How the software industry runs...

This is just one view. My manager educated me about this a few weeks ago.

My manager tells me that here is where the MBA graduates and IITians (who work in the software industry) all come to play. They will go the requirements and say "Well from understanding your requirements as stated in the tender, this is your product (Product A). But if we give you Product B, (which basically covers all Product-A), you get these [attractive] features, plus you don't need any support for the next three years. Else you can take Product-C, which is blah blah blah; it has more [attractive] blah blah blah". This is not intended to pun the software industry. In fact I don't know if firms actually function this way; I've never verified it.

I still can't figure where the MBA graduate plays in all this. How does his/her expertise actually help? I am only dying to know because I am currently undergoing a correspondence course on MBA - Post Graduate Diploma in Information Technology. There are IT related subjects as well as management subjects. Its the latter causing all the fuzz. I am not able to relate to them. The question is still open, and I am all ears.