Why do you need MBA?

MBA is not about sitting in air-conditioned offices with a secretary and drawing up strategies. The business career requires hard work, long hours, stress and field work, at least for first 10 years in career. But on the whole MBA is today a better and prestigious replacement for general masters degrees like M.Com, MA or M.Sc unless a person wants to go in these core areas for specialization, research and teaching careers. If one manages to get into one of hyped up and so called prestigious institutes like IIMs, one gets a better placement with starting package of at least Rs 8-10 lacs per annum depending on one’s background, performance and qualifications. One should first define goals for doing MBA. Higher packages mean more instability and more stress.

The Institutes don’t publish cases of large numbers of failures. It is unfortunate that forming a separate elitist class the senior executives of MNCs and other big Corps go for only these so called elite Institutes( in terms of funds they spend) only and patronize them ignoring large talent pool available easily and cheaper, across the country. It is also unfortunate that in pseudo-liberalization process, our planners have let go of technical education reigns and institutes are charging huge fees since last 4-5 years that is illogical and tantamount to fleecing as they hardly deliver quality, standards and resources. It is becoming difficult for average student to find right kind of institute and fee combination. It is presently free-for-all. Hence it is important to set goals and introspect one’s ability and past academic record and finance available. Don’t be carried away by false and exaggerated claims and marketing about Placements by most of these institutes and burn holes in your pockets.

The scenario:

More than 2 lac students currently seek admissions in various types of Postgraduate programs in management area in India. Due to huge demand created over last 10 years a large number of Institutes have mushroomed all over the place as also new private universities opening by tens of numbers every year (More than 1300 schools or institutes in India for MBA/PGDM). The result is confusion in mind of students and parents as to what to opt and what to avoid.

The answer to this is complex but it would be pertinent to understand that higher technical education like B Tech, MBA, MCA, Hotel Management or Pharmacy need a genuinely good set up, own spacious campus, a practicing and experienced faculty and several other resources and on top of all a recognition of the degree or diploma from appropriate agencies. Brand matters. University name itself is a brand in its own right. Otherwise, unapproved diploma is just a piece of paper and wastage of money. Have a long-term view and don’t fall for some job arranged by such fraudulent setups.

They normally argue that IIMs are not approved, which is materially false statement and if these institutes are so good why don’t they get approval from AICTE anyway? The reasons for not doing are clear. They fleece students and have poor standards and infrastructure but have outward glamour and show-off lists only. Greedy and failed businessmen and executives or academicians run most of these. It does not mean that all AICTE approved or affiliated institutes are of good quality. But they at least give recognized diplomas or degrees.

Brand value is very important in this, which will carry on with the students for whole active life in their work or employment.

It is unfortunate that three things have happened over last 2 decades in India:
Reckless expansion of education called industry (I would prefer it this way) and entry of profiteering and unethical persons including failed businessmen due to cash nature of business, huge profits due to failure of government to regulate education properly and the tax free income in name of trusts. The control on fees and quality has deteriorated in this milieu.

We should understand that purpose of technical education is three fold

1. To impart good skills based on practical knowledge and theoretical grounding.
2. Recognition of degree/diploma by the general pool in society
3. In case one is looking to go abroad after completing the course, it is all the more important to have a recognized and approved degree or diploma.

The available models

So many models have come up in India and it is difficult for students to evaluate these.

1.Autonomous private Institutes giving PG diplomas of all sorts like PGPM, PGDM, PGDBA and several variants to expand seats like MBA-HR, MBA-IB etc.

2.State owned universities giving Degrees like MBA and other variants too.

3.Private owned universities under amended UGC Act giving MBA and its variants

4.Deemed Universities (or the erstwhile Institutes) now giving MBA and its series

5.Private colleges affiliated to state universities who in turn give MBA to their students

6.Autonomous colleges that are not universities but still give degrees on their own.

7.Now a day every second engineering college has also started MBA program under the AICTE scheme and treat MBA just like existing undergraduate programs. Avoid these.

There are good and bad eggs in every basket. Unfortunately bad ones are more in number in each group currently.

Beware of distance learning programs camouflaged as regular campus programs:

Besides the above set up many organizations run distance learning courses by bypassing laws and without any proper approvals but pose before the prospective students as if they impart campus based degrees. This is incorrect.

Some Universities are giving courses all over India by opening own or franchise centers in hundreds in most of cities. These are set up by breach of law, have very poor standards and are meant only to fleece students. It is a mockery of PG level higher education. With or without authorization they run private candidate programs through shadow institutes.

IGNOU Delhi is apex open university of country and member of world association of universities too. Many states also have open universities for Graduate, PG and PhD programs. A number of States owned universities also now run full-fledged Distance education department right up to PhD level courses.

What to choose?

Hence in nutshell the advice would be:

1. To go for a full time campus-based education for MBA program, particularly if student is fresh graduate and not experienced.

2. Avoid colleges and institutes that are part of countrywide network with hundreds of such centers. These are in contravention of laws and are badly managed with huge fees. There is no such model anywhere in the world. Each center for MBA program has to be a full campus as per AICTE norms at minimum level.

3. Choose independent or autonomous Institutes that are AICTE approved only and preferably NBA accredited and Association of Indian Universities (AIU) recognizes their diploma as equivalent to an MBA program. Only 35 odd institutes are having such equivalence (see AIU handbook).

For non-approved institutes list, visit AICTE website.

Your preference should be State universities campuses first as these are cheapest and carry their own status and prestige. But here entrance is tough. Then private universities as these give MBA degree and then next go for Affiliated private Institutes who are under control of Universities and give MBA at a reasonably fixed fee by state governments.

Those who are in service or own business or having completed a tenure like army men and can’t attend campus for 2 years can opt for evening programs for 3 years duration or opt for a distance education programs that are essentially approved by Distance Education Council of India. There are also ‘Executive MBAs’ meaning fast track programs available from even prestigious institutes like IIM Calcutta with shorter duration like 1 to 1.5 years for those with some managerial experience and good degree. But they charge too much that is illogical and uncalled for.

It is unfortunate that a number of technical universities and state universities besides some private organizations have opened hundreds of centers all over the country basically in distance mode (Government does not permit campus programs like this) charging huge fees and doling out sub standard courses without approval of Distance Education Council, UGC or AICTE. They even conduct multiple-choice examinations like in entrance tests in a mass mode. Beware of such programs and just avoid these.

Remember the hierarchy of preference:

Full time campus MBA degree of a University’s own faculty/IIMs ® Full time affiliated college® part time or evening MBA of a university campus ® AICTE accredited/approved PGDM program ® distance learning mode MBA/private candidate program

What resources to check in Technical Institutes?

Faculty: In my view and long experience. Due to foolish rules of insisting for PhD type degrees for Directors and Professors also in technical education area, which is essentially experiential in nature and a practical course, retired University professors not even from management field have captured the technical education sector in India. In fact most of these institutes are run and managed by outdated and irrelevant academics in post retirement age. These institutes and private universities have become recluse or sanctuaries for such persons. You can’t expect much from them. Indian technical education is run like other general-faculties ‘teach and test’ mode and has very low quality. Just imagine a doctor not doing operations teaching heart surgery.

This must be changed and students and their parents and the companies can only bring around the badly needed changes. But students and companies should see that at least 50% of regular professors in an institute have at-least 10 years of hardcore industry experience background at senior levels. This is absolutely must, as in India academics have no interaction with industry unlike in USA where most professors are consultants and researchers too. The standard of education in India generally and PhD in particular is highly substandard or even pathetic.

Other resources in Institute must include-LCD projectors and air-conditioned class rooms, air-conditioned faculty room & library and Computer labs, high speed Internet (cable or wireless) with at-least 4 Mbps bandwidth for a 60 seat institute and available 24 hrs, 60 computers lab, a 25 seat canteen, common room and 5000 to 10000 books in library depending on age of the institute. There should be at-least 12 permanent full time faculty members for a 60-seat institute including 2 professors one each from academic research and from industry stream. Out of these 50% should be there for at-least 3 years duration. The faculty is paid AICTE grades as revised from time to time or not. Because, the salaries of teachers is very low in India and good candidates are not attracted to teaching. Hence if Institutes keeps low salaries and don’t pay even recommended scales by UGC and also fast rotate teachers to save money they are sure going to get rejected lot and low standard material as faculty. This is a serious national and ethical issue and should not be ignored by all stakeholders. It is hard fact of life.

The institute should subscribe to at least 10 and 40 International and national journals and periodicals respectively. Some institutes give textbooks, as part of package (not costing more than Rs 15000 for entire two year course) and it is a good practice. Notes and cases should be provided by institute and not be charged from students. Library should have photocopiers.

The Institute should have free space around buildings and ample parking space. It is essential that MBA students get single or maximum twin shared well-appointed air- cooled or air-conditioned rooms in proper hostel with hygienic well-maintained mess and recreation facilities like gym, common room and games.

At-least one Guest lecture should be held every week for at-least 30 weeks in the year.

Keeping in view global businesses emerging, it won’t be a bad idea if institute conducts a 30 days overseas trip where students can have both fun and interaction opportunity with some business enterprises and institutes. For this an additional expense of around Rs 1.5 lacs is worth the value of money, if a student can afford it.

The issue of High Fees

As regards fees, India is now one of highest fee charging country in the world especially after current UPA government recklessly allowed IIMs to hike fees. The ripple effect started and every Institute increased fees to very high level. These institutes with little authenticity and inadequate resources are turned into mining machines for money for owners. Although education by principle is no –profit business all sorts of greedy, corrupt and failed executives and businessmen have also entered in this money-spinning business without nay government control.

In any country the cost of higher technical education should not be more than 3 times its per capita income. Hence it is inappropriate to charge more than Rs 1.5 lacs fee per year even for the best of institutes. In this amount best education can be given in India even in metro cities (as they have more seats too). Any thing charged more than this is fleecing and students should resist this. All over the country students are being fleeced. Institutes are essentially non-profit venture with modest buildings and not for opulence. They should mobilize donations like in USA. Both UGC and AICTE have miserably failed in this protection for students. The argument that bank loan is available is rubbish. Will you buy a Maruti 800 in Rs 3 lacs just because bank loan is available?

Teachers are paid very low salaries and they are changed frequently. No benefits and perquisites are allowed to them. Hence quality of teachers is bad and they are not motivated at all. There is hardly any industry interaction and research. Their retirement benefits are non-existent. It is a pathetic situation and shameful.

Hence students should ensure that they are entering properly managed institute or university with right kind of faculty and properly equipped resource and infrastructure.

Role of Corporate sector:

The author belongs to corporate sector and has been workin at senior positions.It is painful to see that corporate organisations blindly run after a few Institutes which are basically hyped up and have little to offer more than other upcoming institutes in terms of value addition.No doubt that input to IIMs and other handful premier institutes,as called by media)is a bit higher than most others, the salary difference is rather too yawning a gap to be justified.It is ridiculous to pay a start up from whatever institute in India a salary of rs 15 lacs per annum whereas per capita income of India is hardly 40,000. Basically such stupid and unjustified salaries led to heartburn in bureaucracy and their salaries have been hiked by 40 top 100% recently causing inflation in country.Indian corporate sector should also understand the trap they have walked into.Increasing manpower cost and running costs have made them in competitive globally.India had only cheap labor rates as global competitiveness.this was systematically decimated by Western lobby by jacking up salaries to Indians which was blindly followed.It is time that corporate sector in india come back to sensible level of salaries and also do home work and go for widely spread talent all over India.If we look a t radical and abstract contribute to new knowledge creation or grass root improvements, these hyped up institute graduates have little to show over last 3 decades.The difference in competence is barely visible.Anyway.Corptare sector should also participate more heartily in delivery guest lectures, giving project work and do joint research work with technical institutes in their own long term interest and also fund such programs to reduce costs and fees and improve quality.that is how USA works.

The Institute Rankings

The students should take various Institute ranking surveys with a pinch of salt, as these are not always showing real position for various reasons. It is better to make a check list of points and also enquire from senior students, alumni and from other sources like education counselors of repute and the faculty.

Placements are often supreme criterion for student while choosing a B school and rightly so. But it is not primary duty of institute to arrange placements. Institutes are meant for cultivating good habits, impart good domain knowledge and soft skills and engage students in practical work, projects and develop their personality. Besides, the placement data of most of institutes are manipulated, exaggerated and even false. Students should

be aware of this. They should check on these claims. Even summer training and final placement companies are mixed in list. Same way visiting and part time faculty is shown as core faculty on websites and in prospectus. Students must check on this too.

If students after taking admissions find that claims were false and if standards are not as prescribed by regulator, they should seek refund and go to consumer court for justice. They should not be afraid to do that.

The admission process:

A large number of entrance test are conducted by various agencies. CAT and MAT are most common Pan-Indian tests. CAT is held by IIMs once in November while MAT is held quarterly by AIMA. I have doubts over relevance of making CAT unduly tough and its utility in selecting students. It is more of hype than logical. Many States still hold their own tests, which is incorrect. Many universities and institutes also do their own test just to show a separate class. But it is meaningless and wastage of student’s money and time. Government should keep only 2 tests in country for all institutes and universities. The results should be valid for full academic year i.e. from July to June.

Once a student gets through good percentile in such test, they have to appear for a Group Discussion and Personal interview session. In most Institutes such GD & PI are mere rhetoric and almost every one is sent letter of selection, later on. Beware of such fraudulent institutes. In state controlled institutes, it may or may not be conducted at all. They generally call admission day a ‘counseling day’ just to allocate institutes on merits.

One thing is clear not only private sector institutes have to deliver much higher value and facilities than present but also keep moderate fee levels and not treat the higher education as profiteering business. Till such time I would recommend students to first opt for good state or private university programs in regular campus based, affiliated institutes, part time and distance education mode courses that are relatively cheap. If you hope to enter teaching later on or in a MNC type organization, never waste time in distance education and private candidate system.

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