The obsession of Indians with the MBA degree

Over the last couple of days, I was getting some updates about friends-family in India, while talking to my mom. During conversation, my mom mentioned about two recent graduates, who’s campus placements (in IT companies) were deferred due to the uncertain economy. And so, they were considering pursuing – applying for an MBA in the meanwhile.

And for some reason, that topic lingered on in my mind – bothering me. Why would two recent graduates consider an MBA as a ‘way out’ ? How much did they even know about what MBA is about ? After all, by the time you graduate with a bachleors degree, you hardly have any insight into real world, leave aside an MBA. Who counseled them into an MBA program ?

It didnt take long for me to figure out that no one else is to blame for this distorted notion but our society. A B.E + MBA combo is seen as the holy grail for Indian technical professionals. BE + MBA candidates are not only paid highly – they are valued highly by the society, professionally and even from the matrimonial perspective. Not to mention the extent to which the media has glamorized the MBA degree – touting the crore plus salaries and the direct placements abroad. Now that I revisit some of the conversations i’ve had with my peers, several of whom have graduated from top-tier MBA schools in India & abroad, it seems that the common motivation to do an MBA seems to be for one of the following three reasons:

1) I want to do an MBA to get a higher salary

2) I want to make a shift from technical to the business aspects of the profession

3) I’m stuck in a rut in my job and so need a change

Taking the entrepreneurial route would guarantee you points (2) and (3) above. Point (1) is something that is not guaranteed and apparently, the riskiest aspect of the proposition. So I guess the sheer uncertainty of point (1) leads people to opt for an MBA rather than taking the entrepreneurial route.

I actually find it quite ironic, because Indian B-schools are shifting into overdrive when it comes to B-plan competitions (just look at the increase in the number of b-plan competitions being held across b-school campuses) – implicitly encouraging graduates to start their own businesses and become entrepreneurs. So, its like you joined a b-school, the b-school encourages you to become an entrepreneur when you could have completely skipped b-school and gone into entrepreneurship directly.

Personally, I believe that the biggest value that an MBA provides is the access to the network of people and the alumni. The other 3 reasons listed above seem frivolous in comparison and dont seem to justify doing an MBA – I might very well be wrong, but its just me.

The reason I decided to write about this is because if entrepreneurship needs to be encouraged at the college level then we need to change their mindset that BE + MBA is not the only way to go. Entrepreneurship is a viable career option and chances are that they will learn much more being an entrepreneur than pursuing an MBA.

Ok. Time to go and talk to those family friends about their MBA plans.

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59 comments

  1. Good points.

    Also, points to the social, cultural and educational issues in society where most people are looking to make money the fastest way and not necessarily finding the thing they enjoy doing most and making money in that instead.

    • mba is not a big deal these days friends…..working hard for a degree to graduate and then doing mba…..it doesn’t ensures your job at some big place.

  2. Pranav,

    I agree the whole perception about BE+MBA being the holy grail for good salary is quite predominant in our society.

    Our whole generation is plagued with the concept of ‘better earning’ rather than ‘better living’.

    Very good write up . Keep it up.

  3. In India MBA is distorted – while in the West you need a good experience before you can be even “considered” for a good B programme, in India thousands of freshers fill into our top B schools. Freshers can bring some ideas into the classroom, but without experience they can’t contribute as well as the experienced people. Moreover until this recession a lot of companies believed in the B.Tech+MBA dudes and hired them on sky-high salaries, so people who make the choice to do an MBA can’t really be blamed.

  4. I completely support your point of view. Even I feel that such problem exists in our country. I didn’t go for MBA when I learned that I should start something on my own. I believe that experience can make a person learn things much better and faster! Moreover when we complete graduation we are not sure what profession to choose in our career. Its only the practical experience which makes us learn whether to go for an MBA or not. B-Plan competitions can help anyone (MBA or non-MBA). Even our team got recognized at various B-Plan competitions and our (good) network issue was resolved because of this. We met a mentor who got interested in the idea. I’d suggest students not to go for an MBA before deciding clearly their main goals in life!

  5. Can’t agree more, very very well written piece. I don’t think It’s just the BE+ MBA combo that is useless, Bcom/BA/BSC/(whatever) + MBA combo seems equally useless to me.

    Thanks again, I am just forwarding this to all my friends and relatives stuck with MBA mania.

  6. You have hit the nail on the head. Actually after looking around and seeing so many of your friends and batchmates pursuing MBA…peer pressure sets in at some point and even if you never wanted to do a MBA or never knew how your career will shape after an MBA, you are “pushed” towards that path.

    > 3) I’m stuck in a rut in my job and so need a change
    I have heard this a lot and this is the one on which I laugh the hardest. The reasons most people whom I talk to regarding this say that there is way too much bureaucracy around and no freedom of work. And I have my reasons that after MBA this will certainly increase.

  7. Good Insight.
    A lot of colleges these days are encouraging students to pursue entrepreneurship.
    > Entrepreneurship is a viable career option and chances are that they will learn much more being an entrepreneur than pursuing an MBA.
    Definitely bootstrapping teaches a lot to an entrepreneur. Once a bootstrapped company becomes mature, an MBA might be helpful to take it to the next level.

  8. Well i do agree with ur point dat MBA is hyped a lot. I am an engg n I am pursuing my MBA from IMI, Delhi.
    the reason why i took was all 3 aspects. I had a low salary. I worked in an IT firm for 2 yrs n now the job seem too be too boring, and finance was something which facinated me , but was still greek to me.
    I had an expectation dat ill become a champ in finance once i have done my MBA.
    I am currently in my 2nd yr doing majors in finance. Rite now my whole perception about MBA has changed.
    It is quite diff dan engg. It does not makes u the master of dat subject. It dosent even gets close to mastery in any field. Wen u r an engg in some field, by end of 4 yrs you absolutely know everything .Dats not da case in mba.
    It just gives u a taste of real world without gettin your fingers burnt. It gives you a range of knowledge but only on a superficial level.Its upto u , ur self motivation to go deeper on your own, if you wish.
    SEcond thing which MBA does is to groom you overall, in terms of ur personality, ur way of thinking , ur apporch to a problem.This is the biggest takeaway from a good MBA course.
    Rest is just secondary.

    Btw in recent times there are sooo many MBA colleges crooped up in india dat u need to be beware about the fake ones.

    • @Ashish — Well I had to stop reading your post past the first few lines! Learn to write in English the way it is meant to be written, without the use of slangs and by using correct spellings. What makes you think an MBA will take you any further in your career if you cannot articulate your thoughts maturely by constructing readable sentences? I’m an Indian living in the US, but I see too many people like you from India who have never been outside the country think that writing “dat” for “that”, and “u” for “you” is something every one in west does. NO! Unless you’re a 15 year old teenager no one writes like that here! So before you have big aspirations about completing that MBA and thinking that you’ll be managing a bunch of people, learn to write correctly!

      • totally agree with you.The way a person writes speaks loads about his/her personality.We Indians think that to write and speak in slang is the “American” way, but little do we know that Americans only when writing do not write in slang language.So called advancement in India is all trash.And also i agree with the fact that Indian B-schools have a misguided approach taking in freshers each year rather than experienced candidates.Getting to know how business is done real time is a different experience .US Schools have a minimum range of 4-5 years when accepting a candidate.Our policy is still 40 years old and shows in the way business is done in India.

  9. Very good discussion going on here. I appreciate the points brought up here. Infact about point 1) , I would say stands true in some cases if one is pursuing MBA from US. There are scores of MBA grads who completed their MBA this year but haven’t got a job yet. The earning was stopped for 2 years and huge loan was taken to pay the tuition fee and living cost. Now pressure is mounting on them to pay that amount.

    Sometimes I wonder, people are ready to stop their earning an d pay 100k+ USD for two years but apprehensive to take entrepreneurial path. I am sure a lot can be achieved with this much money in 2 years.

    • Hey Anshul,
      thanks for bringing up this point. I was thinking the same for students of ISB who haven’t got a job (they didn’t have good placement season this year) yet but have spent 20 lacs for 1.5 year course. They could have very well utilized this amount for starting something on own. They think of risks, but now with this kind of situation where jobs are difficult to find entrepreneurship could have been the best option!

  10. looks like i struck a chord here !!

  11. Good article. Just wanted to add one more point that is a possible explanation for the MBA dream in India. A large number of companies in India are looking out for MBAs for any management position worth the name. For instance, in a recent recruitment campaign from a public sector company – BSNL – for their Management Trainee Programme it was mandatory for applicants to hold an MBA degree. I think this was due to two reasons – a) cutting down on the number of applicants b) companies have little faith in Indian higher education system and Business Schools in India do add value to many graduates who are otherwise very unprepared for real jobs. Come to think of it, a large number of Indian graduates have seldom written a project proposal during college, hardly any project report, very few (if any) presentations and little teamwork or collaborative projects. These are essential skills but there is inadequate guidance on these fronts in our undergraduate courses. MBA forces many to learn all these basic things. And companies like this.
    These things are part of regular undergraduate curriculum in many good overseas universities. But in India, very few undergraduate courses emphasise these basic skills leaving MBA education to fill a glaring gap. And companies too recognise this. So it’s a demand from companies issue as well.

  12. Couldn’t agree more…
    I am not sure about the real value that an MBA degree adds, but I am pretty sure about one thing- If you’ve got it, then you’ll do it…with or without an MBA!

  13. Why Indian do MBA ?
    The risk taking capacity is very low.
    Not enough ideas (we do lack creativity)
    Easy path to make money and get married to a nice girl

  14. I agree completely with you. I’m a BE-MBA myself, and while pursuing my MBA, I was actually annoyed to find so many of them who had joined simply because of the higher pay..

    Damn learning the business, it was money alone that mattered..

    • although MBA degree is recognised well in the organised sectors in INDIA, only the fittest with good outlook in future management goal likely to survive in timely situation – experience with intelligence is the need of this time

  15. Oh my god :) I just love this article. Life is for better living and not for better earning. People go behind money and end up doing things they dont like and get stuck with the pressure of family dependants and not able to switch professions. So whatever it is, just go in search of what you like in the initial stages of life rather than struggling in later part of life :) :) :)

  16. and No many is considered ROI on MBA in term cost, effec/time.

    my MBA blues..
    http://iamyuva.wordpress.com/2004/12/11/mbas-or-not/

    • sorry for post half(chewed) reply.. I was saying:

      Not many seems to be consider ROI on MBA in terms of cost/effort/time. with 100+k$ & couple of yrs of work life spent it would take min. of 5yr to breakeven that investment.

      I didnt do my MBA(yet). I hope do it for the same reason mentioned by the author (network/alumni). I posted my MBA blues couple of years ago.
      http://iamyuva.wordpress.com/2004/12/11/mbas-or-not/

  17. You are missing a point when you say this:

    “I actually find it quite ironic, because Indian B-schools are shifting into overdrive when it comes to B-plan competitions (just look at the increase in the number of b-plan competitions being held across b-school campuses) – implicitly encouraging graduates to start their own businesses and become entrepreneurs. So, its like you joined a b-school, the b-school encourages you to become an entrepreneur when you could have completely skipped b-school and gone into entrepreneurship directly.”

    You are assuming that all that a business school does is to encourage entrepreneurship. Mind it you just don’t need a brilliant idea to become an entrepreneur but you also need specific business skills to become one. That where MBA degree should help you get an overall business skill development in a short period. Just imagine a hardcore techy deciding to open an IT Services firm just because he thinks he can code well…..

    I think doing an MBA is required to accelerate your learnings on business side. Whether you decide to apply what you learn by working for someone else or use it to start your own venture is a different matter.

  18. Actually indians are obsessed with any degree be it MBA or Mtech.. They spend 10 lahks to get job of not more than 20 k per month. Illogical decision.

  19. its damn money and nothing else!

  20. I just wrote a similar post myself. Quite agree with what you have to say.

  21. I totally agree..that may be because i am not a MBA. but did manage cross over from techi to banker (business operations) to consulting.

    OK. having side that will you hire me…without ‘qualifications’!?? probably that why people want to do.because it will get your CV shortlisted.

  22. We personally feel that the value of MBA is highly compromised. With the mushrooming of all small MBA institutes who even do not have any experienced faculty it do not have any weight anymore in resume. Still if you are doing it from top 20 institutes it does give you an edge but not otherwise.

    This is even reflected in salary scales which you can find in market. People dream that by doing MBA even from small institute will fetch them 6lac plus salary but in reality they will end up in sales job with start-up of 5K+ per month salary.

  23. B. E + MBA is done not for entrepreneur spirit but because of high salary factor. I bet 99% of B. Tech graduates dont know anything about their field. They just have to complete there course cramming anything which comes in their way and no regard to the practical education. The same goes for MBA, people do MBA because their neighbour have done so and getting a good salary package.

  24. I think this trend of acquiring so called degrees has cropped up from the fact that our Indian education system is more job oriented rather than knowledge, skills oriented… How many of us were told back in our school days that we should pursue what we are interested in and build on to our natural skills… ?? So getting into MBA or engineering for that matter is probably a part of the bigger issue of misunderstanding the whole concept of education for a means to making money… !

  25. I think an MBA is not the end of an education. Its just the beginning of a thought-process. A better pay package is not an end. Its just the result of achieving an end-result. I think the MBA degree helps you understand business better.
    It develops a thought-process wherein you will see a change in the way you approach businesses and problems than you did when just as a Graduate. I think that is what helps you solve these problems much better, saving loads of money for your organization which is precisely why, companies are ready to compensate an MBA with fat pay packets…

  26. Hmm go for ‘Better Living’ than ‘Better Earning’ hmmmm… hw do you think that der can be Better Living without Better Earning…Can a hardcore software programmer fit into a role of getting business for a company without any knowledge of Business or d other way rnd can a Business fellow sell a product without knowing the basics.. this is where B.E + MBA comes in picture, it aint useless.. u hv to agree on this.. MBA is for u2 polish ur skills..personality and approach. Mayb nt all d B-schools teach u dis..If you by our education standards den even B.E is useless.. it hardly teaches you anythin which is practically going on.. its all outdated. I think the way we look at MBA should be changed rather than thinkin if it useless or no

  27. Good Artical. It has made me think.

  28. Indians are famous about being obsessed by one profession or another. Earlier it was IAS, doctor, lawyer, engineer, currently it is MBA. Well considering the chronological events i think this MBA fascination will also fade soon.

    For me MBA is done by 2 types of people,

    A – These are the majority, who want a good life, nice salary so that they can buy a good house and afford the EMI’s, get a nice wife or husband (probably a handsome dowry in case of few), nice position in the company with subordinates and possibly getting a window office in the future.

    B – People for whom MBA schools are the place to understand actual business, learn the tricks, empower yourself in becoming the Ambani’s and TATA’s of the world.

    To talk about MBA for me personally and Type B people like me, it is the most overrated degree in the world. Not much practical knowledge imparted, just analysing past events and prodding the success and running down the failure.

    I believe much more can be learnt by someone if he or she puts in that money to start their new venture. Trust me, i have done both, so i know.

    It’s like if you want to swim, why sit by the shore for two years and then probably lose the zeal to swim.

    If you want to start your own business, start it don’t waste the money and 2 years of your life just to get a degree. Off course you will make lots of mistakes, well who hasn’t.

    And for the Type A kind, i believe one should treat it as an investment, and make a wise decision. Considering job market is getting filled with MBA, with large supply leading to drop in salaries.

    Vicky Pradhan

    Founding Member,

    bharatbuy.com

  29. I totally agree with the content and the point of view put forth in the write up. But somewhere down the line the market currrently is asking for management graduates, and hence there is a need for doing mba. To climb the ladder its has become a necessity. And ofcourse with elevation in the designation, comes higher pay packets. So what is the harm in thinking that MBA will give higher pay packets.

  30. Your thoughts totally make sense.

    I had been in this dilemma for quite a long time. I had sustained this parental and peer pressure myself and tried convicing myself and parents that doing MBA does not a prove a thing. All that matters is the passion for something, hardwork and some luck.

    And ofcourse, MBA is one of those courses which can be done at anytime in your life when you really think that expanding a perspective is going to help.

  31. Stupid blog. Misses the entire point. Indians are obsessed with the MBA degree, because the market is obsessed with the same.
    When the market decides to place a b-grade mba with 0-1 yr of work ex to boss a team of 4 IIT engineers who have toiled for 2 yrs, what do the IITians do? Crack CAT and get into an IIM.
    The point about entre. Speak to a few VCs. Pose as an mba, show them the plan. Do the same without saying that you have an mba. Find out for yourselves how easy it is to get funding once you have that degree with you.

  32. I have a genuine question.

    Why do students in India do their BE or B.tech. in the first place when they know they’re not going to work in that area? And why don’t they directly go for an undergraduate course in “Business Administration”? Why BE and *then* a MBA? They aren’t even compatible together!

    Someone please enlighten me!

    • if not too late here are my comments for Ragav. Following are my views.

      when you manage you manage some thing. if you understand the buissiness and the technology it is connected with it may be far more easier to manage efficiently. In the current world you will need to know how the tech works if not create it yourself. if you do not have BE/Btech you will need some thing similar outside of acadamic degree probably going through training etc. While an MDA does introduce introduce you to some tools that you will need to aquire through reading books going through personal/paid training etc. In all cases education is education that exposes you to available knowledge. It is upto you how much you understand and apply in real world PROBLEM SOLVING to improve others lives and in the process improve your own.

      even if you are an investor/banker, its easier to invest in what you understand than you do not. Think more based on your own experiences probably childhood/college/etc

  33. Nice article and insightful comments .So basically ->If not MBA then the entrepreneurial route , if not the entrepreneurial route then some “jugaad” ,if not jugaad then back to a coding job ?

    I have a pretty decent resume showing my business ,sales and marketing acumen for a software company.

    I’m 22 and no opportunity to get a marketing job .

    I guess I’l have to get myself an MBA degree , certifying that I have the business acumen , certifying that I can communicate well , certifying that I can manage well , certifying that I can solve any situation , Giving the market the confidence that “HE” is the right candidate !!!

  34. Great one. Might get in touch with you for re-publish rights or for quoting you :)

  35. Very interesting article and comments on this page!
    I stumbled over this article when googling “Why do all indians have MBAs?”. Yes, i am not Indian but German and i have been working for 6 years now. It always struck me as odd that so many Indians seem to have MBAs or pursue one sooner or later (rather sooner).
    The weirdest encounter i had was a 20-year old with a MBA (?!)
    Well, now i understand a little more about why this is so en vogue in India…
    Thanks for the insight.

  36. really good but more work required

  37. Totally agree with you. This is the thing ate my head for some long time, finally also sound who’s the culprit here.

  38. Today is not the time to run for degree because there is no assurance for the highest salary. Sometimes, after spending lot’s of money on course we could not get that much money back which we spend on it. I think that the most important thing is your experience because experience gives practical knowledge which works and help you on your work place.

  39. can anyone enlighten me about the placement scams in B schools of india…can anyone???

  40. Indian’s are fooled by someone easily.
    they dont know, professional courses like BE/B.Tech/MBA are only waste of money and life.

  41. if after doing MBA i cannot start my own business then why should i do it in first place. If i have an ability and idea to open my own firm or company then why should i was time working under some one else whose exprience is not even worth for me as i have some thing else in my mind pls tell me how to start my own firm

  42. Dude I don’t know you but I’ve got to say that you are absolutely right! The whole perception of getting an MBA has been broken DOWN from your “passion for business” to a lot of other lame reasons like “getting a high paying job”, “using it as a leverage for marriage”, “showing off in front of relatives, and maybe friends” etc.

    The whole point of MBA is actually to understand how a business works (which for the most part is now available for free on the net), and the point you’ve mentioned – TO GROW YOUR NETWORK. These days, an MBA degree will mostly help you grow your network with people (which is kind of really important though) but probably a real-time startup would actually help you more and provide you with better real-life lessons. You can find a lot of good books these days about how to be prepared before a startup..Maybe, in my opinion, these are good enough for you to get out in the real world.

    I liked reading your article man..It’s truly honest and truthful opinion..

  43. hey there and thanks for your information ? I’ve certainly picked up anything new from right here. I did on the other hand experience some technical issues the use of this site, as I experienced to reload the site lots of instances previous to I may get it to load properly. I had been wondering if your hosting is OK? Now not that I am complaining, but slow loading instances occasions will sometimes affect your placement in google and can damage your high-quality score if ads and marketing with Adwords. Anyway I am including this RSS to my email and can look out for a lot extra of your respective intriguing content. Ensure that you update this once more soon..

  44. MBA and Engineering has become a buzzword in the first decade of the 21st century. Every college and university has started BBA and MBA courses. The gullible students, who are not much aware of the ground realities, have taken these courses with much enthusiasm and hope of getting good job opportunities after completing their courses. The Indian Education System has a legacy where it was difficult to get admission in an engineering, medical or management course. More than half of the battle was won if the student gets admitted to an engineering, medical or management institute.

  45. yes i agree ,but MBA is a very good post graduate course it is useful to every student MBA is actually to understand how a business works

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