Is it a good time to do an MBA when the world is on the brink of recession

MBA
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Is it really a good time to get into an executive MBA particularly for those who want to be in financial services sector. world’s major economies are at the brink of recession. big banks are going bankrupt. the concept of investment banks is …

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Is it really a good time to get into an executive MBA particularly for those who want to be in financial services sector.

world's major economies are at the brink of recession. big banks are going bankrupt. the concept of investment banks is fading.

i think it was these banks that were driving the salaries of b schools higher. average salaries are going to see a major correction. is it wise today to invest in expensive MBA programs like ISB etc when the market scenario is so gloomy

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I believe this recession can't last for eternity and the situation will soon be normal again,so pursuing MBA isn't or shouldn't be much of a problem,because the job prospects will be high as usual at the end of the course.The students who will be passing out now may face the music,I repeat may,but those who will enter the course now won't face much of a problem at the time of their placements.Again that's what I think.Let the experts shed some light on this

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Of course it is. College is a comfortable place where you're shielded from all the ills of the world, recession included. One cannot say whether things will be vastly better after 2 years, but they would surely be different than what they are now. So go live out the uncertainty in a school.

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Good Question. There are many aspects to the answer.
I shall try to provide my perspective and welcome all reasonable critiques of it.

1) One year Executive MBA is more useful to "verticals" (those who aspire to go up the hierarchy in the industry they were in before they joined MBA) than to "laterals" (those who aim to switch industries). Even in good economic conditions the dice is loaded against the "laterals". In times of economic difficulty this will be doubly so. Organizations everywhere will want the safest pair of hands for their positions and who better than an experienced person at this time.

2) Even if one were to get a break in another industry, remember that this "lateral" is the person with least experience, atleast in the industry he has joined. Unless one is extraordinary it takes time for an employee to be productive to the organization that employs him. If said person has several years of job experience then his salary expectations may also be higher. All in all, come the time for restructuring, organizations will see that said person has high salary and is not contributing very much to the organization's bottom line. Mind you, it is not the person's fault. It is just that the person, in spite of all his abilities, is at the wrong place and the wrong time.

My feeling is that if you are a "vertical", in the Non-IT/Non-Export Oriented field then you should probably go for the executive MBA, as it will be an additional qualification in a tough business environment. However even then you should be careful as 1 year is too short a time and the way things are moving business environment can change drastically in that time. If you are a "lateral" then wait and see.

Whatever you do, do not see MBA as an escape route. It isn't. You still have to face the world after 1 year, especially if you are an executive MBA aspirant.

As I said before this is my perspective. I welcome all counterpoints to my line of reasoning.

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I feel this is the perfect time to get into a school. The one-year MBAs will finish with their studies only by Q1 2010. Even if slowdown continues, it will not continue for this long. If it really does for this long then everyone will be deeply affected not just the freshly minted MBAs. So in terms of time factor, I don't see any issue in entering into a school - be it one year or two year - No issues.

However, the issue will be the extent of financial burden one can afford to take. Firstly, in these economic conditions world-over, I really doubt if any financial institution would be so keen to extend the student loan to international candidates. Secondly, I feel it is very riskier to get out of the schools with a loan burden of almost 1 crore (approx cost of MBA in a top 10 bschool) especially because the uncertainty of career prospects post MBA looms large because of current market conditions.

Hence I feel, it is up-to ones financial comfortableness to take a decision as to whether to go for a 1 Yr MBAs in India or an International MBAs (1 year or 2 year).

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i think its the best time to do an MBA rite now...coz ne1 doing and MBA will have aleast a yr on his/her hand and thongs will change in one yr...dey definitley going to b better than wat dey r at the moment...Also as the job market is not tat gud it makes sense to go for studies rite now nd wen u get out of college u wud ge a better job scenario plus an MBA degree....so it makes a lotta sense in going for an MBA rite now..

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The million dollar question is- How long would this recession last? Typically it takes minimum 3 years to come out of the trough. Thus in my opinion, 2 years MBA aspirants have nothing to worry.
One years MBA aspirants have to be picky in the B-school selection.

I welcome differing viewpoints.

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hi,
I am akash verma , Doing my mba retail from BIMTECH.The present Scenario in Global economy is certainly going to affect the Oversea placement.But in my view point, Indian economy should not be greatly affected by the Current US Economy.
specifically talking about retail sector in India, it would continue to grow in a tremendous way(Although not in a way as speculated in past).this is evidance by the fact that many top International companies such as walmart , mark n spencer , tesco and others.Most of indian companies are also planning to expand.
hence the speculation about placements is a distinct possibility.

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Getting admit into good b school will be difficult this year because of the following factors
1. CAT 2009 going online. Many would try to give this year as their last attempt.
2. Economic slowdown has forced joining dates ahead , thereby providing many fresh pass out a good amount of oppuunity and time to prepare.
3. This global recession would be over by the time 09 batch will pass( HOPEFULLY)
4. Last but not the least 3 lac ppl are writning CAT

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I have done some analysis and R&D; on it ....here are my comments.

see, everybody wants to earn money and want to enjoy life ...will you be happy to pay the EMI rest of your life ? do you like to lead a life with a loan burden throughout your life....if so ...how long ? if anything bad happens to you , will your family suffer ? what happens if you fail to get a job but have to pay the time bound EMI's of the bank....and also after MBA you need to shell out bucks to maintain your lifestyle.

these are all practical things that you know , i know and everybody knows.

current situation is really very very adverse ...especially whenever BSchols have increased the fees heavily and placements are in drought. And one important thing is ,in campus placement everybody does not get the big paychecks .....its the people who have very good profile (and also a good luck) gets the big bucks ...others remain average....i think , if you are an engg graduate , you know very well...how many students are picked up by google and what are their profiles.....so unless you have a big strong profile ....its hard to predict the job prospects too....and at this time many companies are sacking their employees ....keep an eye in the newspaper , you will get to know.


that does not mean , i am against doing MBA . You should go for MBA , if you can afford MBA fees in a comfortable way ....it would be excellent if a good amount of the fees be self-financed for a safe side ..so that you can pay back the EMI's in proper time...Nowadays Banks are very much aggrasive ...they are ready to finance the fees.....but they are hard-handed to extract the money in your bad situation....no mercy ....whether you are jobless or not....they wont mind to beat you up infront of your colleagues ,family , employees to get their EMI's .....i think ,you have seen this kind of news in TV, newspaper etc .

trust me , you wont feel the pressure now ...but definitely feel the pressure at your middle age if you take any hectic, unplanned decision and that will lead to a very disastrous end.

I just told you the factors associated with this to consider before taking any decision.

some of the alternative things if you dont want to go for MBA at this moment

(1).people who are in the same company for a longer period they get more salary because of the consecutive hikes in each year and experience on the product.
(2)Job shift sometimes offer good salary
(3)onsite opportunities ....earnining dollars


Hope , it helped

thanks

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So what is the best solution for somebody like me who is has IT/BPO exp of close to 5 years .......what would be the best bet....Average in Academics/Extra Curricular ....

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jamie Says
So what is the best solution for somebody like me who is has IT/BPO exp of close to 5 years .......what would be the best bet....Average in Academics/Extra Curricular ....


there are lots of opportunities
(1) you have a good amount of work-ex ....you can apply for Project Manager / Product Manager in various company....you can definitely expect a good job on the basis of your past work-ex . how many clients you have handled and what are the profiles of those clients ....these will add value to your CV ....Average in academics is not a matter here .
there are managers in IBM, Infy , TCS who are not that much good in academics but they understand their work well and manage the work .


(2)If you want to change the line of service, then you can think about ex-MBA course ...these are expensive but this is suitable with your work-ex......if you have good savings during this 5 yrs job-tenure then you self-finance your MBA to reduce the risk ........ job will depend upon your profile and also luck

(3)this is not a good time to shift jobs at this moment whereas most organization are laying off people unless you have compelling reasons to leave your present organization ....otherwise , you could think about joining a smaller organization with high salary .....in small organization , you might get better work and with bigger role and responsibility ....but in this volatile market , this choice probably not good.
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Another offshoot of these crazy times is the violently fluctuating exchange rates... at one point of time this year... 1 usd ~ 1 AUD. Now 1AUD ~ .66USD.

I did a little analysis on what this means in terms of mba fee for programs in different countries. Hope this will be helpful for people who are looking at sponsoring their mba with their hard earned indian currency or looking to take up loans from indian banks.


B-school Tuition Fee Tuition Fee (INR)
Melbourne B-school 54,000 AUD 17,28,000
INSEAD, France 50,000 Euro 32,70,000
Judge, UK 33,000 GBP 27,32,000
Queens, Canada 65,000 CAD 27,90,000
Harvard B-school 87600 USD 42,50,000
NUS, Singapore 50000 SGD 16,00,000
HKUST 320000 HKD 19,84,000
ISB 16,50,000 INR 16,50,000

Note. I have only considered the basic tuition fee.

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thanks Tank

that was a good post ....i was also looking for that stat.
btw, friends those are just fees that you have to pay to the university ...and you have to bear the personal expenses by your own


780 ! ......wow ...how do you manage to get such big scores consistently!

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Financial perspective:
I personally feel that when one goes to pursue an MBA abroad (atleast this year), one must check his financial health first...

Get this absolutely right...OneCANNOT rely on loans for their MBAs. Forget about non cosigner loans this time around. Even top MBA colleges have stopped giving out non cosigner loans...(atleast Ross College)

I got a confirmation mail from their adcom saying that effective from Nov 2, 2008 (for this financial year), they have stopped giving out the Ross CitiAssist loans and that I need to find out other means (...basically...pay by myself) for the tuition..(the fees are not low either). This was the loan that was for international students wehre one could get a full tuition loan minus any schols received.

Job Prospects:
The job market would be down for quite sometime..Probably a year or more..Since finance sector is hit hard (real hard), other sectors will slowly face the heat. No sector would escape unscathed. This does not mean a 'No jobs' scenario but it would be very difficult to find one. One has to take that into consideration while going for an MBA. I work in IT for a manufacturing firm and the situation looks bad..Due to liquidity crunch ppl dont have the money to buy stuff the companies produce..

What I want to say is, before going for an MBA, think logically and rationally, think about your finances...dont burden urself too much with a loan..It was OK previously to do so as getting a 100k+ job was not that big a deal..Think about the ROI...
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Financial perspective:
I personally feel that when one goes to pursue an MBA abroad (atleast this year), one must check his financial health first...

Get this absolutely right...OneCANNOT rely on loans for their MBAs. Forget about non cosigner loans this time around. Even top MBA colleges have stopped giving out non cosigner loans...(atleast Ross College)

I got a confirmation mail from their adcom saying that effective from Nov 2, 2008 (for this financial year), they have stopped giving out the Ross CitiAssist loans and that I need to find out other means (...basically...pay by myself) for the tuition..(the fees are not low either). This was the loan that was for international students wehre one could get a full tuition loan minus any schols received.

Job Prospects:
The job market would be down for quite sometime..Probably a year or more..Since finance sector is hit hard (real hard), other sectors will slowly face the heat. No sector would escape unscathed. This does not mean a 'No jobs' scenario but it would be very difficult to find one. One has to take that into consideration while going for an MBA. I work in IT for a manufacturing firm and the situation looks bad..Due to liquidity crunch ppl dont have the money to buy stuff the companies produce..

What I want to say is, before going for an MBA, think logically and rationally, think about your finances...dont burden urself too much with a loan..It was OK previously to do so as getting a 100k+ job was not that big a deal..Think about the ROI...


Checked the ross website, i guess if u apply before the 2nd nov deadline.. u may still get a loan for the coming admission cycle (2009-11).. but it definitely seems bad for int'l students..

also the increasing dollar exchange rate and bad job market will be a serious consideration for indian students this year .. esp those who will hv to finance their mba on their own..

@sandy -- ne other top mba that is stopping the non-co-signor loan this year ?
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Checked the ross website, i guess if u apply before the 2nd nov deadline.. u may still get a loan for the coming admission cycle (2009-11).. but it definitely seems bad for int'l students..

also the increasing dollar exchange rate and bad job market will be a serious consideration for indian students this year .. esp those who will hv to finance their mba on their own..

@sandy -- ne other top mba that is stopping the non-co-signor loan this year ?


I am not apping to any other top coll other than ross. Hence I have an idea about the situation in Ross. I am not sure whether we can still apply b4 the nov 2nd deadline and get a non cosigner loan..

Still there are a few doubts in the loan application. They ask for an applicant refree who resides in USA. Im not sure whether he is the cosigner...

If we do not have one do we need to keep it blank?? They ask for your I20 forms or any visa along with the appln as they fall under the 'immigration forms' category...

But just looking at the situation its not very hard to predict that most colleges would stop giving out non cosigner loans..If they still give it out its very good for us though..
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We seem to be in precarious times; however, as we all know, the economy goes in cycles: bust and boom.

Looking at the recent economic cycles from the 1987 stock market crash to the dot.com bubble and today's sub-prime mortage crisis lead economic downturn, the picture does look bleak.

If you are an eternal optimist, this might be the BEST time to get a MBA (if you can afford it). It seems 'logical' that in a year or two, our economy would have corrected for its excesses, and we will be in the upward movement again. However, we also have to keep in mind, many of us wanted get a MBA (for right or wrong) for those six-figure salaries in the investment banking field. But it is very likely that these investment banks will be very different post-2008. But that is not to say that there will some other vehicle out there that has taken the place of the investment bank.

Again, I would like to emphasize the important question: Why do I need a MBA? If it is for short-term gains, it might be better to postpone the MBA to next year, and see how the market stabilizes.

However, if we want to do a MBA, with long-term vision, and not to make a quick buck or two, it might be the right time to get the MBA now.

Two notes of caution from a US MBA standpoint:
1) Loans to international students (as well as US citizens) will be reduced over the next year due to the financial meltdown. One might need to show 'credit-worthiness'.

2) Many ex-bankers/analysts are going to be applying for MBA's since it will be their safety net. So, the application pool is going to be very competitive.

Good Luck!

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tank-I,
This is very useful information.
But one's decision regarding where to study MBA can't be based on the tuition fee alone. If that's the case we are better off studying in a second or third rung B-school in India itself.
We have to take into account the total cost including living expenses and even more importantly, we need to think of job opportunities post-MBA and the kind of salaries one may be able to get and in which country etc.
For example, it may be true that fee at Melborne is quite cheap at the current exchange rate, but how easy or difficult is it to get a job in Australia, post-MBA? What would be the pay if we get the job and what would be the savings potential, assuming a certain reasonable standard of living?
I think answers to the above questions will play a very important role in making our choices.

For example, I am told that it isn't easy for foreigners to get a job and work permit in Australia post-MBA! (It is possible that I am misinformed); If so, what is the value of Melborne MBA, else where or in India? Answer to this question will decide whether or not we should do MBA in Melborne, even if the fee is only Rs. 17 Lakhs.



agreed.. my post was only info.and tht too a part of the bigger picture.

its easier to get jobs in aus and canada post-mba than it is in us or uk. singapore and HK shud be easier than aus/canada. for europe, u may need to learn 1 additional language..

and at this time when people r increasingly becoming risk averse... u need to make a prudent choice... if u only have 20 lac rupees that u can use for an mba... u may want 2 look at programs that fit into tht budget..

unlike even.. 6 months back.. when jobs were flowing left right and center... the job market has dried up.. singapore officially went into recession.. and u never know whether it will be europe/us/india that will be next... and when will these economies turnaround.

the "where mba" question has never been more pertinent.