Once you start thinking about which schools you want to want to apply to, you need an objective criterion to understand which are really best for you. Overwhelmed by the abundance of information about MBA programmes, which could be contradictory and perplexing, it might be difficult for candidates to focus on the options really suitable for them. Indisputably, the rankings are one of the most popular guidelines that both applicants and employers consider when they form their views about the value of the MBA as a whole. Looking at them as the sole source of information about the quality of programmes, however, is a double edged sword and hardly serves the needs of prospective students. The best way to read rankings is with a critical attitude and an awareness of their own limitations. They rely on statistical data from schools and alumni that is imperfect and cannot reflect all aspects. Their own methodology also has some specifics that tilt the balance towards certain requirements at the expense of others, and also does not encompass the entire picture.
The MBA ranking industry started its rise in 1977 with the Carter Report, the Ladd & Lipset Survey and the MBA magazine. The phenomenon was noticed by the mass media, and in 1988 Business Week published its first ranking. As everybody takes them into account, they are a powerful opinion-making mechanisms – this is a credit that can undoubtedly be given to them.
They do contain valuable information about the programmes. As a source supplementing the web pages of business schools they might be looked at as useful tools, as they include valuable summarised data. By taking a cautious approach one could make an easier comparison between different institutions. The key is to see them as just one of the factors influencing your decision where to study, rather than as the most important one.
The problems with rankings
Paradoxically, one of the problems inherent to rankings is their huge clout – they have accumulated enormous influence over how applicants form preferences, which has contributed to the creation of biases. As a self-fulfilling prophecy, rankings are thought of as important mainly because of the fact that they are perceived as impartial, objective and significant. “The general problem with most rankings is that they measure what is easy to count, largely statistics on average GMATs and GPAs, starting salaries and bonuses, rather than what really matters”, writes John A. Byrne, who started the first big media ranking at Business Week in 1988. “The latter is harder to get at, but essentially what is more important is whether you think the cost of the degree is worth the time and effort”, he adds.
Another reason to consider them critically is the fact that they are not able to reflect the needs of the concrete student. “Ranking data does not match your personal requirements and your individual definition of business education”, says Professor Ashok Som, associate dean of the Global MBA at ESEC Business School. In his opinion, ranking is a necessary evil for business schools, but he doesn’t believe that it measures the subjective values of the school. “The rank is how good the fit is between the school and the criteria defined by the media publication, not necessarily how good the school is.”
Their interesting characteristic is that by making them, the media sends a subtle invitation for advertisements to business schools and other organisations and declares itself an active participant in the MBA industry. Some schools, in their desire to join the game, are ready to change themselves not in accordance with educational standards but with ranking criteria in order to appear at a higher place. Andy Holloway of the Financial Post gives an example of how that could be done: “A school could bring in a lot of international students who don't make a lot of money and then help them find jobs on London's Square Mile or New York's Wall Street, giving them a large starting salary and a huge pay difference from their pre-MBA days. A school could also hire more professors from around the world or start teaching in two languages.”
Methodology of rankings
The most respected rankings are those of The Financial Times, Forbes magazine, The Economist, Business Week, The Wall Street Journal and US News & World Report. We will review the methodology of some of them.
The ‘weighted salary’ of MBA graduates carries 20 percent of the ranking’s weight and ‘salary increase’ another 20 percent in the Financial Times Global MBA rankings. They took account of three years of professional experience of former MBA students. The year 2012 accounts for 50 percent of the rankings results, and 2011 and 2010 for 25 percent each. The other components include international mobility at 6 percent of the weight (if before starting the degree students worked in other countries and the place where they are currently employed), FT doctoral rank at 5 percent and faculty with doctorates at the same percent. 10 percent of the rankings results depend on the number of articles published by faculty members in a list of 45 prestigious journals. The leader in this year’s list was Stanford Graduate School of business, which was fourth last year. An increase in the salaries of graduates contributed to this result. Stanford is followed by Harvard and Wharton. London Business School is ranked fourth. The most impressive advance in the last ranking was that of the debutant Chinese University of Hong Kong, which skyrocketed straight in at number 28. 9,466 graduates and 150 schools participated in the 2012 Financial Times survey.
Forbes has a biennial ranking that is based on return on investment only. The magazine studies the last five years of graduates’ salary and the opportunity cost for their period of study. It makes three MBA rankings. The first is for two-year US schools, where Harvard, Stanford and Chicago (Booth) occupied the first three places. The second is for non-US one-year schools, where IMD, INSEAD and IE Business School were the top three. London Business School, Manchester Business School and IESE were ranked as the best three non-US two-year schools. In its last rankings Forbes surveyed 16,000 MBA alumni at more than 100 schools around the world. About 4,800 graduates replied.
Business Week’s biennial rankings are formed from the opinions of students weighted at 45 percent and corporate recruiters with the same weight. Publications in academic journals form an indicator called ‘intellectual capital rankings’ that accounts for the remaining 10 percent. The first three schools ranked by the magazine were Chicago (Booth), Harvard and Wharton. For the last 2010 Business Week list, 680 recruiters and 26,389 alumni were questioned.
The Economist determines which programme is best by measuring new career opportunities that it creates at 35 percent of the final result, personal development and education experience also at 35 percent, increase in salary account at 20 percent and networking potential at 10 percent. Tuck School of Business was first according to this ranking, Chicago (Booth) second, and IMD third. A total of 115 schools and 17,770 graduates and students participated in the 2011 study; 80 percent of the data was based on information provided by schools and 20 percent by students and alumni. A weighted average of 2011 at 50 percent, 2010 at 30 percent and 2009 at 20 percent was used for completing the list.
Doing your homework
Our advice is to study the methodology of rankings carefully in order to find out what exactly stands behind the numbers. Don’t rely on lists that don’t disclose information about their methodology. The difference between the positions of schools in the rankings depends on what indicators the different media consider most important for evaluating them. However, you should ask yourself if these match your own criteria. Rankings shouldn’t be used as an excuse for skipping the mandatory study of the most appropriate schools for you.
A good attestation of the quality of a school is its ability to remain relatively stable in the rankings top 10, top 20, top 30, etc. All MBA programmes in the first top 100 are very good, provided that they were there in previous periods. Always compare the standing of a school in the last ranking with its position in the previous ones. Too high a volatility could be due to a sudden change in the answers provided by alumni, employers and schools but also to other factors. Over the years there have been some cases of shooting stars – schools that appear in good positions, only to sink without a trace over the next couple of years.
But if rankings are not good criteria for objectively assessing a school’s value, what is? By no means avoid rankings, keep yourself informed by reading them. One thing that the Access MBA Guide recommends you take more seriously is the accreditations of schools. They are more reliable tools for evaluating the quality of education. Accredited schools are certified that they apply certain academic criteria. The Association of MBAs (AMBA), EQUIS, managed by the European Foundation for Management Development (EFMD), and the Association to Advance Collegiate Schools of Business (AACSB) are the three main agencies that put a hallmark (or choose not to) on the actual schools. The accreditation makes the school more recognisable to students, but also obliges it to keep high standards. “Accreditation”, says Tony Gibbs, Professional Development Programme Director at the Business School at Oxford Brookes University, “can make a considerable difference to students who must choose from a vast array of programmes on offer worldwide, and although it is not possible to quantify the accreditation’s contribution to recruitment, what is certain is that the demand for the programme has remained strong in the face of increasing competition at home and abroad.”
MBA candidates need to individualise their approach to the degree when applying. Just because a school is number one according to two prestigious rakings doesn’t make it best for the needs of the student, his needs and intellectual profile. Applicants should find the best schools for them, rather than rely blindly on rankings. It is vital to have an idea which programmes are tailored for your personal career path and goals, experience and personal interests. Without following this norm the overall success of your MBA journey is left to the hands of chance.