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Wednesday, May 30, 2012

Is MBA still needed to break into India Inc?

I guess I could have used a less loaded statement to convey my opinions on this topic! and yet, I do present a balanced view(to the extent possible). Recently, Citigroup India announced a graduates entry program(unusual for Indian companies though prevalent globally), thereby following in the hallowed footsteps of Unilever India, BHEL, Schlumberger and others which rely on graduates too rather than picking MBAs/other post graduates. Some other examples are the Bharti Airtel's Young Leader's Program(YLP) which also recruits  chartered accountants with upto 2yrs work experience, Kraft India's program for finance leadership and so on. So why is this trend picking up, and what does it portray for the aspiring MBAs?
  1. CAT seen as a selection tool:-Companies like CRISIL mandate CAT for their selection process, and carry out a process simillar to that of top Bschools(GD, PI, CV scrutiny). So they get the benefit of CAT score(signalling academic ability) without paying for the candidate's 2yrs in Bschool. 
  2. Less competition:-Campus selections(as done in MBA recruitment) necessarily has the company compromising on its recruitment standards in terms of time per candidate, number of rounds, spot offer vs exploding offer rules etc to avoid losing out their desired candidate to other firms. But when companies carry their own process like how BCG, CRISIL etc do, they can take their own time deciding on the candidate and subject him/her to as many rounds as possible. So from the HR perspective, that is a good thing. 
  3. Possibly less attrition:-One reason people leave their jobs to pursue MBA is the feeling that they need a MBA to progress in their company. But if they have entered the same program that MBAs do, even if at a somewhat junior level like in consulting firms, that feeling is less likely and in fact they may surpass MBAs and leapfrog the ladder. That would lead to less attritition for the company. 
  4. Larger batch size and lowered teaching standards:-thanks to the faculty wars with ISB, foreign bschools and others, many bschools have seen lowered teaching standards after the retirement/exit of star faculty. And owing to the 49.5% reservation quota which led to expansion of bschool, many people are in bschools who would otherwise not be there(this holds in full measure even for the management quota admitees). Hence, filtering the wheat from the chaff is becoming tougher even in the case of campus placements. 
  5. High expectations from MBAs:-Owing to the high fees(in millions of rupees except maybe in FMS) and society expectations, a fast track career is now the expectation of every MBA(in Abhijit Bahaduri's words 'Mediocre but Arrogant'), and when companies in this economic condition cannot or do not wish to meet their expectations, those MBAs leave when things look up(as PSU banks realized at their expense after having hired MBAs in 2010 from IIMs). So companies prefer hiring graduates to hiring from lesser ranked bschools.
the above 5 reasons can explain why more companies are gravitating towards giving graduates(albeit the creme-de-la) an equal shot at the positions previously reserved for MBAs! That does not mean that they are right or wrong in doing this(that is the company's decision), but it does mean that the job pool for fresh MBAs on campus, will only shrink in the years to come. So pull up your sleeves and go to work, instead of whiling away those 2years on campus!

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