Advancedge Online :: Mastering Business Acumen

Local versus Global : How feasible is an MBA from a top American B-school? - Sumit Saxena

“So, tell me again, why are you not looking at a US/European MBA?” he said to me with a quizzical look on his face. This actually happened to me not very long ago. I was a typical MBA aspirant planning to write the CAT and get into an Indian business school. Sure, I had 4 years of work experience behind me, but hey- it didn’t matter (a lot) to the IIMs then, so it didn’t matter to me!

“Wait, there has to be a good reason why I haven’t?” I thought. We were coming towards the end of a fortuitous fifteen minute meeting I had with Kamlesh Sajnani, MD, IMS, who can legitimately claim to be an authority on MBA entrance coaching in India. He had just demolished, step by step, every argument I had made. “How did we get here?” I wondered. I came to his office, with the smugness of someone who knew what he wanted. All I wanted to do was to meet the guy, leave behind my business card and go home and brag to my friends about my fifteen minutes of glory. Instead, I went home looking for an answer to his question- why wasn’t I looking for a US/ European MBA?

I had gone in with bullet-proof reason of why I needed an MBA- I felt stunted by my lack of knowledge of financial tools. Surely, I couldn’t rise in the corporate world if I could not make financially sound decisions. “Ah, so what you then need is a 6-month certificate course in finance. Or simpler still, pick up a good finance book and just read it cover to cover. It doesn’t need two years of your time for sure!”
True. But wait, that’s not all, I also needed an opportunity to use my fancy finance knowledge and apply it to real life business problems. “In other words you want a job in the finance sector. Then the books would not help.” Haha, One-all! “But, that 6 month course I spoke about, well that should still work. You get a certificate at the end of the programme and with your experience, you should be able to get a job where you can apply this knowledge”. A 6-month certificate course! Where did that come in now? Who cares about it - I wanted an MBA!

“But why an MBA?” he kept pushing me. “It’s not just finance, it is also about gaining exposure to experts, from academia and industry, to peers who have had experiences that can lend more colour to the education and to business practices that top corporates employ.” Good one. I loved my ability to come up with complex sentences, with subjects and prepositions when driven against the wall – it works like a charm. And, he did look satisfied with the answer. I could see that this is where he was driving me. Did I just walk into something here?

“That’s a great reason to get an MBA. Not job, not financial tools, but exposure,” he told me. Didn’t I just say exactly the same thing using that incredibly complex sentence? I could sense he was nearing his end-game. “So, tell me again, why are you not looking at an American or European MBA? Doesn’t it give you more exposure? After all, your peers would be more experienced on average, your professors would be those who have better exposure to latest developments in the business world, you get a better chance to get exposure to global corporates and you also get a feel of working in a new culture.” Checkmated by an even more complex sentence! I was done. I hadn’t thought about that at all. The meeting ended at that point. What difference fifteen minutes can make to one’s life!

My guess is that many of you might be struggling with the same question at this point - should you be looking at an international MBA? Having been through the process myself, I will try and address some common concerns that one faces when making this decision and hope that it will help you come up with an answer that suits your growth needs.

The first thing that strikes one is if it is going to be a financially feasible move (in business terms, what is the return on investment/ NPV of getting an international MBA?) I would not take you through calculations here, but in a nutshell, most people are in a position to get a payback within 3-4 years. And yes, that includes the lost salary for two years along with the tuition, cost of living etc. Most students at US business schools, including American students, finance their MBA with student loans. While most people can pay back their loans in the 3-4 year period, they don’t do so out of choice - the rate of borrowing for education loans is typically lower any other loan that you might take later and they enjoy tax breaks on the interest paid back.

But are the loans easily available to international students? The answer is yes, if you are headed for one of the top schools. B-schools in the US use scholarships and easy loan access as a means to attract the best global talent. If they want a student, they would not let him or her go just because this person cannot fund his or her education. Most international students in these schools typically cover almost all their expenses through scholarships and loans. Most top schools arrange for the funds to be available without a co-signor or collateral. In terms of cost, now is perhaps as good a time to get an MBA from the US as there ever was:

- Dollar is weak so your degree is 10-20% cheaper in rupee terms than it would have been some years ago

- Dollar is forecasted to fall further (don’t hold it against me if it doesn’t, though) so your loan amount would be lower (if you convert it into rupees)

- Interest rates in the US are low, so loans are cheaper

The specified pay back period, however, does assume that you earn in that part of the world for that period of time. A question does arise: what if one plans to move back to India immediately? If one really wants to return to India, are there enough opportunities on offer on US/ European campuses to do so? The answer to that is a little trickier. Most American campuses traditionally focused on recruiting firms from within the US, and I would think the same applies to most European schools. Despite the recent increase in focus on international recruiting, very few job opportunities that come your way on foreign campuses are actually based in India. Having said that, there are ways you can create opportunities for yourself to do so- most companies that come to top business school campuses are either already in India or would do so at some point of time. So there is always an avenue wherein you can be transferred back to India at some point. The answer, therefore, is yes, it is possible to come back to India in a medium-short term time frame. The salaries at upper-middle management levels of such companies in India have increased to a point where getting an international MBA has become financially feasible even if you want to return to India, though the payback period might be a little longer.

Looking at an international MBA purely from a financial point of view is quite a myopic approach. Yes, financially you do stand to gain but what you gain most (apart from the growth in knowledge, which an Indian MBA would provide equally well) is confidence, expertise and experience to conduct business on a global level.

An international MBA gives you an opportunity to create a social and professional network outside India. One cannot put a financial value to this network and hence people often overlook this huge gain. Also, the whole recruiting process in the US is based on networking. The recruiters expect you to approach them if you are interested in a particular job. In fact, the i-banking interview shortlist is almost exclusively based on how well you network. The process is a huge learning process for Indian students, who are typically less communicative than their American counterparts. But, by the second year, most figure out a networking style that works for them. And believe me when I tell you this – outside the classroom, the biggest thing you can learn from your two years in a B-School is to make cold calls, that is, call upon a person you don’t even know and convince him or her to give you what you need.
Another often overlooked advantage of an international B-school is outside-the-classroom interaction with faculty. Most professors in top schools are well known academicians, authors and researchers. In my opinion, they also tend to be more approachable than their counterparts at Indian schools, though that is strictly a personal take. They are willing to share their research, experiences and expertise (and if you went to the school I went to, even their Thanksgiving turkey) with those who show interest.
I am also often asked if it is more difficult for international students to find a job. The answer to this question is both yes and no:

Yes, because some firms would specifically ask for US citizenship or those with permanent work authorizations - they find the process of getting someone a work visa too daunting.
No, because there are more than enough jobs beyond these that international students tend to choose from. The top consulting and banking firms do not care about your visa requirements - they want the best people they can pick up. Interestingly, these are also the two sectors that most Indians in US business schools fancy, so it happens to be quite a cozy relationship.

And before you even ask, the H1B quota for visa does not impact MBA students that much. There is a separate 20,000 quota for those getting a Masters degree from a school in the US. If you cannot avail of this quota in the first year after graduating (as H1B applications go in during the first week of April while you get your degree in May/June) there is always the one year optional practical training (OPT) period that you get after your MBA that lets you work in the USA without a H1B visa. So you shouldn’t be worried on that count at all.

To round up, therefore, if you are someone with 3 years of work experience or more and are looking to get more out of an MBA than what a 6 month certificate would give you, you should be giving a very serious thought to the international option. The sky is yours to touch only when you are courageous enough to take the leap.

The author received his MBA from Tuck School of Business at Dartmouth in 2007 and now works for a prominent, international Strategic Advisory firm in Mumbai.