Monday, January 4, 2021

MBA Delusions

It is only in the mid-1970s that the MBA course became popular and demand for MBAs increased. There were no written exams to qualify for admission till 1981 when IIM-A started it. This then became the CAT in 1984 for all IIMs. From less than 100 institutes then, India now has over 5000 institutes offering MBA courses. All of them together produce about 2 Lakh graduates a year. Of these, hardly 4000-5000 get very good jobs. Most get low key jobs paying 8000-10000 per month and currently some 45% of them don’t get a campus placement and have to hunt for jobs like every other graduate. PM Narendra Modi inaugurated a permanent complex for IIM Sambalpur in Odisha on January 2. From 4 IIMs in the 1990s the count has now grown to 20. With the increase in numbers, the quality of MBA education hasn’t gone up. Most of the private and university institutes are rotten and don’t even have proper faculty.

PM Modi’s expectation of management institutes is somewhat faulty and reflects rather poor understanding of what management schools are meant to do. I wonder what he meant by innovation, integrity and particularly “inclusion”. No management course teaches any of this. It seems Sickularism has made it fashionable to include the word “inclusive” and “inclusion” in everything. We may soon see a day where even the south Indian “Sambaar” has to be inclusive to include all possible vegetables. An MBA course is basically one to manage and grow an existing business. It is not an “entrepreneurship” course. What Modi is seeking from MBA schools is entrepreneurship but their course is not intended for that. MBAs are essentially “Maintenance & growth managers” intended for existing industry. A few may also turn entrepreneurs but that is not because of the course but because of their own ideas and inclination. Here’s a brief history of how MBA institutes started:

The first Indian management school, XLRI, started in 1949. One more started in 1953, then FMS, Delhi was established in 1954. Two IIMs – Calcutta and Ahmedabad started in 1961. From those beginnings it has now grown to around 5500 institutes. There isn’t a shortage of institutes. There is now a shortage of quality graduates and, unfortunately, except for the Top-30 or so institutes most of them are unemployable as management personnel:

For most students, the purpose of an MBA diploma or degree in India is not enterprise but to land a good job with a hefty salary. But a vast majority doesn’t get anything like that because of the poor quality of intake and poor quality of output. It is a fallacy that teaching at IIMs or XLRI is so great that it produces great products. Absolutely not. The simple fact is that the top institutes take in only the best of the students with exceptional academic and skill records. Such students excel with even below-average teachers. The rest have to settle for other lower level schools. Even among the IIMs, only the top 4 or 5 command respect and fat salaries, the rest do not. Many aspirants do not enroll for an MBA course if they don’t get admission to a top-20 business school:

Note the fact that students don’t wish to complete admission process in IIMs like Vizag, Bodh Gaya, Nagpur or Sambalpur. So, the PM waxing eloquent about what the Sambalpur type IIMs hold out is not entirely true. The problem now is not a shortage of quantity, it is a shortage of quality. In his speech, Modi has talked about the culture, tourism, handicrafts and local products of Odisha that might be promoted by the Sambalpur graduates. The MBA course has nothing to do with cultural and tourism nonsense unless that turns out to be your business itself in which you might work. The target of an MBA course is not to promote these things but just run a good business, manage resources and manage growth. Modi overlaps entrepreneurship with management. Both are two different things. He talked about startups that became “Unicorn” companies in his Sambalpur speech but India is lagging behind on that front:

A unicorn is a startup that reaches a value of $1 billion fairly soon. MBA schools cannot teach how to create a “unicorn”. In fact, some of the biggest business successes of the world are all people who never had formal education or dropped out of college. Some famous names are Dhirubhai Ambani, Gautam Adani, Bill Gates, Jack Dorsey, Mark Zuckerberg, Walt Disney. Steve Johs and so on. The list could go into thousands. What India needs is entrepreneurs and more MBA schools are not going to deliver that. Modi is totally under a wrong impression about that. Even some recent unicorn guys are non-college guys like Ritesh Agarwal (Oyo Rooms).

Entrepreneurship cannot be taught. It is learned only as one takes risks with guts on a startup of any kind. There is indeed an Entrepreneurship Development Institute (EDI) in Ahmedabad but the course mostly consists of processes, laws and strategies etc. There is no demand or rush for admissions to their course and it is still open for the current year. India needs millions of entrepreneurs instead of job-seekers. This can be achieved only by govts actively encouraging youth to prepare projects, help them prepare a financial and feasibility report, fund them liberally and take the risks that any venture capitalist or funder takes. There is absolutely no sense in more IITs and more IIMs anymore. Govts tout such increase as a great achievement which it is not. Govt must regulate and raise the quality of private institutes rather than waste public money on institutes that are not going to be attractive anymore. One of the reasons for the fall of output from IITs and IIMs is the level of worthless Reservation:

With almost 50% seats reserved for non-merit enrollments there is hardly any chance that IITs and IIMs will produce great results in terms of managers or entrepreneurs. There are many IIM graduates who are working in govt departments or banks or PSUs which provides them the same “security” of employment that a regular graduate seeks. Some of the institutes have become dens of Commies and run Periyar clubs with no academic performance. The IITs also run bogus courses like “Humanities” at public cost. In the last survey available, not one of India’s institutes or universities figured in the top 300 of the world.

Modi claims that his govt had opened up 7 more IIMs since 2014. This is true but it’s of no practical value other than producing more MBAs. The newer institutes have no attraction for the students and neither for prospective employers. And when they finally do get a placement, it is at very low salaries which naturally upsets the students. Modi brags about the population of Indians in the IT industry worldwide. Yet, hardly any Indian has created world-popular products like a Google, MS products or even the banned TikTok. ModiSarkar is under the delusion that they have grandly reformed education – from school to higher education. In reality, education is set to become worse in India. Not only is the quality of teaching and learning worsening, the outcomes are poor and the curriculum as stagnant as a dirty lake in one of our cities.


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  1. An excellent article exposing the myth of MBA. This article is not only applicable to MBA but the whole of education system in our country. Its time we revisit our education policy syllabus, and change the mugging system of examination and marks. More importantly the syllabus.

  2. So True ! yes the employers go to hire people there & hence the attraction ! The quality has drastically reduced over the years ! what they don't teach at Harvard could be a good beginning for babus ! There was one on SM who had a case study of how he hired the best of mechanical engineers and kept Indian Two wheelers flag flying ! The Chinese could not beat it ! hope Piyush goyal learns quick and keep the advantage gained in PPE , ventilator & pharma manufacturing and do not squatter it again just like our textiles /metal industries . He would do well to foster Indian HR with inherent intelligence in dealing with numbers ! In the customer service front desk we have already lost out to philippines as is evident in Dubai

  3. Thanks Ravi for the wonderful post. I shared this post with quite a few MBA aspirants within my family/friends. Many people have wonderful ideas to become an entrepreneur but dont have the risk taking ability for many reasons. One of the biggest reasons is cost of capital. The government by following stupid socialistic policies and being the biggest promoter of companies (via the PSUs) leaves very less capital for productive businesses which we can call it as crowding effect. There are more than 1800 PSUs and barring a few most of them need to be sold off. It is a drain on taxpayers money. If the capital is freed up for private enterprise, the risk taking ability will increase significantly. I sincerely hope that some day we will get a government that will encourage free enterprise in letter and spirit.

  4. The last sentence ... Good one

  5. India needs wealth creators..

  6. Great article. These points are applicable for all types of degrees not just MBAs. The need of the hour is quality and the ability to scale up that across the country. Unfortunately priority is mostly on getting a job so that a fat salary can satisfy personal material accumulation. Focus needs to be on doing something impactful which can be within an Organization or outside of it as an entrepreneur. The outcome would be a bit delayed but exponential and satisfying.

  7. I remember my me too MBA from Mysore University back in 1979, less said the better, all faculty below par, political hand outs, also Reservation beneficiaries, just waded through with no real benefit accruing

  8. Quality of education in India has badly deteriorated ! Waste of Years ! it is the only field in India where costs are 10x and return zero ! . Other fields learning is being compressed even in high tech fields. Look at the innovation of electronic/telecommunication/IT/Space and lower costs . In India you keep spending 5-10X and still can't get a good job. Return on Investment any one !if I remember E&Y is no longer demanding a graduate degree for applying for jobs .
    in UK, natives opting for college ere guaranteed minimum wage after completing degree Not sure of now . ( it is other story that statistically significant opted out /did not pursue not qualified )
    In US if you have two hands you are worth 8-10 $$ an hour . Pre-Nursery playschool teachers get 20-25 $ hour to handle toddlers skills certificates mandatory and mind you the risk of being sued remains on the head 24*7. Here In India even Phds apply for a peon job !
    is it planned to keep people spending and wasting Years to Produce JNU type intellectuals Nirmala sitharaman the latest as if we had not enough of PHds Prakash Jawdekar, Nishank. Is it the reason that they opted to promotions to all till Xth standard just to increase the number of educated. Incidentally none has compared the crime rates and other negative HDI indexes- (not opting for vaccine, birth control , believe in jesus/allah cure) HDI Indexes for stunning compared with giving LPG, Bank access to all as new welfarism)
    World over idea generation , idea incubation , problem solving abilities are gaining lot of traction besides the host of skills for managing basic life requirement be it cooking, cleaning, washing , serving - Self dependent any 1 . The UP/Bihar 0/100 toppers and 80 crore India clan consider it their birthright to be served for generations by Honest tax payers of 10 crore middle class pool
    IN US even president children have worked as waiters as interns but here work is a taboo ! Here Hindu Biz are mocked for going out for apprenticeship where there is real learning .
    PM would do well to categorically state the vision and mission of IIMs and measure it at regular intervals. Just like he cited LPG 4 100 5 from status of 55% achieved in 68 years to all as a a management lesson.

  9. Time to scrap all MBA programs & give importance to techocrats linking with industry & entrepreneurs. India seriously lacks design capability. Look at any Indian websites, mechanical products, fabric industry, automobile industry, in all the industry segments, we have 3rd rate engineers sitting & quality engineers are all exported to USA & Europe. India does not ONE research organization - if any present it is Khangress research party & BJP research party - both are sewerage organizations

  10. Last year IIT-JEE entrance few toppers already had admission from foreign colleges, though they appeared for test their knowledge on subjects.

    After clearing entrance they preferred foreign college and not IIT.

    Looks like IIT going IIM way.

  11. What about opening separate universities for reservation students with 100% reservation and separate universities for students competing on merit with 100% reservation for merit? Wouldn't such segregation instead of mixing be wonderful?

  12. Excuse me for commenting here on Twitter/FB/Google censoring & suspending trump ! does it prove that world over it is jiski lathi uski bhains ! it is idi amin s filing ! banana republic ! public must remain slaves 4 ever ? constitution freedom has no meaning ! in india it has always been gandy marji gandy rule ! now in US too n ways to subvert it ! another self sycophant closed group to ayyash on tax payers money ! the charade of democracy ! not 1 sup motto call by SCOTUS. & we read of billion dollar compensations by media for violation ?
    I now bow to Indian vedas upanishads & the kings of yore ! all the hindu temples have idols of rama/Krishna & their consorts & bhakta ! even outside , the frescoes do not have kings pictures ! they knew they were temporary ! now gandy/nehrus have hundreds of acres of prime land & every 2nd street owned by them as per the name tag !
    In this situation what should honest India do ! back to dark days of presstitutes and emergency ! the Indian establishment & judiciary waiting 4 it !


  13. The situation is even worse for engineering colleges, there are so many engineering colleges that over 50% seats have no takers and the situation in the new IIT's is the same as these new IIM's.. you want to get into the top 6-7 IIT' the other IIT's will take decades to reach that level.

  14. I wanted to say this but you blocked me on twitter.

    Dear MC, You are my inspiration fortunately

    You fight the war with the weapons you have, not the weapons you wish.

    Who is next in line after Modi

    Shah ?
    Yogi ?
    MediaCrooks ?


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