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You are here: Home / CAT Preparation Strategy / Should I Do an MBA? Is it Worthwhile?

Should I Do an MBA? Is it Worthwhile?6 min read

August 29, 2019 By Rajesh 6 min read

Is MBA Worthwhile?

Is it worthwhile doing an MBA? Does the value proposition work?

Under what circumstances should I not do an MBA?

I recently got this eternal question via email from one of our students.

Student X, with 3 years’ experience in IT currently earns Rs. 6L per annum. He foresees the salary becoming 7.5L in two years’ time, perhaps higher if he switches jobs. In these two years, he can complete an MBA from college ranked in the 21-40 range in India spending ~12L in the process. So at the end of two years student X will run a deficit of 12L where a guy who skips this MBA rigmarole will be adding around 8L to his tally; (keeping aside the nuances of taking the examination and all other procedures that go with it)

In all likelihood, he will end up with a job in the 10-12L range at the end of two years. Is this worth it? Is it worthwhile preparing for CAT?

The above question becomes even more complicated if one has average/below average acads because that makes getting into the top 10 even tougher. So, the dream looks further away.

This is an elaborate question but a crucial one that faces a majority of aspirants. And straightaway, I can confess that I have no good answer to this. Let us see if we can paint an overall picture

The salary equation is spot on

If one does an MBA, he looks at a loan in the range of 12L (it can be far higher); whereas savings in job can be in the ballpark of 8L if one is in a reasonable job. So, you are down 20L in comparison straightaway. If the salary premium due to MBA is going to be in the ballpark of 2L, this is hardly meaningful. Post MBA salaries are also mildly inflated in the media with joining bonuses and all kinds of other nonsense being padded on to these.

As of 2017-18, the average salary for one who graduates from colleges ranked in the 21-40 range is in the ballpark of 10L-12L. No one in their right minds would pay 16-18L for someone who is nowhere close to being in a revenue-generating role.

So, where does this leave us?

Consider MBAs that are less expensive

The IITs, FMS, DU, JBIMS are good examples of colleges that have much lesser fees. Take them into consideration. The revenue end of this deal is heavily dependent on the economy; the cost end is in your hands.

So why do students want to join an MBA?

Around 2000 BC there was a guy who told peasants struggling under a landlord that he could take them on a hit-or-miss expedition around the world that had a 10% likelihood of success – success being defined chiefly in terms of returning alive. Quite a few signed up for this trip. Ever since that day it has been clear that not liking what you do currently can be a huge motivation for people. This is the primary premise of management education.

Two types of people want to do MBA. 1) Guys who hate their current jobs and 2) Guys born to well-off parents who hate their current job. If you belong to the latter group, you have just wasted time reading all this. Notwithstanding modern-day interview answers, all of us know that the number 1 reason for wanting to do an MBA is not liking the current job.

So, is an MBA worthwhile or useless?

Of course not. It helps you write long articles on why an MBA is worthwhile even while you are building a strong case for MBA’s uselessness. Jokes apart, an MBA from a good college adds tremendous value. The intangibles of interacting with a good peer group, having access to an alumni network and having a brand on your CV are vital. The clear financial pay-off is also healthy. The whole equation changes if the exit salary were to be 15L-18L which is what MBA from a good college can get you.

Do not be pushed into selecting a middling college because you hate your current job. Do not fall for the fancy value of an MBA tag if the math does not work out. (If someone else can foot the bill, the equation is very different). Do not burn your bridges at workplace. Do not believe that an MBA tag will automatically take you places. Most organizations do not give that much bhaav to MBA from a college outside the top 20.

Is preparing for CAT not worthwhile then?

Now, this is the part where my answer is unambiguous. Preparing for CAT is most certainly a good use of time. If you crack CAT, end with college ranked 21, do the math and decline to join it; that is still a meaningful experience. CAT preparation makes comfortable with numbers, shapes the way you think, builds in you a reading habit and generally makes you sharper. If you do it well, solid CAT preparation is of value even if you do not take CAT. It is a fabulous exercise of the mind that will hold you in good stead.

Importantly, not going for CAT is akin to giving up on an aspiration, on a dream. As an entrepreneur, I can tell you that the dream of making a business work can take us through many quarters of iffy revenues.

Hope is a good thing - Shawshank Redemption
hope is a good thing!

If you crack CAT, get 94th percentile, end with an admit in college ranked 21, feel that it is not worth your while doing an MBA from this college and continue with your job it can be immense experience. For starters, you will have the joy and confidence of someone who chose to go on a journey even though the results carried uncertainty. You will probably also value your job more – after all, you turned down an MBA from a decent college for this.

The only certainties in life are death and taxes.

Death and Taxes

Preparing for an exam with no guaranteed outcome is a test of temperament. If you come through that unscathed, you will be richer for the experience. As the saying goes – Nothing ventured, nothing gained. Cynicism aside, you aspire to an MBA because you believe you can take on roles bigger than what your current job offers. The best way to prove it, perhaps would be by putting your head down and getting a fabulous CAT score.

Rajesh Balasubramanian takes the CAT every year and is a 4-time CAT 100 percentiler. He likes few things more than teaching Math and insists to this day that he is a better teacher than exam-taker.

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Comments

  1. Bivas pramanick says

    August 29, 2019 at 10:02 pm

    Thanks for such a great insight. It enlightened my thoughts about an MBA.

    Reply
  2. R says

    August 30, 2019 at 6:55 pm

    Focusing on the points why it happens to be that if you need a promotion or hike in you salary. Experience has to be consider why they considered degree.

    Reply
  3. Kanishk Raj says

    August 31, 2019 at 12:41 am

    I have just started my CAT preparation and i am willing to spend a major chunk of my remaining time for it but there is a major problem that my semester exams are due to be held on 6 November – 21 November , which means crucial 20 days of my preparation will be lost ..how should I approach this?

    Reply
    • Rajesh says

      September 1, 2019 at 7:46 pm

      Account for that gap from now. Whenever you get few minutes, keep revising formulae. Once in a while, even if you are dead tired, take up a mock and analyse it. Also, though the semester exam happens for about 20 days, there’s usually 6ish papers if I’m not wrong. Use time effectively. Best wishes.

      Reply
  4. Yuki says

    August 31, 2019 at 10:22 am

    Thanks a lot for such an in depth answer sir. Got an clear cut idea after going through your answer.

    Reply
  5. Arjun Roy says

    September 19, 2019 at 3:27 pm

    I would say MBA is a personal choice. If you can make it big in your career anyways, you do not need to do an MBA like the others. MBA can help some people acquire the necessary business skills like communication skills, team management skills, time management skills and leadership skills.

    Reply
  6. Vishakha Mehta says

    September 19, 2019 at 3:33 pm

    Rajesh, thanks for sharing this post explaining the benefits of doing an MBA. Many candidates are still confused about their choices regarding MBA and wonder whether they are going in the right direction. This post is sure to help make the right choices. Keep sharing such posts and helping candidates with their decisions.

    Reply
  7. Fasahat hussain says

    August 8, 2020 at 1:05 pm

    After reading this article I realized that doing MBA from iim is not sure to get your laddar instead, why MBA..? To gain new skills and management tactics you can do MBA from distance

    Reply
    • Rajesh says

      September 1, 2020 at 1:01 am

      Hi Fasahat, any education from a premier institute sends a positive signal about you. Moreover, an MBA from a premier institution also helps in your long term endeavours of starting a new enterprise, etc. because the network you gain in an IIM can never be matched by doing an MBA from some XYZ college.

      Reply

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