The Future of the CAT (Common Admission Test)

The waning interest in CAT among MBA aspirants continued as this year saw around 1.85Lstudents appearing for CAT 2011, no significant change (Ref. graph) from CAT 2010. Put this in perspective, that the number also includes the JMET applicants who would have applied for the IIT-SOMs and doesn’t take much to figure out that all is not well with the CAT. Looking at this trend I can’t help but think about the future of CAT.

CAT has lost its claws – Like it or not! With the new format and the blunders of CAT 2009, all has been ensured that CAT loses its edginess and is no longer one of the most ‘feared’ examinations around. The hype did contribute to no. of applications. But the age of hype is over. Vendors have messed up and been shuffled around. The online CAT is still evolving and nowhere close to the GMAT pattern that it so miserably tries to emulate. It is no longer a pencil-paper test and draws only crowds from metros (close to 70%) with reports suggesting that an online CAT repels students from smaller towns and villages. Adding to the misery is the fact that acing the CAT doesn’t guarantee you squat. You could make headlines for being a 100 percentile-guy, but pray to God that you don’t make another headline that says, “Now, IIMs don’t even want their100-percentile guys”. Students will slowly understand this complication and steer away from CAT if such a trend continues. In such an event, I won’t be surprised when there comes a day when there aren’t even 1 lakh students to write the CAT. Outcome – CAT fever eradicated from India after polio & small-pox! Recessionary Times – There were opinions that doing an MBA would be a smart idea in the time of recession (principle of structural unemployment) especially because of the high returns that MBA was traditionally known for. However, students have realized over the past few years that MBA doesn’t guarantee a fat pay check. On the other hand the recession has shown no remorse. Industry sentiments don’t take a lot of time to percolate into the psyche of students. They feel that leaving their current job for an MBA is going to be less rewarding and more perilous than thought initially. I opine that this dip is going to continue till it reaches a no. of 1 to 1.25L mark with thrice the number of seats. Outcome – Placement committees introducing a statistic used by foreign B-schools, ‘% of students placed after 6 months of program completion’ in placement reports. To strengthen the argument above you may want to read this article by another author on this website : Final Placements – Class of 2012 : The big test for the IIMs Brand Dilution – If Harvard Business School were to write a case on Brand Dilution, they should probably pick up the IIM expansion as an example. IIMs are springing up like private colleges all across the country. The brand dilution has come to a point where alums are forced to swallow the harsh-reality that IIMs don’t generate those awes that we were so familiar with. The ratio of an applicant to student was 150:1 which has gone down to approx. 57:1 with 13 IIMs in operation. Hence, it has to be seen where brand-IIM goes from here on. Outcome –CAT-failing whiners snorting at sheepish IIM alums and asking, “Oh, you must be from IIM-Q!”)

Statistics on the CAT conversion ratio (Source: Internet/News Media)

* – when the OBC quota implementation was done

(InsideIIM Editor view : While it is a very useful statistic, readers must note that the conversion ratio for General category candidates has not changed too much)

Tuition Fees – Tuition fee hikes have become a norm among B-schools to such an extent that when IIM Kozhikode introduced a marginal fee-cut (for which the institute did take quite a hit on revenues) they became hot news. While you cannot blame business schools, for charging a fortune to maintain quality of infrastructure and the faculty, this entails that the famed ROI of IIMs has gone for a toss with diminished pay-packages compared to pre-2009 times. Paying interest-rates of 11+ % on loans in excess of 10 L is no joke and ROI seekers will no longer find sense in doing an MBA over a short-term. The gains are only going to be in medium and long-term especially those who have pre-MBA work-experience. Outcome – IIM Grads with a standard of living (sharing an apartment with 5 other guys) that is just the same when they earned one-fourth of their current salary.   Transparency in Reporting – As an ex-Media cell member I see a stark difference in the kind of reporting done for B-schools now. A few years back you could hear the phrase ‘1-crore package’ used way too frequently with IIMs. However more transparency shown by all IIMs has ensured that institutes are no longer fighting to be the first to print a bunch of framed half-truths in leading dailies. Institutes such as IIMA have taken an extra step to audit their reports externally to ensure transparency in front of all their stakeholders. This gives a truer picture to students aspiring to earn big bucks post their MBA. Right set of expectations only gets the right students into these institutes. Outcome – An article on how Gandhian principles are being followed in various walks of life in B-schools to be released soon by an IIM near you! Work-ex Woes – Work-experience - considered a boon for folks entering a B-school turns more of a bane. Ironically it is this ‘veteran’ segment of the CAT-takers which gives its heart and soul into clearing the CAT.  Most of the marketing giants and conglomerates have instituted leadership programs for which they prefer with people with lesser work-experience with freshers being hired in a majority.  However, changing careers never really works out for a majority of experienced folks as they are not open to taking a pay-cut Outcome – All the veterans CAT takers taking ‘VRS’ from their weekend-job of taking up mock-CAT Diversity Doldrums – It is sad that our imagination of classroom diversity is limited to ‘gender-diversity’.  While it was initially thought of as an experiment that IIMs conduct every year, I think the trend to have 30% females is being seriously mulled by so many IIMs and implemented by quite a few. And with no. of people with work-experience set to reduce in the current environment, IIMs could very well be an extended under-grad stint for most folks. Outcome – Marginal benefit of having females on Campus tending to zero Final Word: The lion just becomes a puss… CAT will never be the same again! With all the reasons discussed about, following are the implications that I foresee:

• A group of serious, MBA-focused but inexperienced graduates taking CAT. While this doesn’t fit the typical international applicant, but then it happens only in India right?
• People with more experience will find sense in doing an MBA from institutes such as ISB and other foreign universities that accept GMAT. But there a separate set of challenges that GMAT candidates face (not in our scope)
• Applications for full-time higher management studies may see a drop and executive programs, part-time MBAs/specialized MBA programs in financial engineering, accounting, enterprise software management will see a rise going forward

While this may be the demise of the legendary CAT, it could be good in the larger interest of the existing management talent pool. At the end of the day, what an MBA does post B-school isn’t rocket-science but he is paid more for his ability to successfully shoulder more responsibilities and take the stick for it. Therefore, the more isn’t really merrier! - Charan Iyengar

Sources:

• http://www.sify.com/news/more-engineers-more-women-fewer-freshers-to-appear-for-cat-2011-news-education-lkujISeghfe.html (CAT 2010 and CAT 2011 applicant figures) http://www.pagalguy.com/2009/10/the-numbers-involved-with-cat-2009/ (CAT 2009 applicants)

• http://inhome.rediff.com/money/2008/aug/07iim.htm (CAT 2007 and CAT 2008 applicants & seats)

• http://www.hindu.com/2009/10/13/stories/2009101358020200.htm (CAT 2006,CAT 2005 test-takers)

• http://www.business-standard.com/india/news/cat-applicants26-this-year/335928/ (CAT 2006, 2007 2008 applicants)

• http://www.business-standard.com/india/news/cat-applicants26-this-year/335928/ (CAT 2005 test-takers)

(The author is an alumnus of IIM Kozhikode – Class of 2011 and has worked as a Technology analyst at HSBC and JPMorgan in the past. He is a Senior Consultant with Wipro Consulting Services) If you do have a call, allow us to help you ! You must read and the fill the form : The Final Frontier with Deepali Naair – High Quality interview preparation! Also Read : 10 Worst Career Goals Essays when applying to a business school in India Deepali Naair’s Profile Over 90% of Deepali’s students have made it to one of their top 3 dream schools in India and the World! You may want to read other articles by this author - Summers Prep -Will the real Consultant please stand up? Summer Placements at Business Schools in India – Time for a Rethink? Libraries at IIMs Also Read : CAT 2011 – Didn’t Make it?   Our facebook page : InsideIIM Follow us on twitter here : @InsideIIM