‘The MBA-Craze Has Faded’ – 2IIM
Fewer people seem to be taking the CAT each subsequent year, and, as this article points out the reasons for this seem sound enough.
So, is an MBA not worth it?
An MBA from a good college definitely has its merits. When the price was lower, no one had to do a cost-benefit analysis. For instance, I finished my MBA in 2003. Back then, most of us joining college were freshers, and on average it would take about a year to pay off the loan you took to complete the MBA. So, by 23 you were an MBA, and by 24 you were debt-free. These days, one joins an MBA at 24-25, completes by 26-27, and it takes 3 years to pay off your education loan. And this is if you graduate from a good college and get a good job. If the MBA plants you on a higher career trajectory and places you on interesting roles, the payoff over a long career may be still worth it – financially and otherwise. But the decision is no longer a no-brainer. It very much depends on which college you join. One needs to do decent research and get into a good college. And very often have the courage to say, “No thanks, this school is not worth it.”
So, what next for India’s B-schools?
Quite simple really, MBA courses have to become less expensive. There is no perceptible “brand” value for the B-schools ranked beyond 15. They do not teach anything particularly profound. They are not able to provide the platform for a big uptick in salary. If the salary is not high enough, the cost should be low enough.
This concern regarding cost of doing MBA is not unique to India. This has been a key focus area across the globe. This is why a great many colleges are going online aggressively. A well structured online course is often far more useful than a classroom course and is definitely much cheaper to deliver. The learning outcomes are far better online and are only likely to get better as both technology and tech comfort level of the target audience keep improving.
Indian B-schools will also have to do this. It is clear that the cost of doing an MBA cannot continue to be in the 15-16 lakh range, especially for some of the middling schools. It cannot cost the same amount to do an MBA from a college ranked 34 as from IIM A,B or C. These schools will have to use the tools that a lot of B-schools worldwide are using to lower their costs. They have to use the online learning option more aggressively.
How is CAT preparation going to change?
Everything we have discussed for the B-schools is automatically applicable for the CAT preparation industry as well. This industry has probably seen a sharper fall in numbers, and faces similar questions over value-proposition. The MBA-craze has faded and so coaching institutions are no longer seen as the dream-ticket to a great career. Truth be told, the teaching quality has fallen sharply and most of the coaching classes are run more like marketing companies than like academic institutions. For the past few years, the industry has been getting away with mediocre teachers teaching giant classrooms. Barring a handful of centers across the Country, the value offered by classroom coaching has been minimal.
Online is no longer the future, it is the present
Thankfully, all this has happened when technology has improved leaps and bounds. What we have lost in terms of quality classroom input has probably been compensated by excellent content available online. The two primary concerns of CAT Coaching are – 1) Teacher Quality and 2) Cost of delivery. The online model automatically plugs both of these. With 4G and widespread Fibrenet now just around the corner, internet speed should not be a concern anymore.
In fact, I would go to the extent of saying that anyone preparing for CAT should definitely try out online options before evaluating classroom programs. The gulf in quality between the best online offerings and classroom coaching is already substantial. The learning outcomes in online learning are far superior to the ones seen in classroom course. Because we are in the nascent stages of online coaching, there are a lot of players and so the search cost of finding the right provider is high. But if you spend the time evaluating the products available, odds are you will be pleasantly surprised by what is available online.
About the Author:
Rajesh Balasubramanian runs 2IIM’s CAT program and handles more than half the classes for CAT preparation. He completed his Electrical engineering from IIT Madras in 2001 and PGDM from IIM Bangalore in 2003. He worked as an equity Research Analyst at Credit Suisse, London. This was an enriching experience, in a literal sense; and a soul-sapping experience otherwise. He finally quit his job in 2009 and joined 2IIM as director in 2010.