Over the last month, B-schoolers have received seemingly contradictory news. Some articles bemoan the ‘crisis’ facing them, others talk up expected placements. This is the season when candidates start shortlisting B-schools to apply to, and companies start the process of recruitment of students. So are B-schools really doing badly? Is a B-school degree still relevant? What is the reality? How to sift reliably good news from the bad? The depressing view on B-schools was presented in an ASSOCHAM report that talks about B-schools closing down and difficulties students face in finding placement. It suggests a dual cause for this. Issues on the demand side, with economic slowdown and consequent reduction in hiring; and supply side issues like oversupply of management graduates, and inadequacies in the education of these graduates.
An ET article says placements in top B-schools are likely to be good. Pre-placement offers are very strong this year, and the economy is looking up. I believe the report refers primarily to 2013 figures. The mood is more upbeat this year; placements should be better too. And Business Standard, again quoting ASSOCHAM, said 2013 had a capacity of 4,88,000 seats, and many B-schools closed. The reality is, there are too many seats, and too many graduates chasing too few jobs. All this is the inevitable downside of a boom. B-schools came to be seen as a “good business”, and many were set up with basic infrastructure, inadequate teaching facilities and little industry linkage. Such institutes only deliver the MBA “tag”. Recruiters do not hire a “tag”, but a potential manager. They have a “noise” problem—too many graduates, too many institutes, and of such uneven calibre that it is impossible to grant a degree any sort of face-value, so to speak. They naturally endeavour to reduce noise—grading institutes, offering different job profiles and starting salaries, and staying with familiar institutes.