Is It Worth Signing Up For An MBA?
The past 20 years have seen dramatic marketplace transformations, in India and elsewhere. Think about transformations of the economy; India and many other emerging markets have witnessed hyper-growth while the established markets in the US and Europe have been hit by recession after recession. Technology has introduced disruptive change to the workplace; the way we communicate and collaborate, share information, learn and refresh our knowledge and skills has changed forever. Along with these macro-level transformations, each one of us has also changed, as a consumer and as an employee. We expect 24×7 access to everything, want courteous and knowledgeable service and thanks to increased transparency are only willing to pay a fair price. In this rapidly and continuously transforming environment, job descriptions and careers have gone through transformation over the past 20 years, and will continue to do so. Change will be the new normal for everyone planning a career today. We will need to prepare ourselves for hitherto unknown challenges, job profiles, and careers.
Are business schools responding to these challenges and is the MBA education offered by them still relevant in this changing professional environment? In other words, is it worth signing up for an MBA?
Competencies managers and leaders need
Unlike all the jobs in engineering, medicine, and jurisprudence, there is probably not a single role in today’s business which cannot be done without having gone to business school. Managerial capabilities are typically being acquired through informal work experiences. But because learning by trial-and-error is rather inefficient, big Indian and foreign multinational firms have often made an MBA from a reputed institute a mandatory recruitment requirement for certain functions and roles. But isn’t this more of a filter to fast-track the selection process of candidates? What competencies do businesses really look into? According to a 2009 study by Rubin and Dierdorff published in the Academy of Management & Learning, it is the management of six areas: of the decision-making process (getting the information, judging the qualities of things, services, and people), human capital (coaching and developing others; resolving conflicts and negotiating; developing and building teams), strategy and innovation (thinking creatively; developing objectives and strategies; providing consultation and advice), task environment (communicating with persons outside the own organizational unit; establishing and maintaining interpersonal relationships; selling or influencing), administration and control (evaluating information to determine compliance with standards; documenting or recording information; performing administration activities), and logistics and technology (inspecting equipment, structures, or material; controlling machines or processes; interacting with computers).Very obviously, it is not the strategizing that goes hand in hand with painting of endless slide decks, but it is, as Rumelt puts it in his 2011 book Good Strategy/Bad Strategy, the driving through of strategy from the diagnosis of the situation via the guiding policy of what needs to be done all the way through its coherent execution. Indeed, execution is the most important part of strategy. Strategy without focused execution is pointless, a waste of time and corporate resources. But when we ask our fresh MBA students during the week of welcome for their career aspirations, execution is very low on their agenda, that is, if they consider it as a career option at all. Haven’t they done exactly this before joining business school? Isn’t this the area they want to leave to others? MBA students typically want to pursue their career in strategy – but corporates need the graduates to be in execution. Plain and simple.How do we close this gap? Are our MBA programs impervious to the industry’s requirements, are they wholly out of touch with the real world, are we making our students believe they will be placed into a CXO role? Or are we preparing them for corporate reality?
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Dawn, rise, and criticism of MBA programs
Arguably, the MBA program was the most eminent educational innovation of our time. But contrary to common belief, business schools did not invent the case method; instead, they adapted it from law schools and used it to break down corporate strategy and decision making into a dynamic real-life experience in the classroom. The prevailing logic is that formal training is more efficient and effective than gaining required competencies through informal experiences on the job. Today and as per the last count of GMAC, there are 15,673 institutions worldwide offering business degrees out of which 3,902 are located in India and 1,082 in China. In India, criticism of business schools regarding the competencies they try to impart comes and goes in waves; each wave sparks considerable attention in the press. And yet, the number of aspiring Indian students taking the GMAT test is going up by 13 per cent every year. In America, such criticism goes as far back as to the dawning of the first business schools, undergraduate schools of commerce (such as the University of Pennsylvania’s Wharton School in 1881) and graduate schools (Dartmouth College’s Amos Tuck School of Administration and Finance in 1900 and Harvard Business School in 1908). More than a hundred years later, how well do business schools meet the core requirements of the industry? And what can we do in an emerging market like India?
Functional, quantitative, and analytical core courses
Functional, quantitative, and analytical courses dominate most management programs. Courses such as managerial accounting, financial analysis, corporate finance, business law, macroeconomic policy, international economics, and marketing are a specialized training ground for specific business functions. But many argue that this is not true professional management education, which should instead focus on skills, values, and ethical behavior. Notwithstanding such criticism, most MBA students find their first jobs in functional areas, rather than in leadership positions. They will be primarily selected and placed based on their tangible knowledge and skills. The best-paying jobs are often to be found in finance – even after the financial crash of 2008. Management consulting is another discipline and well-sought profession for MBA graduates which requires breadth and depth of functional knowledge.
People management and interpersonal skills
And so there is a widespread call to add other courses with different type of coursework to the MBA curriculum to balance and counterweigh the functional education. People management, interpersonal competencies spanning the corporate hierarchy and national cultures, and skills of managing self are invaluable in a transformational environment. Leadership skills are frequently sought by recruiting companies and according to a 2009 GMAC survey, managers perceive interpersonal skills considerably more important than behavioral knowledge. And yet, most programs underemphasize the honing of these skills. Innovative business schools develop their curriculum towards leadership and include team-based experiential and research-based learning activities into their teaching, evaluation,and grading. Such activities are about building skills through doing and enabling personal growth through self-discovery and reflection. And while this process may be kick-started with a psychometric assessment, it goes far beyond questionnaires and evaluations.
Decision-making and problem-solving capabilities
An often voiced concern in the industry is that MBA graduates are neither creative and innovative, nor structured and disciplined in their decision-making and problem-solving process. The standard business school case studies may be twenty pages long and full of data, but yet they contain little ambiguity and uncertainty which is typically found in the world outside of the classroom. Most real-life business problems are not highly structured, but loaded with uncertainty and risk. The necessary structuring has already taken place in the write-up of business school case studies, but regrettably not in the situations encountered in the business world. The previously mentioned study by Rubin and Dierdorff showed the largest discrepancy in business school courses covering the management of the decision-making process and the importance as evaluated by industry managers. Financial models and net present value calculations are not sufficient to equip students with decision-making capabilities for complex problems. As the author outlines in his 2013 book on Making the Compelling Business Case, decision making is just as much a process of retrieving reliable information from stakeholders, aligning the needs and wants of the various stakeholder segments, and presenting the resulting recommendation in an easy-to-understand way to senior management. From a pedagogic point of view, business school courses need to focus on multifunctional and multicultural teams, rapid prototyping, and empirical validation by trying out many things on a small-scale and killing early in case of failure. We call this approach to learning design thinking rather than abstract thinking, acknowledging very much that the origins of design thinking are to be found in engineering rather than in the management discipline.
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Giving voices to ethical values in management education will contribute to help avoid egregious legal and ethical breaches, corporate scandals and ultimately the collapse of corporates as we have not long ago witnessed with Satyam Computers in India and Enron in the United States. Ideally, ethics should be taught in a stand-alone course and in parallel integrated into existing core and elective functional courses. Why not have a session on ethical issues in core marketing, supply chain management, or taxation?Ethics seems to be particularly relevant in a country like India where luxury villas and gold purchases aren’t rare, but where only a meagre 42,800 individuals have admitted to having a taxable income exceeding Rs 1 crore in the financial year 2012/13, that is slightly more than 0.1 per cent of all tax payers. But can one actually teach ethics? Ethics is not a body of knowledge, which can be captured in a case study and accompanying lecture notes. Ethics as we understand it today is more a set of reasoning skills and part of a Western moral philosophy dating back to the ancient Greeks; it most certainly requires faculty to establish a trusted and safe classroom atmosphere, where deeply felt differences can be expressed freely. And attempts of teaching ethics can be botched up pretty easily by faculty not confident in this area. Notwithstanding these challenges, there is one goal that can be achieved even with the help of case study teaching: making students aware when they are about to face an ethical dilemma which cannot be resolved by following standardized, rationalized, and institutionalized processes. Finally, corporate social responsibility can also be addressed via co-curricular activities such as community service; India offers plenty and more opportunities for mentoring underserved communities.
Preparing for globalization
Unlike their counterparts from the United States and Europe, many Indian MBA students have not really had international exposure before joining business school; given an often to be found middle class background, they are also unlikely to have travelled internationally. And yet, looking at the continuing growth of India’s export-oriented industries like IT and BPO, many of them will be likely to jump into international roles after their graduation. Business schools have an obligation to prepare them for a global world, which is – following the notion of Friedman’s 2005 bestselling book – often dreamt to be flat. In reality, international business isn’t anything close to flat, rather it is full of barriers, more aptly described by Ghemawat in his 2007 book Redefining Global Strategy as the CAGE framework of cultural, administrational, geographical, and economical distances. While cross-national alliances between Indian and foreign business schools open up exchange possibilities for a small number of elite students, the exchange of faculty can help to prepare students both in India and abroad for global collaboration in a more cost-effective manner. The Indian School of Business in Hyderabad and the MYRA School of Business in Mysore and are two quite different Indian business schools, established and emerging, located in a tier-I and in a tier-II city, but they both recruit a good proportion of their faculty from leading institutions around the world. When interacting with students, it is interesting to see how different styles of teaching, evaluation, and faculty-student interaction open eyes for intercultural differences – a realization of culturally driven behavior which can later be most valuable at the workplace.
So, what should aspiring MBA students do?
Given employers’ growing expectations of MBA graduates, aspiring MBA students should carefully look at the business schools on the Indian market and go beyond the various ratings published in magazines which more often than not still rely on criteria like acres of land and number of books in the library. There is pretty clear evidence, that the right business school activities add important factors to students’ employability after graduation and ultimately to their success as leaders in a rapidly and constantly transforming business environment. And as management guru Peter Drucker once remarked, the question should be focused “on the extent to which we enable students to get going,” MBA programs which give students a well-blended mix of functional and analytical knowledge, leadership skills, decision making capabilities, ethical awareness, and confidence in a global environment, will help to establish fresh graduates in the corporate world very quickly and ultimately help them achieve a good return on their monetary and time investment into their MBA education.
(To know more about MYRA and its programmes, click here)
Dr. Wolfgang Messner is Associate Professor of International Management at MYRA School of Business and Director of GloBus Research in Mysore/India. Email: firstname.lastname@example.org or email@example.com
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