(Illustration: Saurabh Singh)
IT IS NOT JUST THE PRIVATE SECTOR IN THE COUNTRY THAT is interested in them. The government of India has made it amply clear on many occasions that it expects more from its B-School graduates. Which means there are endless opportunities lying in wait. Again, there are challenges that originate from how capable our management students who pass out of B-Schools are to meet these great expectations, and in coping with governmental efforts and culture.
The bigger question is: How can we groom grads who can work with ease in both corporations as well as in government, where the work culture is different?
India’s G20 Sherpa and former NITI Aayog Chief Executive Officer Amitabh Kant, a seasoned former bureaucrat, wants business schools to churn out grads who can handle sunrise sectors and those that generate rapid growth for the country. He however regrets that, so far, most B-Schools in the country have not reoriented their ways to groom managers for segments such as semiconductors, green energy, renewables, electric mobility, and so on. “Management at cutting-edge technology levels is missing because most B-Schools are yet to focus extensively on areas that help accelerate India’s growth. They must equip students so that they are job-ready for new opportunities,” he avers, emphasising that most grads end up learning things anew only once they are at work.
TRUE, OPPORTUNITIES FOR management students are huge, and so are emerging challenges that continue to mount along with the triumphant march of technology. Perfunctory inclusions of certain subjects in the curriculum aren’t enough. More needs to be done to build a bridge with the private sector and governments to offer best talent suited to achieving the country’s growth targets.
Vivek Wadhwa, a US-based entrepreneur-turned-academic and author, who is also a tireless public speaker, has long been critical of IIMs as well as other business schools around the world. His argument is that they are completely out of touch with the new rules of management, or stuck in the past, teaching old management methods which were developed for factory workers—not knowledge workers. He wrote in his famous essay for MarketWatch, “When I completed my MBA from New York University’s Stern School of Business in the 1980s, I considered it to be the best investment I had ever made. It helped me climb the corporate ladder and become an entrepreneur. The world has surely changed since then, but business-school curricula have largely stayed the same. As they say, academia moves at the speed of molasses.” Incidentally, MBAs have over time come under criticism for destroying capitalism. The argument against them is that MBAs are less loyal to Main Street (businesses) and more loyal to Wall Street (markets and financial giants). MBAs worldwide earned wrath over formula-oriented and straitjacketed approaches to problems, meaning their tactics invariably failed at troubleshooting.
Once again, all these warnings have nothing to do with the lack of opportunities for management grads, which are, in fact, too many, only of course if they have the required skills. Therefore, translating opportunities into jobs for fresh grads is the biggest challenge for B-Schools—and how successfully they do it will ensure their continued relevance.
For his part, noted columnist Dhiraj Nayyar, who is also director, economics & policy, Vedanta Ltd, and former head, economics, finance & commerce at NITI Aayog, says that B-Schools can introduce courses in policy to familiarise students with the economic history of the country. What is imperative, he says,
is to help them acquire life skills along with bookish skills that will help managers who prefer to join the government to handle transition in state deparments more efficiently. “Managing implementation of a scheme in the government and the private sector is vastly different and most grads are familiar with the latter, not with the former,” notes Nayyar. At a time when the government relies on lateral entrants in key positions, learning the ways of the government—how to take and execute decisions—as opposed to the private sector, will only enhance the fresh grads’ employability credentials.
When it comes to the private sector, the challenges are well-known, and as you will read on the following pages—which carry columns by top names in business education—efforts are already afoot to align business education with the demands of Industry 4.0 (the first industrial age was triggered by the steam engine, the second by the assembly line, the third by the computer and the fourth by the internet of things and other smart digital technologies). According to the UN Conference on Trade and Development (UNCTAD), Industry 4.0 refers to the “smart” and connected production systems that are designed to sense, predict, and interact with the physical world, so as to make decisions that support production in real-time. Meanwhile, one instance of innovation, often cited by experts in the field of business education in India is an analytics-focused PGDBA programme done in collaboration with IIM Calcutta and IIT and the Indian Statistical Institute (ISI).
As a publication, Open has often emphasised the need for rethinking MBAs to suit the new job scenario. According to Vijay Govindarajan, Coxe Distinguished Professor, Tuck School of Business at Dartmouth, and best-selling author of several books, the top five challenges that B-Schools will have to confront include “digital transformation, diversity and inclusion, future of work, stakeholder capitalism and reimagining of global supply chains”.
Celebrity entrepreneur Elon Musk had once caustically remarked, “I hire people in spite of an MBA, not because of one.” He had also said that an MBA programme “teaches people all sorts of wrong things … they don’t teach people to think in MBA schools.”
THERE IS NO doubt of an element of exaggeration there. Even now, the majority of American corporations and Fortune 500 companies are helmed by MBAs. Besides, an MBA offers students the foundation needed to grow in businesses and in leading teams—to the extent that even the most brilliant of innovators hire MBAs to run their companies. Again, that is no excuse for resting on past laurels and not recasting the curriculum for the future of work.
The good news is that while B-Schools as institutions are coming under attack from within both the government and the private sector, there is a hard-nosed effort on a war footing to reinvent themselves at these management organisations. To be sure, B-Schools tend to face the same set of problems that the whole of academia confronts in terms of translating theoretical knowledge into application in a sector. For all practical reasons though, the stakes are high in management education. These schools in India as well as overseas, especially in the West, are making an all-out attempt to boost industry relevance and connect. Notably, many Indian B-Schools offer courses for students from family businesses to raise their competency, empathy and efficiency. For instance, IIM Calcutta offers a post-graduate certificate course in family business management titled PGCFBM. IIMC’s website says: “This programme is developed to educate and enable the owners/top-management of the family businesses in India to understand and learn how to tackle the challenges faced by them and continue to contribute to the national economy in a bigger way.”
At Indian School of Business, the post-graduate programme for management of family businesses (PGP MFAB) has been, according to the B-School, “designed to equip family business leadership with a specific set of skills which enhances their competencies and conditions them to capitalise on opportunities and challenges”. Its website adds, “The next generation of family business leaders will gain a deep understanding of business operations, master the latest management methodologies, tools and techniques, enhance their leadership skills and help drive innovation to create a business that endures for generations.” More Indian institutions are creating such courses, short or long, tailor-made for specific needs.
IN LARGER INDUSTRIES, many entry-level jobs that required managers have been eliminated by technology. In this age of “Uberisation” of the global economy, such jobs are automated and do not need any manager. The new positions that need managers entail machine learning expertise. As a result, new business managers in the posts require not merely people and system-management skills but also some element of technology knowhow. Enhanced managerial skills alone will not make a new manager employable. Unsurprisingly, many studies in India mark a good chunk of MBAs in India unemployable—it is this gap between skills learnt at B-Schools and those in jobs that educational institutions are struggling to narrow.
Despite this, MBA degrees have proved to be useful in landing high-paying jobs. They also enhance a job aspirant’s confidence thanks to his or her knowledge of the markets and corporate operations. Many studies have shown that MBAs earn more salaries worldwide than most others. In the field of investment banking, for instance, most positions go to MBAs. Certainly, B-School education helps pivot one’s career since one is aware of business principles and access to professional networks.
Liza Kirkpatrick, now assistant dean of the Career Management Center at the Kellogg School of Management in Northwestern University, writes in Harvard Business Review that there are right as well as wrong reasons why someone should get a business education, which is always expensive. She lists the following in favour of pursuing a business education: to future-ready your career, to explore new industries or functions, to accelerate your career path, and to expand and diversify your network. One of the wrong reasons, according to her, is that it is not a magic pill or a golden ticket to top-notch jobs. She says that it is not a course to opt for simply because you are bored in your present career, or if your parents are financing the degree.
Aditya Kapoor, an alumnus of BIT Mesra, India, and Rice University, Houston, US, who has worked in Silicon Valley companies for over 20 years before he launched his own startup during the pandemic, offers some insights about his experience in MBA education.
“Business skills are not the same as trade skills,” he says, adding that good business schools teach generic soft skills to equip you for any kind of industry, irrespective of how it evolves or what its business goals are. He understands the criticism MBAs face from small business owners, for whom product development and trade skills are more important than the intricacies of running large companies, but he believes they are still relevant for the millions of people who seek to join the corporate sector worldwide. “From product development to marketing strategy to finance, you study hundreds of case studies of all kinds of businesses and you make hundreds of proposals and presentations in your classes at B-School. That certainly gives you an edge in the corporate world,” he explains.
For this reason, he doesn’t recommend a student going for an MBA immediately after a Bachelor’s since he or she does not often develop a perspective on corporate work, its challenges and real-world scenarios. “For instance, Dell and Hewlett-Packard both make computers but after Dell was taken private, their priority moved towards margin dollars, while Hewlett-Packard is a publicly listed company so while margins are important for them too, their market share and top line revenue figures are what they are driving through their stock price,” he says, adding, “At a good B-School, they would teach you about both kinds of scenarios, and also how the actions of one company impact the entire ecosystem. Things change rapidly in markets, and good business managers are trained how to adapt and reorient based on their company’s goals and market needs.”
Kapoor, who is currently based in San Jose, California, points out that the average salary of an MBA is typically two-and-a-half times that of a Bachelor’s degree holder in the US, and so earning an MBA does count for those who want to join the corporate world.
Regardless of the disparaging remarks made by luminaries in the startup world about management degrees, it is no secret that such business founders find MBAs useful too. Kapoor says that is because a large part of the startup founder’s job, especially in the technology domain, is to pitch his product or startup to large companies. “So, knowing how corporate structures work, what such companies need and how they process potential vendors is important for them to be able to sell and market themselves to them.” This is where he sees the utility value of an MBA in the startup ecosystem, be it in India or elsewhere.
Reinventing themselves and continuing to remain dynamic and fast-evolving have become the mark of most good business schools that often strive to integrate their programmes with industry demands. Several Indian management institutes have begun rolling out courses where the focus on technology is on the ascent. This is a shift in line with the direction of the growth of businesses at the apex of which currently are Big Tech titans. More entrepreneurs and universities, too, are entering the education space to offer courses that wed management with cutting-edge technology. More players are adding to the competition and competitiveness. Students will definitely stand to gain from this growing trend. The columns and stories that follow reveal more about the advantages of business education.