Ranking the rankings

The Financial Times (FT) published its first MBA rankings in 1999, setting off new waves of competition among MBA programs – as well as and new competition among the publications that provide the rankings

In less than 10 years, a number of newspapers and magazines have entered the fray, among them: BusinessWeek, Forbes, US News & World Report, the Wall Street Journal and the Economist Intelligence Unit (EIU). Taken together, their evaluations of over 500 MBA programs worldwide – evaluating everything from post-graduation salaries to class size – offer prospective MBA students more information and statistics than ever to sift through.

Judging classes

To many, however, the FT is still ranked first among the rankings, due in large part to the broad range of its methodology. Whereas other rankings methods weigh customer satisfaction and recruiter feedback heavily when crunching the numbers, the FT evaluates more than 20 different criteria, such as diversity of the student body and the makeup of the school’s faculty.

The financial success of alumni is another major indicator of a school’s value.

“The Financial Times puts a lot of weight on how much a student’s salary improves after graduating,” said Lydia Price, MBA program academic director and associate dean of China Europe International Business School (CEIBS), which placed 11th in the FT’s 2008 ranking.

Another difference between MBA rankings is their scope. The FT and EIU rankings line up US and non-US MBA programs head-to-head, whereas other rankings retain a strong US-based program bias. BusinessWeek and the Wall Street Journal both rank US business schools and then provide a separate section on “international schools,” evaluating them in a different manner.

A student interested in US programs – where the majority of the world’s business schools are located – may find the details of such US-focused rankings more useful.

“All are fine publications and have different criteria for their rankings,” says Tom Petersen, director of the USC Marshall global executive MBA at Shanghai Jiaotong. “[Any rankings’] impact would depend on the target audience of the MBA program.”

Staying balanced

In a January 2007 article in the FT, the newspaper stressed that all MBA rankings are tools to be used and that no one ranking can provide a student with all of the information needed – its own ranking system included.

In line with this thinking, along with its annual MBA rankings, the FT has also devised a separate list that combines schools’ rankings across five top publications. These results, reflecting a broader base of research, seek to “give a real snapshot of those schools that perform well across all the publications,” according to the article.

Another media outlet, the EIU, hired an independent consulting firm to evaluate its ranking methodology in 2002. The firm, Whitehead Mann, agreed that fact-based criteria used in ranking schools – such as graduation rate and student body size – were both “relevant and unexceptionable,” but said the responses to certain questionnaires given to students and alumni could be very subjective and “entirely dependent on personal benchmarks” of the respondent.

The EIU’s scores for MBA teachers, for instance, drew heavily from questionnaires asking students to evaluate their professors ranging from “excellent” to “very poor.”

In the end, Whitehead Mann recommended EIU raise the minimum number of questionnaires required for a school to qualify for the rankings to increase the weight given to final salary in the professional world.

Yet, despite their imperfections, rankings remain a major force in the MBA domain, offering credibility and name recognition for schools around the world.

“One measure of [the] impact of the FT rankings on CEIBS is that the volume of applicants from outside China has really soared in recent years,” said Price. “Many of our applicants from Europe, the US, India, Latin America and beyond did learn about CEIBS through the FT ranking news.”