Some people feel that management is an open field and that if the basics of management are learnt then a person becomes an expert in managing any business. Another school of thought is of the opinion that management cannot be generalized and that skills required for different industries are different. Those who subscribe to the latter feel that we need to develop specialized management courses for cultivating the required skills.
A company recently did an internal survey to determine whether the top management consisted of people from within the company or from outside. The results were quite enlightening as they discovered that the top ranks in the management were not people who had risen from within the company. The biggest problem that the HR team then faced was to motivate employees who worked at the junior level. How were they to develop a sense of belongingness amongst company employees when it was clear that the very top places for which they strived were not occupied by people who had been in their positions earlier? The HR team decided to analyse the promotion policy. They determined that the promotion policy was based purely on merit and was thus fair. This now implied that no person in the company's junior ranks was good enough because the training that the company provided was below the standard required. The HR team then found that compared to industry standards, the company provided excellent training facilities.
So, the promotion was merit based and the training was best in the industry. What was wrong then? The HR team had a brainstorming session and nothing new emerged. The HR Director then decided to go to the Chairman and discuss the issue with him. On reaching the Chairman's office he told the Chairman's Personal Assistant (PA) to download the presentation. To his surprise, the PA said that this was not her work. She claimed that she was only responsible for correspondence with the Chairman and appointments with him. The HR Director then understood that the problem was distribution of responsibilities and not training!
It was clear to the HR Director that between the different departments there was no rotation of duties. Further, people were concentrating only on the areas allotted to them and not thinking of the strategic importance of their work for the organization as a whole. Employees were working in their own cell of sorts and did not have the competencies to involve themselves in anything outside of them. The Director decided to immediately form a committee to consider development of synergy, study the company's value chain, enforce proper distribution of responsibilities and authority while keeping strategy in mind.
The company in question is a big retail chain in India. The HR Director immediately diversified his employee base. Not only did he recruit people with a background in retail management but he also began recruiting from schools that offer a general management degree. Currently, the percentage of people in the company's upper management with a degree in retail management is less as compared to those with a general MBA degree and the balance is further and fast titling in favour of the latter.
You may be thinking that what I just described is fictitious but this is exactly what is happening in retail. It is true even in the hospitality sector and indeed across other specialised fields. Let us consider banking now. Due to recession, banks are recruiting not people with expertise in banking but experts in strategy who know how to launch new services and develop synergies. Domain specific knowledge is required only at the value steps (junior work concerning logistics and supply chain management) but at the top level, general expertise coupled with industry experience and a wide perspective in strategy is more important.
Recently, I visited one of the largest retail chains in the United States of America. I got to know that the work done by qualified retail specialists in India is in the USA done by experienced employees who haven't even gone through an undergraduate programme!
It is popular opinion that in times of recession, experience and domain expertise is more important. This is true but a person who has experience in internal value steps and has also worked in an external environment can only bring profits. This is not an issue which has clearcut black and white areas. Companies have to ensure employees develop a strategic bend of mind and can relate their work with the entire value chain of the company. This would also help in developing expertise and vision.
I am not saying that a domain specific MBA is good or bad. Companies that require people with domain expertise should not keep them only for domain specific work. Their experience should be shared and the training imparted should be holistic.
In conclusion, students should opt for a domain specific MBA where basic management topics are taught and they get an idea of management as a whole rather than only a specific domain. To my horror I have noticed that the course structures of some retail and banking MBA programs are skewed towards domain expertise and have no general management subjects. The students who graduate from such courses would be akin to frogs in a well. Domain specific requirements exist and students should look for good colleges with good corporate relations.
Prashant Salwan is professor, International Business and Chairperson - Placements at the Indian Institute of Management (IIM), Indore.