Is MBA the most Overrated course?

When I was pursuing my under graduation, the department responsible for bringing in companies called itself the placement cell, and the transition when I entered the B-School was that, they hailed themselves as the “Career advancement and networking” office. Yes, you read it right. It's called "networking”: If you thought MBA graduates got high paying jobs on graduation because they were highly qualified, think again. While in college, the students are busy networking and catching up with the old boy's network. This way, most of them can be assured of a good position once they make their way into the field. This is only to begin with. My next concern is, how important is a good business education when it comes to reaching the top echelons of the business world? Not much at all!

Now let us think of the actuals- Figures vs. big talk: Most MBA schools like to openly tout the "fact" that their graduates get high paying jobs as soon as they leave college and go on to build great careers. However, only about one in every 4,000 alumni of the top 10 MBA programs were among the highest-paid executives. Time and again the B-School ensures that they fabricate the figures and invite more applicants for the next season. Let us look at the business side of this education. I certainly don’t find a reason for the business schools to “charge” a premium. Yes, you have faculties who in turn have got a MBA degree who needs to be paid, but apart from that?

The question now arises – if the institution must show its potential students historical data of past student’s salary or show the market potential what the skill set can demand. In this case, let’s say a university “X” gives a picture of 18 Lakhs per annum as the highest salary, let me ask is it the HIGHEST? Definitely not. So, even before entering the B-School we can learn that marketing is all about being clever and it is an art of deceiving and playing with the outwardly directed ego needs of the consumer.  

Now, Business schools may be unsuccessful in creating curricula that help their students face the challenges of the business world, but the schools themselves are models of business success. It may seem paradoxical but universities like Harvard, IIM, or Stanford realized early on the importance of a hard sell. They have successfully created brand images that have managed to stand the test of time. Recruiters perceive graduates of top-ranked programs as safe choices in a sea of maybes.

One of the biggest reasons that MBA grads fail to perform is because they often don't have enough practical experience. Most business schools rely on outmoded teaching methods and do not afford students an opportunity for practical experience. That is when the option of Internship helps.  Most business schools fall short when it comes to providing people with an opportunity to practice what they learn. This means that we youngsters leave college with half-baked ideas that may not stand up in the real business world, but also with an expectation of pocketing a premium.

Now, I would want to add an incident which recently shook me very badly, hit me very hard with icy heart and hard head, rubbing more and more salts to a ruptured wound but trust me it was all for good. I have never had a problem with writing e-mails be it in terms of the ‘content’ or ‘format’, but had a recent incident at work place for continuous two days and it has ensured now that I start paying in depth attention to the minute details. It is good, but my thoughts are towards the fact why did this seriousness not come during my course and had to come when I actually start working? Is it only me or everyone who gets this tardy attitude to pay attention to details? Is B-Schools Creating foot soldiers, not warriors?

Guys, when you decide to go for an MBA, definitely the first week will pass by in professors walking in and asking about your decision for doing MBA. An MBA degree alone doesn't help you succeed: If an MBA education is useful training for business then, as a matter of logic, having an MBA degree should be related to various measures of career success and attainment, such as salary. Also, what you learn in business school should ideally help you be better prepared for the business world and more competent in that domain. This means, if your business school has actually conveyed professionally useful knowledge, then your grades will act as a measure of how much you have learned or mastered the material. It follows that your grades are somewhat predictive of various outcomes that index success in business. All you need to do is to check the credentials of the managers who have risen to become CEOs and top managers - their grades (if any) had nothing to do with their success.

One reason that having an MBA degree may show no effect, is that mere possession of the credential may not be strongly related to your mastery of business knowledge. Recently, an investment bank was horrified to find that an MBA graduate it hired from a leading business school, an individual who had apparently taken a number of courses in finance, could not calculate the net present value of a future stream of payments. For most of these students, learning is not an explicit goal.

Business education is a "cash cow" at many universities, programs have proliferated - including part-time, evening and weekend programs; executive MBAs and expansion of existing programs. This has resulted in a rapid increase in the supply of MBAs. Although fewer than half of the schools offering an MBA degree are accredited, the fact of rising supply remains. At the same time, demand for MBAs may be falling. More supply and about the same or less demand would mean less advantage in terms of salary or other career outcomes for MBA graduates. Moreover, unlike other professions such as law, medicine, accounting, architecture and some branches of engineering, the practice of business management is not restricted to people who possess a formal credential or certificate of training. Thus, with no entry barriers into the profession - and with no entry point controlled by business schools - it is not surprising that the credential has a smaller effect on various economic outcomes.

Once in, you are assured of a degree — no matter what: In today's prestigious business schools, students have to demonstrate competence to get in, but not to get out. Every student who wants to, will graduate.

So why the rush for an MBA? Simple. The MBA comes from a Pre-screened pool. The core curriculum taught at business schools is relevant for the understanding, especially the jargon that you can use in an industry filled with old school managers. The utility of a business school degree is to provide a pedigree rather than learning and how much of learning you can extract out of it, it is definitely in your hands. They will make you read newspapers, read and analyze case studies, and if you want learning, don’t take it all as an obligation to be done but do it with curiosity. Money will definitely follow you, just don’t expect a high paying salary when you have not filled yourself with the necessary competencies.

Once you are in an IIM or Harvard, or any other top “Private” university in India or NUS, you can be assured an entry into the business circles. But that's all. From there on, only your true abilities can help you climb the corporate ladder. And this is no revelation to business schools - they've always known this truth. They only don't want to change the status quo. It is scarcely in the interests of the top-ranking business schools to change the rules of the game that have put them on top.

In your best interest, I will sum it all up - If you think only this three letter degree will take you to all the heights you want in life, I am sorry, it is only your efforts which will.