‘Summer Internship – A waste of time?’ by Prof. Arindam Lahiri, Executive Director, Indus World School of Business



Does summer internship really contribute substantially to the learning process of a business management graduate?

There are arguments on both sides and both views can be logical. Before we delve into this, let us take a look at the process of management education. During the first year of the usual 2-year MBA programme, a student is exposed to the various functions of an organization. This prepares the student for the foundations of management theory. However, management education in hardly academic in nature – it has a strong focus on applying the same in real life situation and this transition is difficult.

My own view is that the summer internship provides you with the best opportunity to attempt at making this transition. And most students fail while making this transition, as this is the first time that most of them are attempting such a transition. Yes, even for the students having pre-programme work experience – since it is the first time that they will attempt to put management theory (which most of them are not aware of, except for undergraduate management students) into practice.

It is this failure that raises a question mark over the entire practice of summer internship. And most students do not fail only once at this summer internship. They fail a number of times subsequently in their first job. This also raises another issue about a large percentage of management graduates leaving their first job within the first 12 months – we will not get into this here.

Learning through failure is an important pedagogical tool. A summer internship allows student to get frustrated and underscores the challenge of application of management theories in practice. Such an exposure, if absorbed internally in a constructive manner, can be one of the most important learning for the student. The student, with the help from his faculty members, must analyze the challenges of application and failure points. Understanding the constraints and parameters within which various theoretical constructs are applied is important. And without repeated practice, this is difficult to achieve.

However, once word of caution at this point, one must be careful about internships where the student is completely left on his own and not challenged to deliver. In such a case, opportunities to fail, is minimal. Though the internship experience may be comfortable, the learning may be incomplete.

Using the opportunity of summer internship to understand how organizations work, especially how people in the organizations behave, is a must learn for all management students. It also helps the students to establish some useful networking relations. At the same time, it allows the student to gain self-confidence by comparing his own efforts with other existing employees in the organization. It helps a student identify his strength and weakness for effective working in the organization.

A summer internship may add more value to people who have worked for less than 2 years with an organization. The challenge in most cases, result from expectation mismatch of the student and the organization. The core objective is that the need for summer internship is of the student and not necessarily a need of the organization. The onus is on the student to make the most out of this opportunity.

A summer internship has been a life-changing experience for a large number of students (and these students are not necessarily the students with pre-placement offers from organizations). It impacts the choice of organization, functions and the pace of career growth of an individual.

Research paper from Prof. Arindam Lahiri(Executive Director – IWSB) got selected at IIM Ahmedabad.

Title of paper:  Role of Vocational Education and Training in mitigating the challenges of inclusive growth in emerging economies

About the article:

The paper examines the challenges of capacity building and its linkage to the overall challenges of inclusive growth in emerging economies. The Indian formal education sector has not included vocational education and training (VET) as an inherent part of capacity building. Over a period of six decades post-independence, the initial focus has been lost and today we end up with a capacity mismatch of VET capacity in formal sector vis-à-vis the workforce that enters the Indian labour market for the first time. The case studies include the social impact of the capacity development initiatives and compare it with such initiatives being undertaken with other emerging economies around the globe. The research firmly emphasizes that inclusive growth and empowerment in emerging economies can happen through vocational education and training.

Research paper from Prof. Raju Majumdar got selected at IIM Calcutta.

IWSB congratulates Prof. Raju Majumdar (Faculty Finance, IWSB) on this wonderful achievement.  The abstract of the research paper is given below. The paper will be presented in International Finance Conference to be held at IIM Calcutta from 9th to 12th January.

Abstract:-

Agency, Asymmetric Information and Market Timing Theories of Capital Structure: A Reinterpretation of the Relation Between Growth and Corporate Borrowing

Financing growth opportunities is one among the biggest challenges that a firm face. Corporate finance theory, based on agency conflicts and asymmetric information issues predicts an inverse relation between the two; empirical analysis of firm’s borrowing behavior also corroborates the assertion of theory.This paper develops an alternative interpretation of the observed inverse relation based on the market timing theory of capital structure and provides empirical evidence to substantiate the claim that incorporating growth in terms of market-to-book ratio does in fact measure alternative theories that have varied interpretations based on firm specific micro factors as well as macro economic factors. Consequently, in order to devise a conclusive and non-overlapping test of theory there is an urgent need to revisit the issue of firm growth and its estimation, as well as reinterpret existing findings in the light of our findings.