The Rise and Fall of MBA
Masters of Business Administration or its popular abbreviation MBA, is one of the most sought after degrees in the modern era of education. The years 2010-2012, were even considered “the years of the MBA”, with majority of the graduate population opting for a degree in Business Administration when choosing a specialization. According to Forbes Magazine, “(in 2010-2012) …191,571 people graduated from U.S. schools with advanced degrees in business, some 25.4% of all the master’s degrees conferred. That compares with 178,062 master’s degrees in education, or 23.6%, of all the advanced degrees…”
One of the main reasons undergraduates preferred a MBA is for the vocational ability it offered. In comparison to other technical and often theory-heavy commerce specializations, the MBA was able to break the barrier between theory and practice. In some sense, it promised real-life application of technicality and truly equipped students for operations in competitive markets of any kind. Other than this, MBAs were profitable. It ensured almost immediate employability for anyone with this degree in high tiers of industry soon after university. Read here about the utility of earning an international MBA degree. But times are changing and the market demands more technical knowledge from those entering it. With the slow dilution of its value, the MBA can no longer hold the torch of being an illustrious degree.
Reasons Why MBA Lost its Value
Here are some facets that led to the devaluation of the MBA:
1. Increase in Demand
Frequency of the number of applicants and seats offered has significantly watered down quality of education especially, in the MBA-universe. According to statistics procured by NDTV, “(Indian context) …In the last five years, the number of B-school seats has tripled …in 2015-16, these schools offered a total of 5,20,000 MBA seats…” As a result,many reputed colleges have not been able to keep up a satisfactory teacher-student ratio, resulting in a lot of confused MBA graduates.
Correspondingly, institutes offering the high-in-demand program needed methods to adapt accordingly to the sudden increase in demand. Mass-teaching, rote learning, and theoretical practices are now what define an MBA. This made most of graduates of the program, unemployable or ill-equipped to dealing with the workplace –the anti-thesis of being an MBA holder. Currently, only 7% of a graduating MBA population is employable in the country. (Source: ASSOCHAM report)
While the situation at home seems grim, the reputation of an MBA degree shares the same predicament abroad. In 2013, the Wall-Street Journal recorded an all-time low value of the degree, a statistic that has been dipping since. This was the result of an increase in the demand for the program. Based on statistics collected in 2012, the United States found that MBA had become the most popular postgraduate degree, accounting for about ¼ of all Master’s degrees awarded annually. That’s approximately 200,000 MBA’s in 2012. (Source: Forbes)
2. Lack of Vocational Training
Most MBA holders lack the crucial ability to apply themselves to different situations,which is an ability they should acquire as a result of studying the program. MBA graduates especially lack skills in the fields of communication, inter and intra-personal management. This lack of knowledge, especially of foundational qualities,proves disadvantageous for those who pursue an MBA. The added inability to apply technical knowledge makes anyone with an MBA unremarkable in comparison to those with nuanced commercial degrees.
3. There are better options, simply not unique enough
MBA graduates have now found themselves in competition with Chartered Accountants (CAs), who possess the same theoretical knowledge as them, with the added advantage of having skills in the areas of law and industrial technology (IT). Industries are more inclined to favor CAs for their practical and technical understanding of administrative work and especially for their managerial skills.
Sadly, the misery for MBA graduates doesn’t end there. Equipped with only a pure theoretical understanding of administration, MBA holders often struggle while trying to outshine most other graduates who hold professional degrees. Unlike other graduates, MBA students are now faced with a lack of vocational training, which other professional degree holders possess. This significant disadvantage makes them less likely to be employed in the higher ranks of a company.
4. Time and Expense
Another major disadvantage to pursuing an MBA is the time constraint it applies on those who pursue it. To achieve a reputed MBA, one must invest anywhere from two to five years. This would involve losing out on primitive work-experience that is vital to employability. Professional degrees in comparison, take far less time to complete and ensure better returns.
To MBA or Not to MBA?
For all these reasons and many more, MBAs are losing their shine in the spotlight. Arguably, the greatest disadvantage of the program is the popularity. It’s up to the institutions who offer the program to innovate and possibly rethink the structure to improve the quality for its students, to perhaps salvage any value that the course may offer. And an MBA program from the best institutions is still beneficial for the students. Please do share your views in the comments. Also, do not forget to mention the feedback and suggestions.
” The worth of any course depends upon the its quality and the quality of the institution offering it.”