Problems Faced by Tier-2 & Tier-3 MBA Colleges in India


Ranging from the lower quality of education and average infrastructure to the lack of practical skills enhancement of students, Tier-2 and Tier-3 MBA colleges face multiple problems in churning out the best of management professionals for the industry.

What are Tier-2/3 MBA Colleges?

When we talk about Tier-2/3 MBA colleges in India, we are referring to the not-so-popular management institutions. The best of MBA aspirants always yearn for Tier-1 colleges like IIMs, FMS, SIMS, and other such top MBA institutes that offer the highest level of management education in the country. On the other hand, the Tier-2 and Tire-3 colleges are far from that level and thus, are the leftover choices for students.

The Present Condition of Management Education in India:

Management is an elite field of education and learning for fresh graduates as well as for professionals with prior work experience. Candidates want to gain management education for several purposes, such as to improve their soft skills, become good leaders and managers, and enhancing their career prospects to rise up in the organisational hierarchy. However, thousands of MBA pass-out students are unable to fulfil their dreams of a great professional career. In fact, lakhs of students are not employable, as suggested by an ASSOCHAM study.

The study also informs that only around seven percent of the total churn-out of all MBA colleges in India is of employable quality. This is the condition of management education when there are about 5,500 B-schools across the country. Only the tier-1 institutions, including IIMs, can boast of their education quality. The condition becomes unfortunate when we see these MBA graduates spending a huge sum of money on their degrees and finally landing up with jobs that earn them just a few thousands of rupees monthly. Many students are not that lucky, as they do not receive placement benefits from their Tier-2 or Tier-3 MBA colleges.

The Real Problems of Tier-2 and Tier-3 MBA Colleges:

As the above-discussed situation can be attributed mostly to the Tier-2/3 MBA colleges, it is important to understand the problems such management institutes and their students face. Here is a quick comparison of Tier-2/3 colleges with Tier-1 colleges to understand the factors on which both differ.

Differentiating Factors Between Tier-1 and Tier-2/3 MBA Colleges


Tier-1 MBA Colleges

Tier-2 and Tier-3 MBA Colleges

Quality of Management Education

IIMs and other Tier-1 colleges offer the best management education of international B-school standards.

These colleges have an okay to low quality of management education, which does not even meet Indian education standards.

Industry Exposure

Several activities like seminars, conferences, research, industry visits, and training are organised to offer high levels of industry exposure to students.

Not many initiatives taken in this direction, except the mandatory industrial training

Faculty and Alumni

The topmost management gurus with intense industrial knowledge are among the faculty members. Experienced alumni are also available with good networking opportunities.

Not many popular faculty members can be seen at these colleges. Many among the alumni may still be seeking good jobs.

Skill Set Development

Practical and efficient skill set development so students can later handle industrial/workplace issues impressively and confidently

Much of theoretical knowledge imparted to develop skill sets of students

Course Fee

Average range: 5-15 L

Average range: 1-5 L


Almost 100% placement in reputed firms nationally and internationally

Very few students placed in top firms; most receive average to no placements

Infrastructure and Campus Culture

World class

Needs high-scale improvement

As you now know the basic variations between Tier-1 and Tier-2/3 management institutes, let us take you into the details of major issues faced by Tier-2/3 MBA colleges.

  • High Student Intake: While Tier-2 and Tier-3 MBA colleges have limited seats available on admission, the intake is still higher than Tier-1 colleges. This is because of the less number of Tier-1 colleges as well as the less number of seats available in those colleges. Tier-1 colleges are simply unable to meet the needs of an increasing number of MBA aspirants in India. Even meritorious students do not get admission sometimes. Thus, they turn towards Tier-2/3 colleges that have a comparatively higher intake and less intense competition. Thus, the brightest of minds only move to the best of colleges.
  • Low Education Quality: Tier-2/3 MBA colleges face fierce competition when it comes to the quality of management education they impart to students. Most of these colleges are unable to match Tier-1 colleges, as they are not globally benchmarked. Some of these institutions are unable to recruit good management faculty, while others are not even able to pay high salaries to their faculty members. This affects the teaching quality and pedagogy. This also keeps meritorious students away from these colleges, thus bringing down the quality of education at such colleges.
  • Lack of Skill-Based Education: This is one of the most ferocious problems faced by Tier-2/3 MBA colleges. While these colleges have been offering decent education, most of it is theoretical. It is time for these colleges to shift to skill-based education that can bring a change in students and prepare them to face the complexities of workplaces. Tier-2/3 colleges are lacking on a practical approach to teaching, which includes pedagogies like research projects, case studies, industrial studies, and hands-on training. It is important that these colleges focus on the current industrial trends and create flexible syllabus to suit the needs of the local job market. As Tier-2/3 colleges lack practical education, competing with the top colleges during student placements only brings disappointment to students.
  • Placement Scenario: The placement scenario is not very bright in Tier-2 and Tier-3 MBA colleges. While some of the colleges manage to achieve student placements in reputed companies, some others just struggle on that part. Many such colleges cannot even network with good firms and provide placements to all their students. Additionally, the placements on the part of such colleges are unable to fetch high salaries for students. Some MBAs simply pass out of their courses and keep looking for suitable jobs. It is important that government authorities come up with more job opportunities for increasing number of MBAs in the country. The colleges need to do hard efforts too.
  • Infrastructure and Campus Life: While Tier-2/3 MBA colleges may offer a good campus life to students, many lack the required facilities to impart managerial and leadership skills to students. MBA students require globally benchmarked facilities, outstanding infrastructure, innovative learning tools, and effective informational resources, which generally lack at these colleges. With limited skill development, the students passing out of these colleges are unable to fill the wide gap between their offerings and the needs of the job market. 

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