MBA Delusions

It is only in the mid-1970s that the MBA course became popular and demand for MBAs increased. There were no written exams to qualify for admission till 1981 when IIM-A started it. This then became the CAT in 1984 for all IIMs. From less than 100 institutes then, India now has over 5000 institutes offering MBA courses. All of them together produce about 2 Lakh graduates a year. Of these, hardly 4000-5000 get very good jobs. Most get low key jobs paying 8000-10000 per month and currently some 45% of them don’t get a campus placement and have to hunt for jobs like every other graduate. PM Narendra Modi inaugurated a permanent complex for IIM Sambalpur in Odisha on January 2. From 4 IIMs in the 1990s the count has now grown to 20. With the increase in numbers, the quality of MBA education hasn’t gone up. Most of the private and university institutes are rotten and don’t even have proper faculty.

PM Modi’s expectation of management institutes is somewhat faulty and reflects rather poor understanding of what management schools are meant to do. I wonder what he meant by innovation, integrity and particularly “inclusion”. No management course teaches any of this. It seems Sickularism has made it fashionable to include the word “inclusive” and “inclusion” in everything. We may soon see a day where even the south Indian “Sambaar” has to be inclusive to include all possible vegetables. An MBA course is basically one to manage and grow an existing business. It is not an “entrepreneurship” course. What Modi is seeking from MBA schools is entrepreneurship but their course is not intended for that. MBAs are essentially “Maintenance & growth managers” intended for existing industry. A few may also turn entrepreneurs but that is not because of the course but because of their own ideas and inclination. Here’s a brief history of how MBA institutes started:

The first Indian management school, XLRI, started in 1949. One more started in 1953, then FMS, Delhi was established in 1954. Two IIMs – Calcutta and Ahmedabad started in 1961. From those beginnings it has now grown to around 5500 institutes. There isn’t a shortage of institutes. There is now a shortage of quality graduates and, unfortunately, except for the Top-30 or so institutes most of them are unemployable as management personnel:

For most students, the purpose of an MBA diploma or degree in India is not enterprise but to land a good job with a hefty salary. But a vast majority doesn’t get anything like that because of the poor quality of intake and poor quality of output. It is a fallacy that teaching at IIMs or XLRI is so great that it produces great products. Absolutely not. The simple fact is that the top institutes take in only the best of the students with exceptional academic and skill records. Such students excel with even below-average teachers. The rest have to settle for other lower level schools. Even among the IIMs, only the top 4 or 5 command respect and fat salaries, the rest do not. Many aspirants do not enroll for an MBA course if they don’t get admission to a top-20 business school:

Note the fact that students don’t wish to complete admission process in IIMs like Vizag, Bodh Gaya, Nagpur or Sambalpur. So, the PM waxing eloquent about what the Sambalpur type IIMs hold out is not entirely true. The problem now is not a shortage of quantity, it is a shortage of quality. In his speech, Modi has talked about the culture, tourism, handicrafts and local products of Odisha that might be promoted by the Sambalpur graduates. The MBA course has nothing to do with cultural and tourism nonsense unless that turns out to be your business itself in which you might work. The target of an MBA course is not to promote these things but just run a good business, manage resources and manage growth. Modi overlaps entrepreneurship with management. Both are two different things. He talked about startups that became “Unicorn” companies in his Sambalpur speech but India is lagging behind on that front:

A unicorn is a startup that reaches a value of $1 billion fairly soon. MBA schools cannot teach how to create a “unicorn”. In fact, some of the biggest business successes of the world are all people who never had formal education or dropped out of college. Some famous names are Dhirubhai Ambani, Gautam Adani, Bill Gates, Jack Dorsey, Mark Zuckerberg, Walt Disney. Steve Johs and so on. The list could go into thousands. What India needs is entrepreneurs and more MBA schools are not going to deliver that. Modi is totally under a wrong impression about that. Even some recent unicorn guys are non-college guys like Ritesh Agarwal (Oyo Rooms).

Entrepreneurship cannot be taught. It is learned only as one takes risks with guts on a startup of any kind. There is indeed an Entrepreneurship Development Institute (EDI) in Ahmedabad but the course mostly consists of processes, laws and strategies etc. There is no demand or rush for admissions to their course and it is still open for the current year. India needs millions of entrepreneurs instead of job-seekers. This can be achieved only by govts actively encouraging youth to prepare projects, help them prepare a financial and feasibility report, fund them liberally and take the risks that any venture capitalist or funder takes. There is absolutely no sense in more IITs and more IIMs anymore. Govts tout such increase as a great achievement which it is not. Govt must regulate and raise the quality of private institutes rather than waste public money on institutes that are not going to be attractive anymore. One of the reasons for the fall of output from IITs and IIMs is the level of worthless Reservation:

With almost 50% seats reserved for non-merit enrollments there is hardly any chance that IITs and IIMs will produce great results in terms of managers or entrepreneurs. There are many IIM graduates who are working in govt departments or banks or PSUs which provides them the same “security” of employment that a regular graduate seeks. Some of the institutes have become dens of Commies and run Periyar clubs with no academic performance. The IITs also run bogus courses like “Humanities” at public cost. In the last survey available, not one of India’s institutes or universities figured in the top 300 of the world.

Modi claims that his govt had opened up 7 more IIMs since 2014. This is true but it’s of no practical value other than producing more MBAs. The newer institutes have no attraction for the students and neither for prospective employers. And when they finally do get a placement, it is at very low salaries which naturally upsets the students. Modi brags about the population of Indians in the IT industry worldwide. Yet, hardly any Indian has created world-popular products like a Google, MS products or even the banned TikTok. ModiSarkar is under the delusion that they have grandly reformed education – from school to higher education. In reality, education is set to become worse in India. Not only is the quality of teaching and learning worsening, the outcomes are poor and the curriculum as stagnant as a dirty lake in one of our cities.

                                

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