Measuring the Worth Of An Indian MBA?

I have been active on MBA forums for two and a half years, and now I am also in a B-School - IMT Ghaziabad.

Well, one thing that is repeatedly mentioned on B-school forums is the term ROI - Return On Investment. Mr. X usually intends to mean monetary ROI - the college fees compared to the average package. If the fees are lower than the average compensation, the ROI is "good". If they are higher, it's "bad". If they are extremely low, the ROI is "fantastic". FMS Delhi, NITIE Mumbai, LBSIM Delhi, and the MMS courses of Mumbai B-schools like JBIMS, are the ones that charge very low fees - ranging from Rs. 40 K to Rs. 2.5 L for the entire course. The placement figures of these B-schools are also very good, with average salaries ranging from Rs. 6-7 LPA to Rs. 14 LPA as of 2010. So you actually manage to pay off your entire loan (if you have taken one) in the very first year of your job. That is, undoubtedly, great.

Then you have the IIMs - the best B-Schools in the country - at least 6 of them are - with high fees ranging from Rs 10 L Rs to 13.5 L (IIM-A) for their course duration. The average compensation ranges from about Rs 11 L (IIM-I) to Rs 15.32 L (IIM-C) as of 2010. These schools then, by the definition of Mr. X, give lower "ROI" than the ones I mentioned before them. For the purpose of earning quick, these are less effective than the former ones.
But IIMs do give considerable concessions to low income students, so for these people, the ROI is good.

The third category of schools are the private B-schools which fall in the top 15 or 20 of most rankings, and are considered worth applying to by good performers. MDI Gurgaon, IMT Ghaziabad and SIBM Pune are the most prominent ones in this category. As far as my knowledge goes, these B-schools do not provide fee concessions to low income students. SIBM-P provides concessions to "lower castes".
For the general category in these B-schools, the fees are in the range of Rs 10-11 L for the course. The average (claimed) compensation that these B-schools offer ranges from Rs. 8.8 LPA (IMT-G) to around 11 LPA (MDI) as of 2010. Certainly, with no fee concessions and average packages lower than those of the IIMs, the monetary ROI these schools offer is lower than either of the first two categories. The fees exclude the expenses for a foreign exchange programme - a few lac rupees.

And here's the interesting part - once upon a time the IIM fees were lower than Rs. 2 L for the course. And at that time, most other good B-schools too had almost as low fees as the IIMs. The IIMs increased their fees and the other schools followed them!!

So is monetary ROI the ONLY thing that differentiates B-schools? Obviously not. The infrastructure, faculty quality, placement profiles, alumni network, international linkages...that the IIMs offer (at least IIM A, B, C offer) are way superior to just about all other B-schools in India. The resources that the IIMs have at their disposal, being non-private colleges, and the strength of the IIM brand, have no parallel.
For these reasons, IIMs are the coveted places. Given a choice between IIM-C and FMS, or even IIM-K and FMS, many students choose the former over the latter, despite the huge difference in the ratio between salaries and fees in the two colleges.

So, when it comes to the IIMs, "ROI" usually takes a backseat.

Okay. Now the ROI question does not arise even when comparing a non-IIM, top-10 or 12 college with a Rank 11 to 20 college. Because some of the top non-IIMs have great monetary ROI, and all have better brands that the Rank 11-20 colleges.

The question really arises when one has to choose between colleges ranked below 10/12, but not below 20-25.

As reference for viewers unacquainted with the MBA field, here is a ranking of colleges (by Pagalguy for 2010 - considered quite credible in general):

http://www.pagalguy.com/rankings/2010/national.php#overall

Now coming to the crux.

The ROI problem is not entirely dismissible. By that I mean that holier-than-thou statements like, "the value an MBA from a good B-School adds to you and your future is much higher than the monetary compensations."
Such statements are not invalid, but they ignore a basic truth - one needs to live decently in the years following an MBA. One cannot spend most of her income on paying off loans, work hard at office and then live in a shanty.
So for that reason alone, monetary ROI matters big time. I shall write about the tendency of B-schools to raise fees and the number of seats, and open multiple campuses, in the next post.

However, there are things beyond monetary ROI, ones that really MAKE a B-School. Student activities form an important part of this. The number and quality of opportunities the students get to express and hone their academic and non-academic skills, is an important variable.

Another important variable is the presence and quality of international linkages - exchange programmes, tours, faculty visits.

A third important variable is the quality of full time faculty. Learning through faculty interaction plays a major role and the role of the faculty, as a guide and facilitator is invaluable. The skills that a good faculty must possess are not just good teaching skills, but holistic knowledge of the subject, good communication skills, decent leadership skills (for example the ability to hold a class's attention) and a degree of maturity in interacting with the class.

A fourth variable is infrastructure - not just limited to a WiFi connectivity on campus. Library resources, e-learning resources, Audio Visual resources, academic block quality, all are parts of infrastructure. So are the quality of hostels and the quality of food!

Alumni networks matter because alumni help the college get good placements. Alumni also often contribute to the direct brand image of a college, and may take guest lectures also.

Then comes batch size. A higher batch size implies more fight for placements and in some cases, for infrastructure usage. This I shall write about in the next post.

These are the most important non-income variables. These differ reasonably among B-Schools, and considerable weight should ideally be attached to considering these variables. The problem lies in three things - one, the bandwagon of B-School placement figures and the halo created by them, two, in the lack of proper, credible and transparent tools or methods to assess the above mentioned non-income variables, and three, in the Indian social system (Yes!).

I shall talk about the first two here and leave the third for an exclusive post.

The first one is almost self explanatory - given the considerable advertising done by B-schools in this regard - and the release of a formal yearly Placement Report mentioning the average compensation - which all contributes to the "money is everything" concept.

The second one - lack of accurate tools - means that aspirants have no foolproof way of judging the true worth of a B-school, given the emphasis on placement reports and the halo created, and that aspirants are never taught to look at factors beyond placements. B-schools not only just put out placement reports, they often misquote the figures - inflating them. Also, very importantly, never does a B-school publish detailed data about the quality of its infrastructure, or any material that would help judge the quality of its faculty (A PhD does not imply one can teach well) . If an aspirant is asked the intricacies that make a B-school infrastructure or faculty good, she would have no answers.

The lack of stringently monitored regulations means that private B-schools have ample scope to lie and paint rosy pictures. Combined with the aspirant's focus on placement figures, the end effect is devastating to the noble and desirable motive of good learning, and of creating great managers and human beings. This is very sad.

The next post will be about a relatively recent phenomenon - continuous increases in B-school fees, batch sizes and opening of multiple campus, and how this impacts quality.

It's Time........

I have just learned discipline the hard way.
I had it coming for years.
I knew my luck would run out at some point.
It has run out now.
It's time to work hard.
It's time to earn the glory.
It's time to stop relying on intelligence, on natural ability, and on empathy.
It's time to stop believing in the magnanimity of the world.
It's time to live up
to the potential that is in me.
It's time to think really hard.
It's time to show the unbelievers
how good I really can be.
It's time to show the believers
that they believed right.
But above all it's time
to prove my mettle
to myself.
Why do I always wait till the water is up to my neck?
Why do I always make horrible starts?
Why am I always slack first and toil later?
Why do I have to learn my lesson always?
Why do I end up making a decent goal look like a hugely tough one?
No idea.
It's the dark side of me.
It's time to bring out the good side.
It's very high time to be damn good.
There is no way out.
For years I have rode my luck.
And used the natural gifts I have been bestowed with.
But it's all or nothing now.
There will be no more chances ever again.
I'm on my last chance ever.
On my last chance........EVER.