MBA

Education
&

C
areers
September 2006 27
S S
S SSPECI ALI SATI ON PECI ALI SATI ON PECI ALI SATI ON PECI ALI SATI ON PECI ALI SATI ON - F - F
- F - F - FI NANCE I NANCE I NANCE I NANCE I NANCE
Finance is one of the most sought after specialisations at management institutes.
Here, we present an indepth article by Mr Mohit Menon, PGDM (TAPMI),
on this area of specialisation in management education.
M
oney makes the world go round, it is
said. Where there is money, there will
always be a requirement for people to
manage it, be it in business or in daily life.
Most commerce students tend to confuse the
functional area of finance with accountancy. That
is not the case. Both these areas are independent
of each other. The finance
function broadly deals with
planning for capital and raising
it, allocating of capital within
and outside the organisation
for maximum return on
investment, budgeting, and tax
planning. On the other hand,
accountancy deals with
accounting for the costs or
expenses associated with the
resources deployed,
manufacturing a product or
providing a service, manpower and supply chain
costs, margins, and profits. Accountancy as a
function also involves preparation of a profit and
loss account, and a balance sheet in adherence
to accepted accounting practices and legal
requirements.
Students who decide to do an MBA with finance
as their specialisation are given a firm grounding
in different subjects that cover economic analysis,
statistics, methods of management accounting,
financial and investment analysis, planning and
budgeting, international finance, and banking.
Courses in valuation methods, risk management,
investment and tax planning are also offered.
Students in the first year of their MBA, attend
foundation courses in Economics, Business
Statistics, and Finance. In the second year of their
programme, they have to opt for a certain number
of papers / electives in order to
specialise in finance. While
most of the top
B-Schools offer students a
wide range of electives in
Finance to choose from,
students are advised to select
these papers depending on the
nature of the job they might
choose to take up once they
complete their MBA. Students
desirous of pursuing a major
in finance are advised to
choose an appropriate summer internship with a
reputed organisation. The time the students
spend with the organisation on the project, gives
them an idea about the kinds of jobs that are
available for MBA students majoring in finance
in the industry, and the competencies they are
expected to display.
There is a wide range of jobs available for students
who specialise in finance from top B-Schools.
These career opportunities can be classified into
jobs with companies whose main line of
FOR YOUR INFORMATION
MBA
Education
&

C
areers
September 2006 28
FOR YOUR INFORMATION
activity / business is finance-related, and those
companies whose main line of activity is not
finance-related. The latter is known as corporate
finance.
Opportunities for finance professionals can be
found in public, private, and non-profit
organisations. Some of the areas where finance
professionals have excellent scope are discussed
below.
Commercial Banking: With burgeoning incomes
and deregulation of the banking sector, there are
a large number of banks offering a wide range of
services to consumers. Gone are the days when
consumers had to wait for hours in a queue for a
demand draft or for withdrawal of cash. Today,
most large banks offer a range of services such
as ATMs, delivery of cash, and demand drafts at
home. You can bank over the internet too! Home
loans, car loans, and personal loans are sanctioned
within 48 hours of submission of the application.
Today, banking goes far beyond just maintaining
a savings account. Its more about wealth
management. A career in banking offers
opportunities in accounts, securities,
commodities, financial management, financial and
credit analysis, and sales of financial services.
Treasury management is also an important
function in banking operations. Examples of
commercial banks are SBI and Citibank.
Investment / Merchant Banking: Investment
bankers help companies and governments issue
stocks and securities. They help investors in
buying and selling these securities and managing
their financial assets. They also provide financial
advice to companies and high networth
individuals. Examples of investment / merchant
bankers are ICICI Bank and DSP Merrill Lynch.
Money Management: Money managers hold
stocks and bonds for institutional clients. They
also sell these stocks and bonds, and reinvest
the funds, to ensure that their clients earn a good
rate of return on the money invested. These
money managers also provide clients with advice
on their financial investments. Mutual Funds
such as HDFC Mutual Fund and Kotak Mahindra
are examples of Money Managers.
Corporate Finance: Employees working for large
corporates and non-banking financial companies
raise money to run the business, deploy the funds
to make the existing business grow, make strategic
acquisitions, and plan for the financial future of
the business.
Management Consultancy: Several management
consultancies recruit students as consultants,
who in turn help clients restructure the financial
aspects of their business. They also help their
clients in mergers and acquisitions. Examples of
consultancies are Ernst & Young, and
PricewaterhouseCoopers.
Insurance: With the insurance sector opening
up, there is a growing demand for finance
professionals, who understand the need to help
individuals and businesses manage risk to protect
themselves from accidents / losses. Examples of
insurance companies are Max New York and ING
Vysya.
Finance professionals are expected to have good
interpersonal and communication skills, be
systematic at work with an eye for detail, have an
aptitude for research, and possess good
computer skills.
MBA
Education
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C
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September 2006 29
FOR YOUR INFORMATION
There is a mistaken notion that a student with a
graduate degree in commerce does well in finance.
In fact, a lot of non-commerce students, such as
engineers and graduates in science, take up
finance as a specialisation and do well. Therefore,
what should matter to students who wish to
specialise in Finance, is their interest and aptitude,
and not their academic background.
Students who are recruited on campus by various
companies for the finance function, join as
management trainees. The designations that are
assigned to them differ between companies. An
equity analyst at a stock broking firm could have
a different designation at another firm, even
though the job profile be the same. Finance
professionals eventually become the CFO (Chief
Financial Officer) of their company. Sometimes,
they may also go on to become the CEO (Chief
Executive Officer) if the companys main line of
work is finance-related.

(The author is General Manager,

Student Relations, T. .. ..I. .. ..M. .. ..E. .. .. Pvt. Ltd.
)