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Rahul Bajaj has it, Lakshmi Mittal doesn’t; do you need an MBA?

Rahul Bajaj has it, Lakshmi Mittal doesn’t; do you need an MBA?
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First Published: Thu, Sep 11 2008. 11 25 PM IST

Photos: Harikrishna Katragadda/ Mint
Photos: Harikrishna Katragadda/ Mint
Updated: Fri, Sep 12 2008. 02 23 PM IST
Bangalore: At the age of 30, Nisha Gopinath handles human resources for some 540 employees at a multinational firm in Bangalore. She credits her success to her management degree from the Rajagiri Institute of Management in Kochi.
“I wouldn’t have reached where I am today without my MBA (master’s in business administration),” says the 2000 graduate, citing courses that helped her put together compensation surveys and handle sexual harassment cases.
Meanwhile, Vinod Menon, armed with just an engineering degree, has risen through the ranks in another large multinational company, overseeing a group of 63 people at the age of 33. “I haven’t faced any roadblocks so far just because I don’t have an MBA… Sheer hard work has brought me to the middle-management level,” says the graduate of the National Institute of Technology, Kozhikode.
Which path should you take?
Photos: Harikrishna Katragadda/ Mint
More than 1,400 management schools in India churn out about 140,000 MBA graduates every year. But gauging by the way young people are climbing the corporate ladder, there seem to be plenty without an MBA degree.
Consider even the best-known of names. Bill Gates, founder of technology giant Microsoft Corp., who left Harvard University. Steel giant Lakshmi Mittal holds only a bachelor’s degree in commerce. N.R. Narayana Murthy, founder of India’s second largest information technology (IT) services company, Infosys Technologies Ltd, is an engineer by qualification.
But then, there are Louis V. Gerstner, credited with turning around IT giant International Business Machines Corp., and Rahul Bajaj, chairman of Bajaj Auto Ltd—both from Harvard Business School (HBS). Jerry Rao, founder of Mphasis Ltd, an IT firm acquired by Texas-based Electronic Data Systems Corp., graduated from the Indian Institute of Management, Ahmedabad (IIM-A).
So, do you need an MBA to start or eventually run a company?
No, is the short answer. But probe a little deeper, and those in business seem to agree that it definitely helps.
The pros
None of the seven founders of Infosys Technologies has an MBA—yet even current chief executive and managing director S. Gopalakrishnan says it helps. “It is not necessary to have an MBA degree to start a company or run a large organization. But an MBA definitely helps a person understand ‘how a business works’ faster, through theoretical and practical learning across different business aspects.”
What’s important, experts say, is who you are when you get to business school—and who you want to be afterwards.
Photos: Daniel Acker/Bloomberg
According to Subroto Bagchi, co-founder of IT services firm MindTree Ltd, it is not an MBA that matters, but what one learns from it. Not that he speaks from academic experience.
“It is true that I do not have an MBA degree and I was lucky to learn on the job,” says the political science graduate from Utkal University in Bhubaneswar. “I know a great many CEOs and other top functionaries who did benefit from their education. The key issue is not MBA. The key issue is what you learn from it.”
A handful of experts advise getting two-three years of work experience before going to business school. “The best way to do an MBA is after two-three years of work experience, since the person would have understood some things and his mind is open to learning new things,” says Ranjan Acharya, senior vice-president, corporate human resources development, at Wipro Ltd, which makes a range of consumer products and runs the country’s third largest information technology services business.
For top executives, an MBA has become almost a must-do, says Tarun Khanna, Jorge Paulo Lemann professor at HBS, who has expertise in businesses in emerging markets. “In the busy tumultuous world, with so many new ideas bubbling up all the time, I cannot see the downside to a time of reflection,” he says.
Besides time for reflection, what tangible skills does an MBA provide?
Take the example of R. Subramanian, the man behind the country’s largest discount retailer Subhiksha, run by Subhiksha Trading Services Ltd. He is an engineer with degrees from the Indian Institute of Technology, Madras, and IIM-A. “Being from a top-rung school gives a lot of credibility,” says Subramanian. And, he adds, a lot of skills.
For him, one of the major takeaways from business school was complete and unemotional objectivity with complete attention to facts and logic.
Subramanian left a cushy banker’s job to start Subhiksha as a single-store entity in south Chennai in 1997. Today, the chain has some 1,000 outlets across 90 cities.
Srini Vudayagiri also credits his MBA, from IIM-A in 1991, for his success. With 17 years experience in the private equity business, Vudayagiri is managing director for the Indian arm of California-based private equity player Lightspeed Venture Partners.
He treasures the network of relationships he can access through strong alumni, which are active both online and offline. “If I want to speak to a senior executive in a corporate, I reach out to an alumnus in the company instead of cold calling him,” says Vudayagiri.
A compromise
One compromise that even successful managers such as Menon are considering is the one-year or executive MBA. “Everyone in the top management (in my company) has some sort of postgraduate degree,” he says.
He will have quite a suite to choose from. Taking after the Indian School of Business in Hyderabad, many schools—such as IIM-A, IIM Bangalore, IIM Lucknow, IIM Indore, IIM Calcutta, Mumbai-based SP Jain Institute of Management and Research and the four-year-old Great Lakes Institute of Management, Chennai—have started one-year programmes for students with work experience. And candidates right from their 20s to their 40s, from backgrounds as varied as medicine and the armed forces, are taking these courses.
The cons
Still, a stiff dose of a management course from even the country’s premier business schools does not guarantee a berth in the top echelons of the corporate world.
There has also been concern that business schools churn out MBA graduates, not leaders. “Two out of 10 IIM pass-outs have unimpressive track records,” says Mahalingam C., executive vice-president and chief people officer at the Indian arm of outsourced product development firm Symphony Services Corp. “Even after 15-20 years of experience, they are stuck in middle-management jobs.”
Sudhanshu Bhusan, professor of higher education at New Delhi-based National University of Educational Planning and Administration, a government education planning body, says, “Management schools have not backed up teaching with sufficient research and understanding of the markets.”
These schools need good global research to be done on varied markets such as that of the European Union and Latin America.
Experts advise MBA aspirants to seek a multicultural environment, with students drawn from 30-50 countries “to sensitize them to varied cultures”, says Bhusan.
A good business school will not teach the current practices in the industry; it will, rather, lead its students to what the future holds and how businesses must adapt to the changes.
“Teaching in a majority of business schools is confined to teaching current practices,” says S. Neelamegham, president of New Delhi-based private business school NIILM Centre for Management Studies.
Formerly dean of New Delhi-based Faculty of Management Studies, Neelamegham says: “While research is being done in the top schools, it is not to the extent that is expected from them. There is no new knowledge or great innovation.”
And so, students who pursue MBA programmes in India are generally advised that innovation will be left to them.
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First Published: Thu, Sep 11 2008. 11 25 PM IST