Masters in Business Administration famously known as MBA! Yes, an MBA has become the new cool thing or has an MBA become a Rat Race. Ever wondered why? Let us do a quick research. In 2015, McKinsey hired 188, BCG 138, Deloitte 119, JP Morgan 103 and Amazon hired 94 MBA graduates into their company. Further down the league, Google took on 63, Microsoft 54 and Apple whose founder Steve Jobs famously flunked college took in 29 MBA’s mostly from Duke University’s Fuqua School where Apple’s current CEO Tim Cook had earned his MBA. There isn’t a major listed company that doesn’t employ a clutch of MBAs! Is MBA becoming a Rat Race?
Apple by no means is an exception in having an MBA for a CEO. MBAs ran 165 of Fortune 500 companies. John S Watson (Chevron), Jeffrey R Immelt (GE) and Margaret Cushing Whitman (HP), topped this league. One school alone, the Harvard Business School, produced an incredible 12 graduates who are among the top 50 best-paid CEOs in corporate America with an MBA.
And it’s not just big established businesses that want to tap into the business school tool kit. The Top MBA Applicant Survey reveals that, on average, 27 percent of MBA applicants wish to run their own business after they graduate. PitchBook, an investment database shows that entrepreneurs from just 12 top MBAs founded 5,505 companies between 2006 and 2018. Some are doing very well indeed: they include 72 “unicorns,” or private companies valued at more than $1bn, such as French car-sharing service BlaBlaCar (co-founded by Insead alumni), US eyewear brand Warby Parker (Wharton) and home design company Houzz (Tel Aviv University).
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Yes, when there is so much in the offing and when you see the worth of it, the desire of becoming an MBA graduate is just natural.
Does that mean that MBA is A Rat Race?
A rat race is analogous to rats in a maze that compete against one another to be the first to get the slice of cheese. What is it that is making the MBA a rat race? Let us dive into the facts which makes MBA a Rat Race:
- MBA has become one of the most popular degrees in India, and there are many MBA colleges spread across the country that offer the degree in various formats. When the market becomes saturated, the quality of institutions also degrade, and consequently, an MBA becomes relevant only when done from a premier institute in the country.
- The number of applicants registering for CAT (Common Admission Test) 2018 to pursue an MBA was 2,40,338. But there are only 15000 seats offered by top MBA colleges in India. The numbers depict the competition that exists to grab a seat at an IIM or an IIT in the country. And the rats want to grab their slice of cheese.
- India churns out lakhs of engineers every year, but while many have difficulty finding jobs, few end up in jobs they like or with the salary that they want. For all those engineers who did not find their desired job or paycheck, MBA is their next best option. It offers the flexibility to land up in the industry or profession of their interest, wherein they can get the roles that they want, and at the same time, they are offered bigger paycheques for their work. So the number of dissatisfied engineers opting for MBA is continually on the rise.
- People with excellent skills are forced by well-meaning yet over eager and misinformed parents to take up MBA course because that’s what the next door neighbor’s son/daughter is doing. This is the case for nearly 50% of the applicants. People don’t know why they are doing an MBA. It is either friends or family that is forcing them to follow what everyone else is doing.
- When colleges are in abundance, employment is also an issue. In 2016-17, more than half of MBA graduates could not get hired in campus placements, a data by All India Council for Technical Education (AICTE) shows. Just 47% of MBAs got placement. There is a glut of MBAs in the country, and consequently, a decline in the job offers to them. Thus the race among the MBA grads to have the best jobs intensifies.
- Working professionals, especially engineers opt-in for an MBA because they believe that they can make big money after MBA. Based on various surveys, MBA diploma holders earned double their previous income and got rich faster than most other people who had just engineering degree. This is a shortcut for them to get better-salaried jobs.
A Different Perspective
While MBA may turn out to be a rat race for many of the aspirants, there might still be few of them who are genuinely interested in the offerings of the course rather than just following others or pursuing it for the sake of well-paying jobs. Here are some of those reasons:
- While everyone wants to get into top MBA institutes in the country, not everyone puts in efforts to make it through. So the competition bogs down to a small chunk of really interested students.
- MBA offers the prospect of entering the business and connecting with industry leaders and entrepreneurs around the globe. There are applicants who pursue an MBA to leverage the industrial advantage offered by these courses.
- The curriculum in top MBA colleges is capsulated in such a way that they foster the entrepreneurial spirit. The case studies, article presentations, and corporate discussions help them gain a better insight into actual business scenarios and compel them to come up with innovative solutions for existing problems. MBA, therefore, enhances their business acumen and prepares them for entering the industry with prerequisite knowledge.
- In a developing country like ours, there is a growing need for more managers. No matter what is the business is about, they always need a manager to oversee the nitty-gritty of the company and ensure the profitability of the firm. So there will still be a demand for MBAs in the country.
Management education is a lifetime investment and should only be done when one is sure of it. Yes, there are various advantages and competencies offered by B schools across the world, but the grass might always be greener on the other side. Rather than blindly following others, one should carefully think where their interests lie and make decisions accordingly.
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