Why is MBA so much in demand?
MBAUniverse.com Bureau

According to the report `Management education in India` by management education experts B Bowonder and S L Rao, "Changing economic conditions and intensification of global competition have given management education an increasingly central role in the success of individuals and corporations. It has emerged as one of the main foci of higher learning, as service industry takes precedence over the other segments."
The emergence of new sectors and businesses, together with economic growth has altered the whole business scenario, albeit for the better! It has made organizations and businesses more complex, competitive and challenging.

Dr. Devi Singh, Faculty and Former Director, IIM Lucknow says, “the boom in the overall economy for more than a decade now has lead to a crucial need for more skilled managers in every sector. Organizations are expanding into new sectors like retail, banking and telecom and this is driving the demand for managers.”

Experts opine that success in the 21st century is all about `Ideas`, and management education helps in fine-tuning these ideas. Says Santosh Desai, “Today, the shift has taken place from the notion that money makes money to ideas make money. I think this is a substantial shift. Businesses are now more based on ideas. You will have huge opportunity to convert your idea-something that you stand for into reality. It is the power of individuality and idea. All the brands built in last few years have been built by individuals. Look at Nokia, Starbucks, and Nike -- all these are individuals.” This shift in notion means to stand out in the business world you need to have unique ideas. An MBA graduate can do it successfully.

New growth sectors like Telecom, Healthcare, IT/ ITES, Retail etc are further fuelling demand for management graduates. Take the retail sector. The big Indian retail players who have expanded their operations in recent years including Shoppers Stop, Pantaloon, Lifestyle, Ebony, Crossroads, Globus, Barista, Qwiky`s, Café Coffee Day, Wills Lifestyle, Raymond, Titan, Bata and Westside. Krish Iyer, a retailing industry expert, says, "The organized retail industry in India is a mere 3 per cent [estimated at Rs 35, 000 crore], which highlights the huge opportunity available, and it is poised to grow to Rs.110, 000 crore by 2010."

The placement scenario in reputed management institutes was quite upbeat last year. During the placement season 2007-08, institutes like IIMs, XLRI Jamshedpur, MDI Gurgaon, SP Jain Mumbai, IMT Ghaziabad and IIFT Delhi were crowded with various top companies like Infosys, HCL, IBM, Wipro, JP Morgan, ICRA, ITC, Godrej, the Aditya Birla Group and Nestle.

Lets take a look at placement data from 2007-8 season.

The salaries offered at IIM-A exceeded all expectations. The average domestic salary was a high Rs 17.85 lakhs, a whopping 30% jump from the last year`s package. The average international salary too was a high $ 1, 19,000. The highest international packages ranged from $ 280,000 to $ 360,000 depending on minimums and bonus. The highest domestic packages were in the range of Rs 50 lakhs to Rs 70 lakhs. IIM-A shares that 65 % of students got placed at the end of coveted day-zero, which saw 25 firms recruit the brightest managerial talent.

The placement scene was equally buoyant at Indian Institute of Management, Calcutta (IIM-C). A student received an offer of Rs 1.36 crore! The average domestic salary was pegged at Rs 16.4 lakhs. There were several domestic offers made in the region of Rs 65 lakhs to Rs 70 lakhs.

The younger siblings of the IIM family too created their own benchmarks. Indian Institute of Management, Kozhikode (IIM-K) and Indian Institute of Management, Indore (IIM-I) have recorded their best placement season ever.

The domestic average at IIM Indore was a healthy Rs 13.07 lakhs, which is 20 % higher that last year’s average. At IIM Kozhikode, the average salary was up 16% at Rs 14.83 lakhs. The highest domestic salary was a high Rs 29 lakhs.

If you thought that these fat packages were only for the lucky ones at IIMs, you are in for a big surprise. There were many other B-schools who left even IIM salaries far behind. Take Delhi University’s Faculty of Management Studies (FMS). The average domestic salary that their MBA graduates garnered was a high Rs 15.31 lakhs. And was a whopping 27% higher than last year! Admittedly, FMS is at an advantage – it runs a smaller batch size of 99 candidates in its flagship MBA course, compare with around 250 candidates placed by IIM-A, IIM-B and IIM-C.

XLRI, Jamshedpur too attracted top recruiters and a high average salary. For the batch of 180 students, the average salary stood at Rs 14.75 lakhs and the highest domestic offer was Rs 28 lakhs. The average international salary was USD 90,000.

Mumbai based Jamnalal Bajaj Institute of Management Studies (JBIMS) recorded an average salary of Rs 13.94 lakhs.

However, given the economic slowdown that global economy and India is currently facing, the placement scenario is likely to be less buoyant this year. Overtime, as the economy picks up, demand for managers will pick up too.

So who can aspire to be a management graduate? The MBA option is open to graduates from any field. If your current path is less than a perfect fit for your aptitude and interests, B-schools can give you the opportunity to explore your options, and then provide you with training to change your career entirely. Whether you are a doctor, an engineer or a businessman, all you need is a graduate degree to apply.

Today, MBAs are also being encouraged to turn entrepreneurs. It enables you to think of your own business idea. An MBA can prepare you to do everything from writing a business plan to acquiring venture capital to launching an IPO. In other words, it is developing your entrepreneurial potential by focusing on value-based solutions, developing creative problem, solving basic skills and perceiving the change as an opportunity.

Dr. Pankaj Chandra, Director of IIM B, says, “The best part about B-schools is that the programme there is based on learning how to build and mould innovative organizations. But the catch is that management education is not only about industry and corporate. The concepts of management are equally applicable to any kind of organization whether it is a hospital, NGO, museum or a public administration office etc.”

Apart from this, another key benefit is networking. B-schools encourage teamwork through their teaching styles. Throughout the MBA program, a group of five to seven students work on various assignments. The people in the group are from different backgrounds, with different levels of experience. You can develop important relationships that serve you throughout your life.