Rankings generate hype, debate, sometimes even controversy. To a large extent, their legitimacy has developed because they represent a connection between academia and the media. They are one of the resources used by prospective MBA candidates when making their programme selection. However, candidates should always look at rankings with a critical eye and not simply take them at face value.
Academia has a vested interest in rankings, as it craves popularity amongst potential candidates. The media, on the other hand, is highly motivated to play an important role in the field, since their stamp of approval for various institutions and programmes has actually made them a key player in the MBA world. Each one of the reputable rakings contains an enormous amount of useful information. Having doubts as to whether you would be able to pay back the loans for your study? Just check the ROI of the MBA programme you are considering. Not sure whether prospective employers prefer the school of your choice over its competitors? Check the corporate recruiters’ statistics that indicate the most sought after MBA graduates. Once you start preparing to apply for an MBA and begin researching and educating yourself on the subject in order to make the best decision, you can find respected sources on literally every topic related to the MBA degree. Those include - but are not limited to – classic rankings, statistical data and interpretative articles on hot topics in the business education world. However, always keep in mind that your MBA programme selection should not be solely based on external factors but should always take into consideration the specifics of your own profile, application package and post-graduation expectations.
The never-ending debate
The idea of rankings, when they were first created, was hardly to form public opinion. They first became visible to the public en masse in 1988 when BusinessWeek published its first ranking. But their earliest beginning was actually 11 years earlier with the Carter Report, that looked at how often faculties published in academic journals. In that same year - 1977 – the Ladd & Lipset Survey asked faculties about which schools they thought were the best. Also in 1977, deans voted for the best business programmes for the rankings of the MBA magazine, which is no longer published. Since then, however, the situation has transformed considerably. Over the years, MBA rankings have come to be perceived as one of the most respected sources of information when it comes to discussing programmes’ quality, reputation in the business education world and post-graduation ROI. Schools want to participate in the rankings game, as they appreciate the marketing advantages it offers. However, there is an ongoing debate underway as to whether the modern standards set by rankings may not be as perfect and objective as they claim to be but are, instead, designed to make schools excel academically and to give them an advantage in the market by packaging them more attractively.
Either way, rankings form a large chunk of the public’s perceptions about various schools. And when taken to an extreme, this could cause potential problems. This is why candidates should never take any information lightly without conducting additional thorough research and without judging it solely from their own perspective.
Always be critical
What MBA candidates should remember is that the information rankings contain some flaws and intrinsic limitations. The rankings are not a mirror that reflects all advantages or factors relating to a certain school or programme. “Sometimes ranking outlets will attempt to gather data from many schools, but when those schools decline to participate, they gather the dataanyway from “various public sources” such as websites or by emailing enrolled students”,explains Matt Turner in an article for www.poetsandquants.com. For instance, let’s consider the numbers used for calculating the annual remuneration of graduates. Those numbers are usually based on alumni answers. However, the statistics could be flawed here as the final numbers we see in the rankings are not based on responses from all alumni who were approached, as many of them do not respond to queries. In essence, the calculations of average remuneration are sometimes based only on responses from alumni with generally higher salaries. At the same time, if it is not reported, the final number we see in some rankings doesn’t indicate that some alumni have significantly lower salaries and the statistics automatically become biased.
Additionally, it is very hard to quantify with flat, numerical statistical factors, qualities such as the research or the communication abilities of students; their entrepreneurial skills and other crucial intangible business-related skills and talents gained and cultivated during an MBA programme. So, once again, while extremely useful when forming an opinion of a certain school and programme, rankings should not be trusted blindly and taken out of context as simple numbers.
Who ranks rankings?
Indisputably, The Financial Times, Forbes magazine, The Economist, Business Week, The Wall Street Journal, and US News & World Report generate some of the most respected rankings. However, readers should always keep an open mind. “Who comes out on top, in any rankingsystem, is really about whois doing the ranking”, wrote the famous journalist and The New Yorker writer, Malcolm Gladwell. And we couldn’t agree more. Nevertheless, even though they are far from perfect, some rankings have gained respect and authority over the years.
The Financial Times looks at the weighted salary of MBA graduates (20%) and salary increase (also 20%) over the last three years. 10% of the methodology accounts for the number of published articles by faculty members in academic journals, 6% for international mobility, FT doctoral rank carries 5% weight, and faculty with doctorates another 5%. In the last 2013 rankings, FT lists Harvard in first place followed by Stanford, Wharton, London Business School, Columbia, INSEAD, and IESE. Forbes’ biennial ranking examines solely the return on investment in the five years after graduation. The average payback for Class of 2008 was 3.7 years – a very good result in times of crisis. However, just 10 years ago, it was 2.7 years. The best American business school for 2013 was Stanford, which enrolled only 7% of candidates that applied. Numbers two and three were Booth and Harvard. The international one-year MBA programmes were in IMD, INSEAD, and SDA Bocconi.
Business Week’s ranking is based on the opinion poll of students, 45%, and of corporate recruiters, another 45% of the final result. Publications in academic journals account for the other 10%. The first three US schools in 2012 were Chicago (Booth), Harvard and Wharton – the same result as two years ago. For international schools, the first three were London Business School, INSEAD and IE Business School. Meanwhile Business Week made an error in their rankings, due to a change in methodology. This is why they corrected their figures last year. The “intellectual capital” factor, accounting for 10% of the score of schools was revised. This change affected 40 American business schools and 10 international schools, sending, for example, Harvard to 19th place from 9th in the intellectual capital rankings.
Accreditations come with priority
The accreditations are a reliable tool for evaluating the merits of a school. They are proof of academic standards, definitely a better hallmark of quality than rankings, and deserve to be taken seriously. The three main accreditation agencies in the world are EQUIS, managed by the European Foundation for Management Development (EFMD), the Association to Advance Collegiate Schools of Business (AACSB), and the Association of MBAs (AMBA). The granting of an accreditation doesn’t only certify that a programme has certain criteria, but also an obligation to maintain them. So, the more important question than “how is this school ranked?” should be “is it accredited?”
All in all, we recommend you to keep track of rankings but also remain fully aware that no one-dimensional ranking system could possibly create the ultimate ‘best schools’ list. There are, however, best programmes for you – in line with your interests, career goals and personal profile.