Tuesday, December 7, 2010

Management graduates for the Indian economy?

An article in the Times of India, Mumbai edition on 6th December 2010 drew my attention. It even made me think. And this article is a result of that thinking. Two pieces of opinion in the article were so contradictory that it made me smile. One, ‘a fancy MBA’ degree and two, ‘it accelerates growth’. It is agreed that MBA is a fancy degree yet head hunters are appreciative of the degree and find it a differentiating factor.

Having myself being a management graduate and working for more than a year now, I have a slightly different opinion on the management degree in the Indian context for an Indian professional. The Indian economy requires technical people more than management people. Engineers, commerce graduates, arts graduates, lawyers and other graduate streams. What is the reason for this erudite opinion of mine?

Lets look at the major streams in MBA. Marketing, finance, Human Resources and Operations. Of these 4, I will leave out HR and operations since the number of students opting for it are less compared to the more preferred marketing and finance. What is the use of a marketing degree? To increase sales in an ultra competitive marketplace and strategize to be one-up on competitors.

In India, apart from FMCG, telecom and white good companies, hardly marketing is required. The Indian consumer market is so big that even without marketing acumen, there would be sales. In the industrial goods sector, India’s cost competitiveness is going to hold it in good stead at least for the next couple of decades. The Indian PSUs such as ONGC or SAIL or NTPC are run by people who have tons of experience in the technical filed but not in marketing. Why can’t an ONGC be the next Chevron or BP? Why can’t a SAIL be the Arcelor or Severstal or Corus? Companies which inspite of being commodity producing companies are big brands.

The top managements of all companies barring a few who have the vision give the management graduates an opportunity to explore and work in a way which is transformation to the company. The other managements are very much resistant to change and like the comfort zone which management graduates try to break free from. The MBA graduates too are partly to blame for. They consider themselves equipped to change the company without understanding first the basics of the business. Their arrogance sometimes can be annoying.

The MBA degree has been seen as a magic wand which transforms the career of students. Students believe that the MBA degree should give them six figure salaries. They don’t think of whether the skill sets they have are applicable in the industry. Theory knowledge can take you only past the interview round. But the actual industry skill sets are to its extremes making it difficult to survive. The mushrooming of management colleges without affiliations and proper B-school teachers has resulted in students lacking the basic skills expecting to be in strategy teams of the corporate world.

Thus I think, a management degree is not essential to the Indian economy. Functional skill sets are more important except in certain industries and markets.

6 comments:

  1. i somewhat disagree that apart from a few industries hardly marketing is required...
    in fact almost all industries be it pharma or chemical or software services or capital goods manufacturing or even textiles..hardcore marketing skills are required...
    without aggressive marketing and sales..no company can survive..and its impossible for an SME to survive...this is where i feel the MBA can add value...with his all round skill sets

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  2. Now a days MBA has become the most sought after degree for the younger generation. After having done your technical degree, MBA is the only course that equips you with the managerial qualities that not just gets you a lucrative pay package and placement but also a head start in terms of an administrative position while others are still struggling in the basic functional areas.

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  3. i hope people do not interchangeably use marketing and sales... do u think that cipla or lupin (pharma) or Infosys, TCS, Wipro are going great guns due to mktg acumen of its top mgmt, i dont entirely think so.. The indian mkt is so huge that the only difference mktg makes is in the bottomline percentage (100% or 15%)... mktg or no mktg, there are going to be sales which isnt the case in the developed markets.. I am not saying that mba is a waste, its just that its true mba grads arent given the opportunity to show their skills since the status quo is enough for companies, save for the aggressive cos like M&M or Tata group or the Indian FMCG giants like Godrej, ITC or Marico or Dabur..

    MBA does equip people with the managerial qualities and u can take a leap in terms of designations, but the work done doesnt do justice to the MBA education... i still reiterate that the indian economy needs functional core competency employees rather than mgmt skills.. not in wholesome but in comparison

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  4. the managerial skills are more of theoretical knowledge than practical application... the market is so volatile or should i say unpredictable, that what has been learned yesterday become obsolete the next day... Yes, MBA does give u the all round perspective that is essential in business

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  5. ok..consider if a large company goes horribly wrong in a new product launch..or if the overall strategy is not in line with market demand or needs..it is bound to fail..irrespective of market size..why has Tata Nano failed to catch up in India..inspite of a huge market...why did kelloggs initially fail in india inspite of a large market...there are so many examples to cite...good marketing acumen is not just neccessary but critical..one wrong decision can cost the company millions.....

    now to clear another concept..today 95 percent of the countrys industrial units come under MSME (Micro small and medium enterprises..if you visit any of these enterprises and happen to ask them if you are able to make sales easily as there is a large market..their response will be NOT at all!!
    the SME market is ultra competitive...even a small mistake in marketing strategy can put the company shutters down...

    we live in a realistic world...where not just TATAs and Lupins and TCS and Wipro exist...think beyond ultra large enterprises and you will get the picture...

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  6. Yes, i certainly get the picture and thts the reason i have written about it... Tatas and the other brands were just an example.. I do agree abt the MSMEs and other small businesses.. I never said that mktg wasnt important or that it was not necessary.. without mktg it will be suicidal... What i have said it that the indian economy has certain requirements which necessitate more technical acumen than mktg... because indian products and services, domestically and in exports, differentiate themselves more in terms of price.. India has the cost advantage compared to the developed economies.. thus i want to say that the management graduates churned out do not get the mktg profile they look for,, rather it wud b better if they had stuck to a technical area of expertise .... it wud not only have helped their careers but also the companies they work for..

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