The MBA Caste System

October 25, 2004

There are two kinds of MBA institutes in India -- a handful from which you leave with a pedigree and the vast majority which offer just degrees. In the first category lie the IIMs, XLRI and, to a lesser extent, FMS and Bajaj -- the institutions which pioneered the concept of management education at a time when the IAS was a far more wanted career path.

In the second lies a vast array of institutes -- the good, the mediocre and the dubious. Evaluating the value proposition in the latter category is the daunting task faced by the majority of MBA aspirants.

The alumni is the brand

So what is it that sets the crème de la crème apart? Resources, faculty, infrastructure? That's just part of the story. By that reckoning, university departments like FMS and Bajaj should have been knocked off their pedestal a long time ago by newer entrants with deeper pockets. But 'pedigree', as the dictionary defines it, is a 'line of ancestors'. In the case of management education, ancestry has one simple definition -- the alumni.

The older institutes boast of alumni who joined the corporate world two-three decades ago and are at -- or very near -- the top today. The alumni effect is two-fold. At the obvious level, the companies they run ensure the alma mater is always on the recruitment radar. But, at a subtler level, alumni achievements rub off on the mother brand, and hence on the current crop of students.

In a sense, the alumni community IS the brand because they are the finished products, so to speak, of the MBA manufacturing process. And they form the one unique component in the matrix that cannot be duplicated by more recent institutes. That, in a nutshell, is the competitive advantage enjoyed by pedigree institutes which -- in the immediate future -- will remain unbeatable.

The 'merit-based' caste system

It's a modern form of the ancient caste system. Once you were born into it, now you arrive into it based on 'merit'. So, you have the 'Brahmin B schools' and some recruiters will visit only these schools, year after year, stating proudly, "We don't go to institutes below Bajaj." There is a certain prestige attached to such companies and this recruitment policy works simply because the number of jobs on offer is pretty small.

Hotshot consulting firms or investment banks essentially need to pick up a dozen fresh MBAs, at max. So it makes great sense to visit only the top schools. And there too, pick up the 'top' students. It's sad but true -- the Cats and Dogs phenomenon continues to hold sway. Despite the fact that all the folks who made it to an IIM-A beat the same odds, some ARE more equal than others.

The 'I schols' breed

This is the breed known as the 'I schols' -- a campus term for the top 20 students who are awarded 'industry scholarships'. The pecking order is swiftly and brutally established in the first few weeks on campus and usually holds good for the rest of the year. And whaddaya know? A large number of toppers are invariably IITians.

Partly because they are smart and hypercompetitive. But mostly, I think, because they're better equipped to face academic rigour and pressure. Four years at IIT, you've seen it all, done it all. The workload at an IIM, which hits the rest of the junta like a ton of bricks, is no big deal to an IIT grad.

A level playing field?

To offer a more level playing field, CVs sent to companies for summer placements at IIM-A now don't carry the student's CGPA. But the end result is still the same. Coveted recruiters look for the undergraduate background of the student and invariably shortlist those from IIT. IIM may be a brand name, but IIT-IIM is sone pe suhaga.

The IIT crowd will gleefully circulate this column in their e-groups, as further proof of their inherently superior status. Some, I expect, will feel compelled to write to me enumerating exactly how and why IITians really are a breed apart. Believe what you will. My point is: where does it end?

Reaping the benefits or paying the price?

We are reaping the benefits -- or paying the price -- for the actions of our ancestors. Company X has recruited a particular profile of candidates for the last 20 years and will thus continue to pick up the same kind of applicants. At the most basic level, this means it will stick to certain B schools, and within those B schools to certain kinds of students.

It's not just about how well you do at the interview but whether your profile matches with what's worked for the company in the past.

Yup, that's almost as crude as racial stereotyping but no point railing and flailing because that's how the human mind works. It unconsciously tries to fit each individual into a category, making complexity more manageable. We are invariably drawn to people like ourselves.

Companies rationalise that, this way, they get the people who fit into their culture. But the flip side of it is that everyone essentially thinks alike. And can that, in the longer run, really be considered a good thing?

Reasons of merit apart, the policy of sticking to a few select B schools keeps all concerned happy. Recruiters are happy to be in demand at the 'best' B schools, students are happy to be on the exclusive radar of the 'best' recruiters. Maintaining the status quo keeps the halo intact for both parties.

One man's Cat can be another man's Dog

So although numerous B school rankings may be published every year, it rarely if ever alters the recruiter's pecking order. For 'class' or the jobs requiring brainwork, it's a select few institutes. For 'mass' or the gruntwork jobs, it's down the B school ladder. And how low down this ladder a company will go depends on how many freshers it requires.

With so many new sectors opening up -- retail, insurance, BPO, telecom -- it would seem the job pie has grown exponentially. True, except that B school you graduate from often still determines whether you eat your slice at the chairman's table. Many companies follow differential recruitment policies. Better salary, designation and job profiles are offered to the more premium grads.

But, in an ironic twist, one man's Cat can be another's Dog. Several reputed companies -- especially Indian ones -- prefer to recruit from less elite campuses. These MBAs, they believe, work harder to prove themselves and are far more loyal to the organisation.

It's a different thing that, given half the chance, the same MBAs would jump to join the very MNCs that won't touch them!

One final consolation: Dog or cat, at the end of the day the MBA is but a rat. The right MBA can set a scorching pace. The question most forget to ask is -- am I running the right race?