NEP and the Imminent Rise of BBA Challenging the MBA

India boasts of more than 3300 odd institutions offering MBA with a sanctioned intake of four lakh plus, which is the highest in terms of numbers globally. Why have MBA programs thrived in India? What has been the performance of these MBA programs?

The MBA degree thrived in India because the undergraduate qualifications failed to produce employable graduates (barring a handful of the institutes), and MBA became a gateway to the first job. According to a New Delhi-based employment solutions company Aspiring Minds, as many as 97% of graduating engineers want jobs either in software engineering or core engineering. However, only 3% have suitable skills to be employed in software or product market, and only 7% can handle core engineering tasks. With around 15 million youngsters entering the workforce each year, corporate India and research institutes seem to agree that 65-75% of them are either not employable or not job ready.

While the graduates made a beeline to enroll in the MBA programs, a recent ASSOCHAM study revealed that only 7% of the B-School graduates in India are employable. This is not surprising as only 12 institutions in India have global quality accreditations like AACSB or EQUIS. In the absence of quality, it is inevitable that more than 40% of the sanctioned intake remained vacant across MBA programs in the country.

It is interesting that globally, the number of applicants to MBA programs was down for the fourth year in a row in 2018, a trend now affecting even the most elite universities. Applications for U.S. business schools were down 7% from the previous year, the Graduate Management Admission Council (GMAC) found. Top business programs such as Harvard, Wharton and Stanford had been considered immune to the MBA downturn, but they also saw drops in applications this year: 4.5%, 6.7% and 4.6%, respectively.

In stark contrast to the MBA programs, the Masters in Management (MiM) programs showed the sixth year of continued application volume gains according to GMAC’s market intelligence. Designed for those at the beginning of their careers, MiM is taken by students with an average age of 22 years. About 60% of MiM students have no work experience and around 30% have work experience of fewer than two years. Globally, MBA programs are for professionals with several years of work experience under their belt. If we look at India, MBA programs are more like MiM programs abroad preparing students for an entry-level position into their professional career.

Unlike the USA, very few of the top MBA schools in India has a business bachelor program, which forces aspirants looking for a career in business, to go for an MBA. It is worthwhile to note, that the gap between placement outcomes of the undergraduate and the graduate business programs is not so wide there. The average annual base salary for the undergraduate Class of 2018 is $75,068 at University of Virginia and that at State University of New York at Albany is $43,100.

It is apparent that there is an urgent need for good business bachelor programs in India in sync with the developed countries. Business Schools in India have been finishing schools of the country and have been playing the role to package our talent and place them in front of the corporate world. With the ‘New Education Policy’ (NEP), the polishing will now be done in the Undergraduate Programs. Four-year programs should be a good timeframe to create professionals who may not require doing an MBA immediately post their BBA. Management institutions will need to diversify into multiple disciplines to include Arts, Humanities, Science, Sociology, Design, law etc., which is also in sync with the NEP.

Question is, who can take the lead? It is incumbent on the top schools especially the ones benchmarked with the global standards, like AACSB/EQUIS accreditation, to set the standards, with futuristic curriculum, pedagogy, faculty and global partnerships.

The good news is that forward-looking schools and new age universities have initiated action in this direction. The BBA program of IFIM Business School from the newly launched Vijaybhoomi University is a step in this direction. The program offers a broad basket in the first two years, which include areas like Social Sciences, Humanities, Language, Performing Arts, Design and Science before they get into their business courses. The success of this experiment is expected to usher in a new age BBA revolution by the top schools of India including the IIMs, who can now confer degrees at various levels. With the launch of such BBA programs, will the MBA in its present form survive?

Dr Atish Chattopadhyay
IFIM Business School, Bangalore.