Kanika Datta: The paradox of the Indian MBA degree

SWOT

Business schools have become so much the in-thing these days that most employers in India now consider it a minimum qualification for white-collar jobs, fulfilling the same function that the basic graduation degree did in the decades before economic liberalisation.

The huge demand for B-school graduates is amply reflected in the burgeoning numbers of institutes for business learning. Today there are 1,400 B-schools accredited by the All India Council for Technical Education and countless more "" of questionable credentials or otherwise "" that function without AICTE certification. In fact, the country produces almost seven times the number of B-school graduates as the UK.

India is something of a unique market in which an MBA degree is considered a career-starter. In the developed world, in contrast, it is considered a mid-career enhancer. It is an option that a chosen few consider after learning their basic skills in the real world of business.

Yet, here's the thing: ask any employer in India and s/he will tell you that the bulk of B-school graduates have a low employability value. Though rarely articulated, it is commonly acknowledged that outside of the 2,000-odd students from the premium B-schools like the Indian Institutes of Management who clearly skew the market, most Tier-II B-schools face a quality problem.

According to a 2006 survey by RocSearch on the knowledge services market, "only half of the 84,000 graduates from AICTE-approved Tier II business schools can be classified as fit to work in quality-conscious and competitive international companies".

The fact that there is an acknowledged quality gap speaks volumes for the inadequacy of the AICTE approval process, which continues to focus on metrics such as a minimum number of computers and so on as qualifying criteria rather than robust qualitative standards.

But it also says much for the nature of the education system. It is widely acknowledged that a B-school education is not an automatic guarantor of outstanding performance. So why the persistent demand for an MBA degree as a minimum job qualification?

One answer is that this is the corporate sector's way of trying to correct for flaws in the university system. Shackled by state budgets, India's notoriously under-funded universities "" with notable exceptions "" restrict their role to functional teaching shops rather than institutes of creative thought and research. On the other hand, an MBA curriculum by its very nature demands the kind of innovative thinking that crowded and stultifying university curricula rarely encourage "" and there is a lot to be said for the now much-criticised case study approach in B-schools.

Thus in India, we end up with the classic paradox of turning a specialist degree into a generalist requirement. To be sure, this basic flaw is something that those in the education business have begun to understand. That explains the rush for local tie-ups with global universities that leverage technology to provide access to world-class education through distance learning. Investing in quality education is also an opportunity for the corporate world to make a truly meaningful contribution in the corporate social responsibility space. As American businessmen understood long ago, business stands to gain the most by investing in education.

As an aside, it is worth noting that RocSearch has estimated that out of the 3 million people added to the workforce every year across the major disciplines "" MBAs, engineering, medicine, computer techies, lawyers, chartered accountants, college students and PhDs "" about 500,000 can be considered employable in an international corporate workplace. From the employer's point of view, this suggests a major leap in the premium that companies will have to pay to employees who meet the minimum employability criterion. From the employee's perspective, the gravy train just got longer!