B-schools losing sheen as reality sets in, says study

With reality check finally setting in among students who once coveted MBA courses for cushy corporate jobs, it seems the honeymoon is finally over for several of the country’s B-schools, which saw a sudden spurt in the past following unprecedented demand, with as many as 180 having shut shop in 2012.

Furthermore, more than 160 such schools offering Master of Business Administration (MBA) courses are expected to call it a day this year, with only 10 per cent of graduates from Indian business schools, excluding those from top 20 schools, getting a job straight after completing their course, compared with 54 per cent in 2008.

Providing this rather dismal and disturbing status study — Assocham (Associated Chambers of Commerce and Industry), in its survey, ‘B-schools and Engineering colleges shut down - Big Business Struggles’, notes that since 2009, the recruitments at the campus have gone down by 40 per cent in 2012, resulting in B-schools and engineering colleges not being able to attract students.

According to the study, barring graduates from IIMs, the B-schools are fast losing shine to attract corporate India for campus recruitment and increasingly struggling for survival, with only a miniscule per cent of those graduating actually being employable, despite the robust demand for MBAs.

3,60,000 MBA seats

Incidentally, in the last five years, the number of B-schools in India had tripled to about 4,500 amounting to as many as 3,60,000 MBA seats, collectively. However, lately the demand has begun to deflate with the economic growth rate at its slowest in the last nine years and the quality of education provided by B-schools coming under the radar, says the study.

MBA seats in India almost grew four-fold from 95,000 in 2006-07 to 3,60,000 in 2011-12 resulting in a five-year compounded annual growth rate of 30 per cent, while, unfortunately, job opportunities for MBAs did not grow commensurately. The MBA capacity in the country was built based on the project of a 9-10 per cent economic growth rate.

The reasons for the disenchantment with B-schools are not far to seek.  According to the study, most students observed that business schools promote their brands on placement and high salaries, while, in reality, they offer theoretical courses which lack practical skills required by the corporate sector.

Similarly, students too are to blame for the bleak fate of business schools, in that, they are not concerned about the quality of education in an institute, but are more interested in placement and salary data and discounts offered on the fee structure, which have set the rot in the education system, says the study.

The biggest reason cited being rapid mushrooming of Tier-2 and Tier-3 management education institutes which have not been able to match up to the quality of management education.
DH News Service

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