as much as 30 per cent of the students from the 2016 graduating batch indicated e-commerce as their top choice for employment, about two per cent higher than the previous year. Banking, financial services and insurance (BFSI) also saw an increase in the traction with 25 per cent job aspirants four per cent more than the last time favouring the sector. IT, too, is being picked up by about 25 per cent, as compared with by 17 per cent last year.
Digital economy and ecommerce have thrown greener pastures open offering an array of job opportunities. Experts predict the trend of NRIs coming back home for better career opportunities. They, however, caution management aspirants to choose right Bschools. According to academicians, a right management programme is more important than walking out with an MBA degree from any college. A right management programme comprises a right business school, competent faculty, industry-academics interface, field work and better employment prospects.
Experts believe that Indian management education will wade its way through umpteen challenges it is facing at this point. Indian management education is all ready for transition accommodating global trends and Indian insights, avers P C Shejwalkar, professor emeritus of commerce and management science. “Thanks to the quantum jump in science and technology, the knowledge of management discipline becomes obsolete at a very rapid rate. Therefore, it becomes necessary to give a new face-lift, not only to the curriculum of management education, but also to the methods of interaction with students. Management education has a role to play in nurturing future leaders who will have an impact on society. Indian management education is heavily dependent on western management theories. But in the era of globalisation, we need to acquire the art of providing education catering to local and global trends,” he says.
Shejwalkar asserts that digital media and technological evolution have changed the face of management education today. “Indian management education needs to evolve accordingly. It is a concerted effort B-schools, students and industry. In my opinion, leading business schools must lead by example and impart management lesson through possible mediums. Experts in the field should also lend their expertise to B-schools to mould sharp managers. It’s high time we reviewed Indian management education to match global pace,” Shejwalkar adds.
Alessandro Giuliani, managing director, MISB Bocconi, says, “In a fast changing country that needs disruptive enhancements, Indian management education has a fundamental role to play. It can be done by shifting from mere model teaching to a thorough thinking approach, where future managers learn how to focus on the final output and challenge themselves into developing strategies and models around them. If Indian management education does not take this leap, the whole country may have a setback. International exposure and faculty, corporate projects and soft skills need to be integrated in the core activity of B-schools.”
Nitin Putcha, CEO, ITM Group of Institutions, says, “B-schools should be the seedbeds of entrepreneurship and innovation and educators should be encouraging and training aspiring entrepreneurs. There should be programmes nurturing and supporting students as budding businessmen. B-schools can set up an infrastructural ecosystem to float startups. Entrepreneurship is the solution for India’s economic and social challenges. It alone can make Startup India and Make in India a success.”
Rajan Saxena, vice-chancellor, SVKM’s NMIMS Deemed University, says, “Management education has to be contextual. Socio-cultural and economic environment of the country define this context. With campaigns like Make in India emerging, new inputs into curriculum should be incorporated. A new mind-set of global quality, customer care, and responsible global citizenship has to be developed among graduates. Management Programs should have inputs in entrepreneurship.Bschools should also have industry interface.”
IIMs :Mentoring Comes at a Cost
The he government’s plan to set up more Indian Institutes of Management (IIMs) under the mentorship of the old ones is likely to aggravate the faculty crunch in the existing IIMs. As a mentor institute, the faculty members from older IIMs are supposed to travel to the new IIMs, conduct classes there and fly back to their home institutes. Given the fact that these new IIMs start operating with no faculty members of their own, on an average the mentors need to share a minimum of 18 faculty members, depending on the number of courses in the first year. “Though we need to handhold the new IIMs for a brief tenure, the Centre should address the faculty crunch that we are already facing, before they get more IIMs on board,” says Professor Rishikesha T Krishnan, director, IIM Indore. Each new IIM would be requiring about 12 faculty members to start with and about 20 in a year, he adds.
The mentor institutes are supposed to share faculty members with the new IIMs till the new ones are self-sufficient. Unfortunately, the prescribed ratio of 1:10 is not fulfilled by most of the older IIMs. For instance, IIM Indore, which had to mentor IIM Raipur and later IIM Udaipur, has 74 faculty members and 1,450 students on campus. Similarly, IIM Calcutta houses 90 faculty members and nearly 1,150 students; IIM Lucknow has about 1,200 students and 82 faculty members. IIMs Ahmedabad and Bangalore with 1,000 odd students and 107 and 101 full-time faculty members, respectively, and IIM Kozhikode, with 64 full- time faculty members and about 700 students, are doing slightly better.
This shortfall leaves no scope of interaction between the faculty and students beyond classrooms in both the mentor and mentee institutes. “The faculty members are not available when they are needed in mentoring institutes. In mentee institutes, too, students cannot reach out to the faculty members to seek guidance on projects and extracurricular competitions. Faculty should be able to guide students beyond the classrooms. Most IIMs launched in the second round are still dependent on mentors. In a way, the concept of a fully residential programme is been violated,” says an IIM source. With the HRD ministry’s proposition of setting up six more IIMs in Odisha, Bihar, Andhra Pradesh, Maharashtra, Punjab and Himachal Pradesh, fighting faculty crunch could worsen, given the problems faced by existing IIMs in recruiting and retaining faculty. The IIMs in Rohtak, Ranchi, Raipur, Trichy, Kashipur and Udaipur set up during 2010-11 started without bare minimum facilities of a campus and faculty members and had to be dependent on older IIMs for support. After five years of existence, these IIMs have been able to recruit 30 faculty members each, on an average. IIM Kashipur and IIM Ranchi have less than 20 full-time faculty members. Retaining faculty members in Rohtak is a problem because of lack of proper schools and colleges available here, “therefore leaving no scope of settlement of faculty members with their families,” says Professor P Rameshan, director, IIM Rohtak. Faculty recruitment is an on-going process, but basic land and a director should be there before they start a new IIM. Recruiting a few faculty right at the beginning would be a boon, he adds.
“To attract good faculty, an institute should have the capability to offer good consultancy work for them, which we couldn’t, because of the locational disadvantage. Even paying the faculty members was a challenge. The board did not approve extra pay for conducting classes for the executive programmes. We got 50% of our faculty members from our mentor (IIM Calcutta) and the rest from other institutes,” says Professor MJ Xavier, former director, IIM Ranchi. Faculty members from mentor IIMs get Rs. 10,000 per hour for conducting classes at the IIMs, he added.
To add to this, travelling to any of these new IIMs is an ordeal. This does not only affect mobilisation of industry interaction for students, but is also a time-consuming task for faculty members who need to take classes in two different IIMs simultaneously. “The faculty members are overworked and left with no time for research and upgrading of their own knowledge. They still need to continue as the institute has agreed to mentor a new IIM,” says the IIM source. A considerable amount of the mentor institute’s allocated budget is also spent on travel and boarding of the visiting faculty members.“If they cannot sustain the existing IIMs, why do they have to get newer ones? On financial grounds, the ministry had promised an additional amount of more than Rs. 100 crore to a few newer IIMs, but with these new institutes opening it has to be seen if the money will come in,” says a highly-placed IIM source.
As per recent developments, IIM Bangalore is set to mentor the IIM to come up in Andhra Pradesh, IIM Calcutta will handhold IIM Odisha, IIM Indore will mentor IIM in Bihar, IIM Lucknow will look after the IIM in Himachal Pradesh, IIM Ahmedabad will take care of IIM in Maharashtra and IIM Kozhikode will be mentoring the IIM in Punjab. “We usually offer support from the admissions process to curriculum design to helping new IIMs set up systems in the first few years apart from, of course, having our faculty teach there too. It is expected of us as an older IIM and we are glad to do this,” says Professor Devanath Tirupati, dean-academic, IIM
Bangalore. On similar lines, Prof Saibal Chattopadhyay, director, IIM Calcutta says, “Even our own resource might be a constraint but it is a national call and we will try to mentor them to the best of our ability.”
And, as per talks, the new IIMs coming up in these states are far from city limits with proposed cities including Sambalpur in Odisha, Bodh Gaya in Bihar, Visakhapatnam in Andhra Pradesh, Nagpur in Maharashtra, Amritsar in Punjab and Sirmaur in Himachal Pradesh. The issue of connectivity remains an issue. The locations however, are yet to be finalised.