The MBA Gap
Indian B-schools aren’t producing
enough managers. The evidence? According to the Centre for Monitoring Indian
Economy, there are 1,125 companies in India whose turnover exceeds Rs 100
crore, comprising 74 banking corporations, 30 financial services companies, 886
manufacturing companies, and 135 service-providers. And their collective
appetite for new managerial resources is greater than the supply.
Of the 74 banks, 80 per cent — the
nationalised banks — can be assumed to be uninterested in hiring MBAs. Let us
guess that the average requirement of the remaining 15 is likely to be between
5 and 10 managers a year. Assuming a mean of 7.50, the banking sector’s annual
requirement of entry-level managers can be placed at 113. Given the state of the
financial services sector, only about 50 per cent of the firms are likely to
need entry-level managers in the medium term. And the annual requirement of
each of these 15 companies can be pegged at between 3 and 5. Taking a mean of
4, the sector’s annual requirement is 60 MBAs.
Companies involved in manufacturing
and marketing consumer products traditionally constitute about a fifth of the
total number of players in the manufacturing sector. All 177 such companies
need entry-level managers, and their requirement is likely to vary between 5
and 10. Taking a mean of 7.50, their requirement of MBAs totals 1,328 per
annum.
Of the remaining 709 companies
involved in manufacturing industrial products, about half could be assumed to
be in the market for MBAs. Their requirement can be estimated at 3 MBAs per
company, translating into an annual requirement of 1,064. Assuming that about
75 per cent of the companies classified as service companies are actually
holding and investment companies, the remaining 34 service companies are likely
to require 5 MBAs every year. Or 170 annually.
Thus, the total number of
entry-level managers needed by corporate India every year stands at 2,735.
Apart from the IIM-L, which turns out 120 grads, all the other IIMs have a
class strength of 200 while the other institutes have an average class strength
of 60 each. But, the 21 B-schools which scored more than 40 per cent in the BT
study produce about 1,740 managers every year.
The gap, amounting to about 36 per
cent of the total requirement, proves why the corporate competition for MBAs
will only get swifter, higher, and stronger.
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