Is an MBA worth it in 2024?

By Nikhil Sawhney

The Master of Business Administration (MBA) has been declared dead many times, but it has proved to be indestructible. Companies continue to queue up at B-schools, even grudgingly, and students continue to raise ever larger loans to buy the MBA ticket to corporate divinity. The MBA still signals differentiation from the commodity graduation, and it still improves the caste of the job or promotion seeker in the eyes of the HR.

But the question mark on the traditional MBA is growing in the post-industrial economy. With enterprises becoming increasingly dependent on rapid innovation and focus shifts, their management needs are less focused on solid administration and more on imagination and chutzpah. Tech majors, start-ups and social enterprises overshadow the industrial giants that shaped MBA for the past hundred years.

Still, few large enterprises, including technology unicorns, can’t entirely dispense with MBAs. In fact, start-ups are finding out that they need MBAs to put some discipline into operations and growth. Students and executives know that they need the MBA degree to get fatter pay, corner rooms, and a higher perch in the organisational tree.

The typical pitch for an MBA programme includes not just learning management essentials – finance, accounting, marketing, statistics, HR – but also opportunities for a plum placement, a bump in pay and rank, a mutual-help network of future leaders, and entry into the powerful alumni club. However, MBA is hard work, a big expense, and a long commitment, and the pot of gold at the end of the rainbow is not assured for every graduate.

Media excitement around the highest salaries offered during campus placements without citing the pre-existing experience and expertise of the graduate hides the sobering reality of the average salaries offered. In recent years, the top salaries for campus recruited MBAs at top B-schools has been in excess of Rs 1 crore a year, but the average has been below Rs 40 lakh. At the middling B-schools, the average placement salary has been in the wide range of Rs 10-30 lakh. The extraordinary peak placement salaries skew the average. It is a winner take all game.

When considering whether to be an MBA or not, one must look at the relevance of MBA to one’s temperament, sector, and role. Not everybody enjoys general management, and some are better off being experts in particular knowledge and skills. Not every sector requires or rewards MBA too much. 

While consulting, finance, and consumer goods companies survive on MBAs, technology research or social enterprises have comparatively less reliance on MBAs for the core activity. Students must be clear about what they would do with an MBA, and what an MBA could do for them, before they commit precious time, money, and emotions. Much of the disillusionment with MBA comes from seeing it as a golden ticket.

Not all MBAs are equal. There is a clear and obvious pyramid of B-schools and an MBA is seen through the lens of the institute’s brand rather than the programme’s content or cost alone. During the past couple of decades, MBA has become a staple of all kinds of institutes and in the lower, larger half of the market pyramid, it has become a commodity. For many employers, MBA is the new BA. For an MBA to have value in the market, it must be done from institutes with management pedigree and industry connections.

The online MBA has gained traction since Covid-19 forced all B-schools online. The affordable, flexible online MBA is a great option for the budget- and time-constrained students, especially those who are looking to add shine to their CV and pitch for promotions.

Besides where one gets the MBA from, the variant of MBA also matters. While the general-purpose MBA remains the stock-in-trade, the inclusion of new-age elements and expertise in the curriculum can make an MBA valuable.

Digital technologies are seeping deep into business and management, and MBAs need to know how to work with data and algorithms to manage and create. They need to know how to work with physical, digital, and hybrid business models. Management is increasingly becoming less about getting things done by equipment and workers, and more about making things happen using technological knowledge and skills.

In fact, some of the core management concepts of management are undergoing fundamental change in the new economy. In the 20th century, management was about extracting the most out of factories, materials, and workers in the least time and at the least cost. 

The law of diminishing returns seemed immutable. Today, the cost of making an additional unit is nearly zero and one can offer things for free to the user. The digital assets suffer obsolescence rather than depreciation. The way of thinking about business and management has been turned on its head by the revolution in digital technologies and business models.

Today, the question is not whether to be an MBA or not, rather it is what kind of MBA one needs to be and from what kind of institute.

The author is president, All India Management Association (AIMA), and vice-chairman & managing director, Triveni Turbine Ltd.

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