Doing an MBA in India: Business School Reputation

TopMBA.com finds out how, for MBA candidates in India, a business school's reputation makes all the difference. 

Traditionally, the MBA degree has been considered a golden ticket to the world of professional success in India.

The country's top business schools such as the Indian Institutes of Management (IIMs) and the Indian School of Business (ISB) in Hyderabad, have earned pride of place in the global management education arena.

IIMs’ success stories include Raghuram Rajan, ex-chief economist of the IMF and professor of finance at the University of Chicago Booth School of Business; Sunil Gupta, professor of business administration at Harvard Business School; and Indra Nooyi, chairman and CEO of PepsiCo, to name a few.

Despite the aura surrounding the business qualification in general, the profile of the business school is what adds muscle to the MBA degree, according to industry and recruitment firms in India.

Aayush Sharma found this out the hard way after graduating with an MBA from a newly established business school last year. Unable to get a job for nearly a year, Sharma now works at a business outsourcing company in Delhi, earning less than what he paid to get the degree.

Business school selection: caution advised

Unfortunately, there are many others like Sharma who have invested unwisely in management education from institutions that are simply not respected by employers.

"Large companies generally zero in on leading business schools such as the IIMs and ISB when they are conducting recruitment interviews," says Kris Lakshmikanth. Lakshmikanth is the founder, CEO and chairman of Bangalore-based recruitment firm, Headhunters India.

"It is a well-known fact that there is a large pool of talent at these institutes and corporations do not want to compromise on quality when it comes to hiring people."

Arun Pereira, clinical associate professor, and head of the Centre for Teaching, Learning, and Case Development at ISB adds: "Traditionally, the value of an MBA was measured by the extent to which it opens doors to new opportunities and career options.

"Today, for many students, there is the added requisite that these opportunities and options are global in nature, drawing on the exciting career growth prospects that are tied to emerging markets."

There is a significant gap between demand and supply of management education in India. Of the 3,000 schools in India, the top 25 almost always include the IIMs, ISB and a few others.

The remaining institutes can often vary widely in terms of faculty, curriculum, infrastructure and placement records.

The stiff selection criteria followed by the top schools bear testimony to their commitment to excellence. This apart, the leading schools boast of 100% placements, with salary packages of graduates at around Rs8 lakh (US$17,800) per annum and above.

Students from lower ranked schools on the other hand, often receive packages as low as Rs1.5 lakh (US$3,340) per annum after struggling to find work during the placement season.

According to the QS Top MBA Jobs and Salary Trends Report, India and China have typically reported much lower MBA salaries than more mature markets, such as Japan, Korea or Australia.

A 3% drop in MBA salaries in the region can be explained by the increase in new MBA employers entering the marketplace, coupled with an increase in the supply of MBA graduates from local business schools, many of whom are willing to accept lower salaries than graduates of established international business schools.

The TopMBA.com report reveals 100% growth in demand for MBAs in India and strong demand growth in other parts of Asia where salaries have traditionally been low but are set to catch up with the rest of the world.

In fact Asian employers targeting top international business schools are becoming more competitive and offering salaries which compare directly with their Western counterparts

In India, the IT, consulting and micro-finance sectors witnessed significant MBA hiring increases during 2010.

E Balaji, managing director and CEO of global staffing services firm Ma Foi Randstad summarizes: "Job opportunities for an MBA are aplenty, especially in the present scenario. However a candidate being chosen will depend upon one's abilities, the reputation of the educational institute, academic performance and special skills.