Why do so many Indians pursue an MBA?

Question

Hey all--this post definitely betrays my ignorance, but I am really curious to understand: why do so many Indians want to get an MBA?

It's crudely stated and perhaps not even an accurate question. So I guess my first question is: do equal percentages of college-educated Americans and college-educated Indians apply for MBAs? If so, then since there are about three times as many Indians in the world, the number of applicants would obviously be higher. Though if more people in the US are college-educated then perhaps it is more valued in India?

According to  this article , 28.5% of adult US Americans have a BA. I can't find comparable statistics for India in the US-centric web searches. Mostly because it keeps thinking I'm talking about American Indians/Native Americans. Anyone know?
 
The other side of the equation worth noting is that only a minute number of US Americans apply to India for an MBA whereas many Indians apply to non India-based programs. It would be interesting to see if US Americans who apply to ISB face easier odds of acceptance than their Indian counterparts.

As someone who is completely new to the MBA experience I am surprised by the sheer number of Indian candidates on the forums, but I don't have a demographic understanding of India to know if it's really a huge number percentage-wise. I guess I am also saying I don't even know what the real question is.

So assuming the common idea that more Indians than average want MBAs, what are the driving forces? (The same question could and should be asked of all of us in the US who are applying, and I'm guessing there are many different answers). What are the benefits of getting an MBA within India and are they different from the benefits people of other nationalities enjoy?

Something to discuss while we wait during R1...weigh in!

niksworth · Answer

I am grossly generalizing here. There are exceptions obviously.

There are some common misconceptions - i.e. India produces mostly engineers through college education. According to a study by World Bank (figures of 2003-04, so slightly dated but indicative) 
1) There are 10,000 colleges of technical education, 3,000 colleges of professional education and 360 universities.
2) Total yearly enrollment of around 11.2 million in college education, of which 70% is in general degrees (arts, science, commerce) while only 10% is in professional degrees (disproportionately engineers, some doctors). Rest 10% get diplomas in various disciplines.

However, unsurprisingly, the best paying jobs are available through professional degrees - primarily engineering. So the general trend is that those at the top of the class in their high school end up targeting engineering programs. A huge chunk of India's engineering graduates (perhaps a 100,000 every year?) are employed in IT companies. (except for IITs that have much more diversified recruiting). This has been brought about by the IT revolution of the 90s and the 00s.

On starting work in IT, people soon become bored/disillusioned with the job (I'm not sure of this but have heard such things). They look for an avenue to change industry. This is where an MBA comes in. Almost all attempt the CAT (entrance examination for MBA programs in India). Few get into IIMs (most prestigious) while others decide whether to enroll in a lower ranked program in India or to wait another year and try again. The thing with most MBA programs in India is that they do not value work experience that much (ISB is an exception). Thus if you have been working for 3-4 years and yet not enrolled in an Indian MBA program, you wouldn't want to sit in a class full of inexperienced folks. An MBA from abroad is the next logical option.

So to answer your question - why are there so many Indians pursuing an MBA and why abroad?
There are so many Indians in general. The Indian industry with better paying jobs is IT. The IT folks are ambitious. The IT job is boring. The need to change industry is acute. Work experience is not valued much in Indian programs.

jumsumtak · Answer

You sir, deserve a Kudos for this! :-D

There are enough people (read Indians) on this forum who will be more than willing to share their thoughts on this. I'll chip in with a few points: Whatever Niksworth mentioned is true to a very large extent. Those are the first few reasons that will come to anyone's mind if you ask this question. Apart from those, 1.) I'm not too convinced with the quality of education as well. Quality here is subjective and obviously includes the quality of the class. When the best institutes in the country have nearly 70% (or more) people without any sort of work experience, many choose not to apply. A derived point from this is: the selection criteria. There are no essays. Your resume does not weigh as much. Your career goals don't way AS much. What is of absolute importance is that you have scored a 99.XX percentile in your Common Admissions Test ( approx. 250,000 sit for it each year) and you have been consistent through out your academic career (right from high school). So essentially, a McK guy with a 96 percentile on CAT cannot get into a top 10 school. (Its a different issue that a McK guy will almost always take GMAT and apply to foreign B schools and McK recruits from like 3-4 UG schools in India, and that too 3-4 people from each class). Similarly if you screwed one of your high school grades you are pretty much out of the race for top schools and this because there would be a thousand others who did not. If I were in the ad com of a B school in India, I would probably add a few more criteria but still wont be able to accommodate a 96 percentile . There is absolutely no scope of screwing your academics. Hence, you fill the class with people from essentially similar people, who are very good in academics but not as good in other areas. Everything is Cut-throat. Just to give a feel of it: The high school (XIIth) grades are out of 500 (5 subjects 100 marks each). Each school in Delhi University releases cut off lists to fill in the batch. Commerce and Economics are the most sought after courses. Can you guess the first list cut-off for the top college. 100%. I can't even explain what that means. The 3rd cut-off list for that college goes up to 98 % or so (these are absolute marks and not percentiles). 2.) India is a developing country and there are a lot of fields that are relatively unexplored. Let me take a leap here and say for example VC industry is not spread AS much as in some of the developed countries. People are more informed now and want to explore. 3.) There is no clear career progression. You won't see many people, as in US, who join a MC or an I banking firm, right after their UG and progress from analyst through to associate. Those are very very elite position apparently. "There are so many Indians in general". Hence there are so many in IT, so many in Engineers, and SO many MBAs out there. Hence, no recruiter is willing to take risks and give jobs to UGs . In fact, this even dilutes the work MBAs do in India. Which is one more reason why people want to go out. The quality of work is definitely better (according to me). Again, keeping all other parameters same, if I were a recruiter I would probably hire someone with a business degree. I could list down a lot of them. But essentially the crux is "there are a lot of Indians in general". They face an equally tough task to get through a B school in India as they do for a school in US. P.S: I'm sure there will be people who will differ from the points above. This is what I feel and I'm sure there are a 1000 other reasons.

Vips0000 · Answer

Few responses, provided with a very narrow vision, have forced me to put forward my thoughts as well.

I’ll respond first by posing a few questions and then would get down into answering.
First and foremost - "there are too many Indians" and thus heavy volume of Indian applicants! Please note- there are even more people in China however you don’t find as many Chinese on such MBA forums? What is the reason?
Second, the questions raised on quality of education and criteria of CAT- What value is of an essay or resume edited by an admission consultant instead of the applicant himself? Probably a better candidate may not be able to ‘showcase’ himself as well as another candidate, who gets services from such consultants, may. Would that be justifiable in your opinion? Or at the end you would question this criteria as well?

Any institute decides what kind of students it wants in its classes/campus and on what criteria to judge candidates. And this in no way defines the quality of education in that institute. What matters is what goes inside classroom and on campus.
If you look at HBS or any other prestigious college, you’d find that average GMAT range is higher than other tier 2 colleges. Similarly – IIMs look for best candidates with ‘good’ percentile on CAT and then give them opportunity to showcase their potential in GD and PI. If you've such a large pool to pick from, you've to formulate a strategy on 'how to pick'! period!

You cannot guarantee admission into IIMs with higher score on CAT as you cannot guarantee admission into HBS only based on GMAT score. In short an McK guy can definitely get into one of the ‘TOP’ MBA institutes in India.

Now coming back to the original question- Why so many Indians on this forum and generally doing MBA.
Career progression and better opportunities post MBA - This is a common, ‘high level’ reason for anyone on the planet to do an MBA.

Just that, when you compare number of Indians applying for MBA – you are looking only at total number or presence on such forums, while in reality this is just a very small (arguably infinitesimal) fraction of Indian population. But this doesn’t mean I support large population means large number of applicants argument! I would rather put it in this way “large population of ‘eligible’ and 'informed' candidates means large number of applicants".

While quality of top Indian institutes imparting MBA education cannot be questioned, it is a fact that there is absolutely no MBA institute in India (barring a few avenues introduced off late) for a person with higher work ex and therefore anyone realizing a need for MBA ‘late’ in their career HAS to go to international schools to get the quality education. Also, anyone not able to get through in his/her dream colleges in India has to take this route to fulfill his/her aspirations.

Hope this answers some of your questions and, in addition, gives you some questions to ponder upon!

jumsumtak · Answer

I agree to a lot of your points and I mentioned quite a few times in my post that this opinion is subjective and there will definitely be people who will come up against it. I respect your opinion and also do not feel any reason to argue/debate on this. But, just to clarify what I meant on a couple of points that you mentioned in your post: 1.) By quality I meant the quality of the class. True that admissions consultants do write essays and that skews the process. But at the end of the day there is a massive significance on your work profile and the choices you have made in the past, quite unlike top institutes in India. 2.) I agree the institutes have the right to pick their own strategy. That is where I mentioned the high competition for an admit to even Indian schools. 3.) about the McK guy: Of course he can get into a top school. (but not with a 96 percentile). He might escape a 96 percentile (730/40?) on GMAT. I'm sure you would agree CAT is not just a check point as GMAT is. Again it comes down to the criteria that we both mentioned. And obviously schools are entitled to formulate the strategy because of such a large pool. Probably this was why I was hesitant to write my opinions in the first place. Because one cannot discuss all the aspects in one post and however much I try to pacify my points/put caveats there will always be people who will differ. But I think in essence we are talking the same thing

Best

niksworth · Answer

I know we have a tendency to be become argumentative. (Amartya Sen wrote a book on this!) Still, rather than characterizing people's vision as narrow or wide, I would request that you take their opinions here just as what they are - their opinions.

To answer your questions -

Comfort with the English language should be a major factor. In my job, I have interacted with some Chinese - almost all needed interpreters. I would say that if you draw a normal distribution curve of English speaking ability of Indians and that of Chinese (if such a curve can ever be drawn!), the Indians would be farther to the right. I may be wrong but scores of call centres in India and lack of those in China are a testimony to this assertion. There may be some socio-cultural reasons as well but I'm not informed enough to make a comment.

1) You must remember that a huge number of applicants (including me) haven't availed services of admission consultants and have worked hard to present the best picture of themselves through the very subjective admissions process. Even those who do use them need to work equally hard.
2) If you think that 'showcasing' something is irrelevant or misleading, well you have an entire business function called 'marketing' against you.
3) Please remember that wherever there is need, consultancy will be present. Someone might not need them, but others might.

Vips0000 · Answer

Probably in a hurry to respond you missed the enitre post.

The points that you have quoted and responded to have been questioned in my post! and you would find the answers to those if you read on. I've questioned why chinese despite being more in numbers are not seen on the forefront of MBA race and only difference is I dint put it so crudely as you did that chinese cant speak as good english as Indians can. And also, I've not questioned sanity or purpose of consulting services for resume or essay rather used it as a counter example to highlight the fact that each institute has its own criteria. Its also worth mentioning that purpose of post was not argument,as you pointed out, but to highlight certain aspects that were not considered. Hope it does clarify!

mappleby · Answer

If this is true I would never see the value in attending one of these MBA programs. Even at 4 years of experience you've only seen a small part of the actual business world. What could your classmates possible contribute to a discussion if the vast majority of them haven't even had a job?

jumsumtak · Answer

That is a major deterrent. Also, the schools we are talking about have minimal international representation. Though, there are exchange programs in most of them.

There was some chatter about ISB as well. ISB is US-esque in its application process and a 1 year course. The average age there is around 25. 
Living very close to it, having worked with ISB alumni and having attended a couple of classes, I can definitely vouch for it. The faculty is great, it has tie-ups with a lot of good schools and because it is a relatively new facility so the infrastructure is pretty awesome.

I heard there is a pro golfer and a Japanese monk, among others who are pursuing a course this year.

machichi · Answer

Perhaps this has been debated elsewhere as well, but what is the perception in India of business schools in India (e.g. ISB) vs. US schools (e.g. Harvard)? I'm wondering if when looking to hire, firms in India are more or less enthusiastic about certain business schools. Once again, I realize that this is asking to generalize and stereotype. But one thing I can say about the US for example is that Harvard is going to get you in the door in any field. It may not get you the job (the interview really makes or breaks for that), but it certainly is going to help!

I do want to point out that admissions consultants may make parts of the process seem unfair, but they can't work miracles. They don't turn lead into gold, the just polish it so it shines. At the end of the day (maybe I'm naive), I feel like the resume is the most important part. What have you accomplished? What kind of promotions have you received? What kind of coherent work background and future vision do you have for yourself?

Do Indian Business Schools use experiential learning opportunities, group projects, and other such collaborative activities? Or is the focus really on analyzing data and thinking independently? I would definitely be frustrated by classmates without practical experience to speak to and contribute.

jumsumtak · Answer

Top B Schools are extremely hard to get in. Be it in US or in India. It is really difficult to stand out in either of the selection criteria. Part of the reason Harvard is great is because of its exceptional intake (co-relation vs causation) and the recruitment opportunities. Same is here in India as well. Recruitment companies flock the top 5-10 colleges and hire the best talent available. As H opens door to almost any field, so do topmost colleges in India. Recruitment companies are NOT less enthusiastic. There will always be demand for the classes that get out of the top-5 and these batches are pretty well placed.
The point is, a degree at Harvard will open doors in almost any country (because of its global brand name) I'm not sure if an Indian B school will do that. International placements are on the lower end, but again, choosing a school's geography is probably one of the most important criteria while considering your MBA. So one definitely need to weigh his/her options.

Agree to the consultant point. That's what I pointed out, your resume and your work experience holds a very high value.

Indian B schools do all that. There are a lot of initiatives, some of them inherited from their western counterparts and some invented in-house, that make these schools stand out. I would like to point out though there is no concept of a great "fit", at least culturally. Most of the schools have similar cultures, so it is best to land up as high as possible on the ranking scale.

Probably, I have helped here in fueling the lack of exp. debate. Let me explain it out a bit. (again my perspective)

It is the way this cycle has been. 
As weird that line may sound it is actually the truth. People are ready to take the plunge right after their UGs and B schools are ready to accept them. As odd it may seem to someone from US, some Indians might feel odd about how the western schools function. 
Imagine, not just you, or 5 or 7 but majority of people in business schools straight out of their UG. and then repeat that cycle year in year out. It does not seem that odd then. A lot of people right after their UG start to apply to B schools instead of finding a job. It is the way how education is structured and carried forward. and it takes a lot of time to change. There are obviously pros and cons and preferences.

Then there are executive programs, like SP Jain/IIM X's where work experience ranges from 26-31sh. (majority). You wont really compare it to exec program in US, where you require obviously more exp. (ISB is an exception: pretty similar to western programs)

Again, it is the cycle that has been established and the way education is structured in India. It definitely does not means the 'quality' of education is bad.

westsidah408 · Answer

Before I say anything, a caveat: I am ethnically Indian, though born and raised in a different country. I did study in a boarding school in India for a number of years and so have had some perspective on the general Indian educational thought process.

I have had so many Indian friends go to MBA programs that require 0 work exp, or decided to forget about the MBA and do some other Master's degree abroad right out of UG. I generally see this to be because Indians, as a culture (stereotype here) feel the need to get higher degrees, before obtaining any work experience. After I had taken the GMAT, my grandparents (as well as many adult relatives with an Indian mindset) have time and again asked me why I am not pursuing a Master's degree yet. When I explain that I have only been working for a few years, that I want to pursue an MBA (hopefully in the US) and that the requirements are for a more complete profile and not just one singular test, they didn't really understand why. They cited names of many family friends or relatives who they said didn't need to do those things and have already come back with Master's degrees. They then asked my why I am wasting my time and not out there studying for a higher degree.

My point is this: to those who don't know, a Master's is a Master's. They simply see it as a "must-do" to get ahead. They often feel that taking the best route may be to do it without getting any experience. This is a cultural aspect and will change, with time.

wouldbecrazy · Answer

Very interesting discussion.

First of all, don't assess the ground by online forums. Chinese people prefer Chinese websites and they are very active in those websites. The point is both Indians and Chinese eclipse the MBA class in any global school. The slight difference is, Indian generally prefer US and UK and very recently few other countries like AU/SG, whereas Chinese are spread in many countries. I have seen some EU schools with Chinese student but no Indian student as yet.

The reason is not so complicated. Out of every 5 persons in the earth who are moving around, probably 4 will be either an Indian or a Chinese. I said mobile people.

Secondly, both India and China are still developing and there are just few 'good' career options available. For example, in India IT and in China Manufacturing. The issue is, both the industries are full of equally competent people. If you want to move ahead, you either need connection or you need some differentiator. MBA is perceived as a differentiator or a passport to go to better location, out of the mess of these two countries.

Indian people understands that when you are in a job, it is not easy to stop and rejoin a school for various socioeconomic reasons. So most of the students try to complete their studies at a stretch, non-stop. Whether that is a good idea for MBA is a different question, in that matter even a 4-5 years of experience in IT does not really qualify as an experience!! So most of the students appear on various MBA entrance tests. Due to sheer number of students, only a lucky few crack it and join the MBA schools immediately after their graduation.

Some people who could not manage to get a seat prepare the whole year and appear for the next year.

Then there are people, who are mostly 'learned' (thats a major issue in India, most of the students are clueless!!) work for few years and then directly appear for GMAT and aim for overseas school. The reason is very simple, their world is now expanded beyond the boundary of India and they know the importance of a great mix in the class.

Then finally there is a surge of IT people. One main reason is, IT is a commodity now, seniority or experience does not count too much as that does not really add any value. Coding done by a 2 years fellow and 10 years fellow does not differ significantly. It is a sense of vacuum and people want to move out to some field where their experience adds value. Generally IT people are exceptionally good at Quantitative and they score highly in GMAT, even though sometime their verbal is too bad. Even after discounting their GMAT score by 20-40, these people are still competitive. So you find class full of IT people.

The bottomline is, there are too many equally qualified Indians and hence the motivate one want to differentiate. MBA is probably the easiest way to differentiate. Whereas for rest of the world, a graduate degree is considered sufficient.

peterparker123 · Answer

Because in India, people live their lives on myths and perception. They think that you need to have brains to get into MIT etc, and in our nation, brainy means those who get high marks in schools. And these tests are designed on a pattern to identify the questions, which is known as rote learning. That's why you will see many Indians cracking 760 marks in GMAT, as Indians are very good in memorizing the facts, even though, they will never question that what is GMAT testing. And this is how we produce Engineers, just by making them read books. Yes, In India, we are made to read books on C,C++,Java, but we don't know how to apply them. Unlike USA, where Engineers are given field trip and exposure, this does not happen in India. And many of the engineers end up frustrated, because they are put up in system maintenance job once they get job. Also,doing an MBA from an ivy league college gives a change to get a better pay package. Actually, people in India flock to MBA because Indians don't have time and patience and fear working in challenging conditions.

apoorv601 · Answer

I just wanted to post a reply on this very interesting question. 
I have read the posts..and discussion about Indian vs China is also quite intriguing. I have given GMAT recently in Hong Kong and have done Msc here. My classmates were mostly Chinese. 
The reason y so many Indian apply for MBA can be summed up as under:-
1) In India salaries are low, even in engineering some of starting salaries go as low as $250 a month. If you want even enough salary for a decent you have to be great at academics and attain degrees from good colleges. That means cut-throat competition but many Indians are not able to get through as there are simply so many and there are only handful of colleges. So an average Indian learns the rule of Darwin - The fittest survives. For this average Indian there are only two options now - either a normal career with low salary and slow growth or a MBA with good career and salary prospects. 
2) Indians maybe because of the environment described above or naturally are good at exams. See the average GMAT and other exam scores of Indians vs non-Indians. This leads to their believing that they deserve good salary and job because of their talents
3) The family culture in India is too focused on achievement and specially in academic field. People always is a comparison with a peer who is doing so well in exams. That brings dissatisfaction and frustration in Indians.
4) The conditions in India are too bad. Bad infrastructure, not clean, crime, high temperature, etc. People simply want to move out of the country and settle abroad.

China also faces a large population problem but the reasons for not many Chinese going out for MBA are:-
1) They have a very good environment and infrastructure. 
2) Avg. Chinese English is not as good
3) GMAT scores are not that good - I presume - pardon me if i am wrong 
4) Many opportunities in there own country 
5) Salary levels in China is comparable to the West. - Also many options to earn money - Many Chinese can even buy many flats just by profits from the stock market. 
6) There specialty is Manufacturing which produces so many jobs in the country. 
7) Good govt. support for starting up businesses - Many people don't have univ. degrees but are doing business.

Comments are welcome

Jezza · Answer

Hey folk, you are definitely incorrect from point 3 to 7, not even close.
As a Chinese who has been taking education around the globe, and who consider both English and Chinese native language, I can decisively tell you that:
1. This is true, "chasedream.com" is the corresponding Chinese website of Gmatclub, almost exactly the same format and structure. Also a side note, most Chinese dislike and feel extremely uncomfortable to browse English websites/forums or connect with foreigners via overseas social network channel, not to mention most websites are blocked in China.
2. This is true, most Chinese are far beyond "not as good" with English, they are horrible with English in general. Why? because if you attempt to use English in a Chinese environment, you will be marginalized if not booted from that cluster. But don't be fooled! Chinese are super good at doing exams, even if you ask Chinese students to take an exam in a language they have never learned, they can still manage to score better than most native speakers of that language, with only half year of study. 
3. GMAT scores are near perfect among Chinese students. If you are a indigenous Chinese without international experience, you must score over 720 to be somewhere close to competitive among what we (they?) categorize as the s16 b-schools, the schools behind Wharton, HBS, Kellogg, Stanford etc. If you want to be competitive for Ivey league, prepare for 750+ at least!
4. While there are opportunities in China, most jobs are super low-paid. Because of the oversupply of labor force in China, you will only be employed at administrative functions if you only have undergrad degree, it doesn't matter from which school you earned the degree, even from Stanford. That's just life.... This explains why so many Chinese go pursue further education, they simply can't find jobs in China, unless you opt for such occupation as restaurant servants, floor sweeper etc. I know so many guys who graduated from rank 50-100 universities performing food delivery jobs here.... Shocking right? blame chairman MAO..
5. No, you are delusional. on average, the house rent in main cities (Shanghai, Beijing) alone accounts for 50% of new graduates' income, if not more. And also 80% of individual participants lose in the Chinese stock market, local capital markets are heavily manipulated.
6. You are right, but discrimination against low-status jobs is the most severe in China. these jobs get minimal pay and require workers to work 60+ hours per week at least. If you work in these occupations, your family will be shameful of you. So many factories force workers to work more than 14 hours per day, but still millions of people are competing for these jobs. again, blame chairman Mao.
7. Haha, that's funny. you need support from you dad, not from the gov. If your dad is not a rich or work in a senior position within the gov system, you get nothing. All Chinese have acquiesced to this poignant fact from long ago.

I am open for more info.

Why do so many Indians pursue an MBA?

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