Looking at the proliferation of business school rankings may make you feel like you’re staring down an IRS tax form. They’re complex, constantly changing, and often confusing. In fact, there are now more major business school rankings than major accounting firms. So why are there so many different rankings? What is the school ranked and why? Administrators and faculty are often asked these questions. The problem is, the answers are not simple and are rarely consistent over time. Nonetheless, examining the fine print and contrasting the perspectives of some of the most prominent rankings provides some answers and valuable insights.
HOW IT ALL STARTED
To begin, it’s essential to understand that b-school rankings almost always refer to a school’s MBA program. Many business schools offer only an MBA at the master’s level and as a result, the rankings of these popular programs often characterize the entire school. All references to b-school rankings in this article are, in reality, MBA program rankings.
Almost a decade before U.S. News & World Report published its first ranking of business schools, three other organizations were already attempting to measure b-school quality. In 1977, the Carter Report, the Ladd & Lipset Survey, and a survey by the now defunct MBA Magazine all appeared. Carter ranked schools on the frequency that faculty published in academic journals. Ladd & Lipset asked faculty which schools they thought were best. And, MBA Magazine asked deans to vote on the best programs.1
These early attempts to measure b-school performance were not widely publicized and went largely unnoticed. However, the introduction of the U.S. News rankings in 1987 and Business Week rankings in 1988 forever changed the landscape—marking the beginning of a media frenzy that continues today. Reasons for the proliferation of published rankings include: 1) the dramatic growth in business school enrollments, 2) the creation of new business schools and MBA programs, 3) sensationally high starting salaries for MBA graduates, and last but not least, 4) the ability of such articles to boost the circulation of magazines and newspapers.
COMPETITION
While most business school administrators and faculty agree the rankings are not a particularly good measure of a school’s ability to educate students, most agree the rankings have infused competition and dramatically increased the pace of change at top business schools. Many schools have made significant improvements in their programs, allocation of resources, and responsiveness to the market. The rise of the rankings in the 1980s forced b-schools to not only research and teach competition but also to confront it.2
Along with an infusion of competition, the advent of the rankings has given prospective students easier access to and more detailed information about their business school options. Not only is there more information to help make decisions but also online tools that make comparisons between schools rather easy.
Likewise, corporate recruiters have access to the same information when deciding where to interview rising stars. They can see how other recruiters rate top schools on students’ communication skills, ability to work within a team, and analytical and problem-solving skills. They also single out a few “hidden gems—less-heralded schools with great graduates.”3
MAJOR RANKINGS
The big five news organizations publishing rankings information are U.S. News & World Report, Business Week, Forbes, Financial Times, and The Wall Street Journal. Each of these organizations see b-school rankings both as a business and as news.
As a result, they each target a specific audience, approach the rankings from a different angle, employ a unique methodology, and have varying impacts on management education. While each of the rankings examined in this article claims to list the best business programs, a close examination of their methodology shows they value and measure very different things.
U.S. News & World Report
Broad readership, large circulation, and a first-mover advantage have made U.S. News & World Report one of the most influential players in the rankings business. This popular news magazine not only ranks business schools but also sizes up education; engineering; law; health and medicine; and science and the humanities. Its rankings focus on placement success, student selectivity, and surveys of b-school deans and recruiters.4
Business Week
Long touted as a customer satisfaction rating, Business Week focuses on: “the graduates, who trade their suits for backpacks; and recruiters, who seek out the best and brightest from among the business school’s ranks.”6 However, the magazine seems to be changing its game. In 2000, Business Week added a new component, “intellectual-capital,” a factor determined by the frequency and length of faculty publications in scholarly and professional journals as well as authorship of popular business books. Bonus points were given for books appearing on the magazine’s best-seller list.7
In addition to their unique focus on students and recruiters, Business Week categorizes schools into three tiers. Only first-tier schools, one through thirty, are rank ordered. The magazine also dedicates a special section to schools that offer the quickest and slowest payback to students.8
Forbes
True to its investor-heavy readership, Forbes’ b-school rankings are determined exclusively by how long it takes students to recoup their investment in an MBA program. Return on investment (ROI) is calculated by comparing the cost of attaining an MBA—foregone income and tuition—with MBA salaries five years after graduation.10
Forbes devotes little space and marketing to its rankings. As a result, the magazine’s evaluations are not as well known and may carry less weight than others mentioned in this article.
Financial Times
The only non-U.S. publication and the only one printed on orange paper, Financial Times takes a decidedly international approach. Unlike most U.S. publications, the London-based paper lumps all MBA programs together in its list of the top one hundred full-time international MBA programs. As might be expected, a large number of the schools in this survey, 44 percent, are non-U.S. schools.
Although it didn’t join the rankings frenzy until 1999, Financial Times gained some respect for using the most complex formula to determine its rankings. The paper considers twenty factors that range from the percentage of female advisors at a given school to career progress and graduates’ salaries three years out.
12
The Wall Street Journal/Harris Interactive
The Wall Street Journal was last year’s rankings rookie. The influential paper teamed up with market researcher Harris Interactive in 2001 to carve out its own piece of the rankings media pie. They’ve given their ranking a unique flavor by focusing exclusively on recruiters and the experiences they have with b-schools and graduates.
The paper took a risk with its first published rankings by finishing traditional favorites such as Wharton, MIT, and Stanford all out of the top ten. Stanford, for example finished forty-fifth, well behind the University of Rochester, NYU, and UCLA. The journal said, “Recruiters complained that graduates of some of the most prominent schools expect too much too soon in terms of salary and position and are difficult to retain for very long.”14 The journal is set to release its second round of rankings this fall.
WHERE THE NUMBERS FALL SHORT
While useful in drawing comparisons between programs, what the numbers don’t reveal is how well a school infuses knowledge in its students. The problem is that it’s very difficult to quantify learning.
As a result, the rankings tend to focus on ancillary measures of a school’s performance such as the quality of its placement services, the size of its doctoral program, the starting salaries of its recent graduates, and its name recognition.
Placement Services Catering to recruiters, The Wall Street Journal measures how well corporate representatives are treated by business schools. The paper reported, “[Schools] lost ground in the rankings because recruiters were so disgruntled about what they described as the arrogant attitude and lack of service from the placement office.”16 While an important part of placement, the handling of recruiters is not connected to what takes place in the classroom.
Doctoral Programs
Financial Times uses a large number of different factors to rank schools including how many doctoral candidates it generates.17 The assumption is that more doctoral candidates means better research. This may be true, but it doesn’t measure how well new research and knowledge is transferred to students. Many schools with large PhD programs put less experienced doctoral candidates in the classroom to free up full-time faculty for research.
Starting Salaries Starting salaries and salaries five years after graduation are probably a good indicator of a graduate’s market value—determined not only by his or her MBA education but also by prior education and work experience. Salaries, however, are stratified by industry. Thus, schools that focus more on investment banking and management consulting, typically the highest paid fields, have higher average graduate salaries than schools focusing on other areas such as marketing, accounting, and human resource management.
Name Recognition All major news media rankings, except Forbes, are heavily influenced by surveys of academicians and recruiters. Most of those surveyed have had exposure to only a handful of schools and are not well informed about the programs and faculty. Therefore, the surveys tend to measure name recognition rather than substance. Much of what respondents know about other programs they’ve read in the media. Thus, the rankings become a self-fulfilling prophecy repeated, to one degree or another, year after year.
In summary, the ancillary measures employed by the news media to rank order top business programs provide some useful information in sizing up a program, but they do a poor job of measuring how well a school teaches.18
MARRIOTT SCHOOL PERSPECTIVE
Although we do not always agree with the published results, most Marriott School faculty and administrators recognize the value of participating in the rankings. From our own research, we know that both potential students and recruiters use the rankings to make key decisions regarding the school.
“I chose to come to BYU for reasons other than its ranking,” says Tyson Clark, a second-year MBA student. “But, if BYU hadn’t been on the radar screen, I wouldn’t have considered it a serious option.”
In addition, recruiters cite numerous reasons for coming to BYU such as past success with graduates, students’ integrity, and their strong work ethic.19 Nevertheless, many recruiters are constrained by company policies—often tied directly to the rankings—that dictate where they can hire and how much they can offer.
Taken altogether, we view the rankings as a means, not an end. The school is guided first and foremost by its mission and that of its sponsoring organization, The Church of Jesus Christ of Latter-day Saints. Our objective is to attract and develop men and women of faith who can become outstanding leaders in their organizations, churches, and communities.
This said, school leaders examine the fine print and feedback through a unique lens. Changes that we believe would make the school more competitive in the rankings are weighed against their impact on our mission.
Developing a PhD program, for example, would undoubtedly help the Marriott School advance in the rankings, but it’s impact on developing leaders would be minimal and very expensive. PhD programs require a very low faculty-to-student ratio and impact relatively few individuals. Similarly, chasing student selectivity measures, encouraging students to take high salaries, and giving faculty less time in front of students for the sake of the rankings would run counter to our mission.
Another strategy to pursue better MBA rankings would be to scale back or cut competing programs. The rankings disadvantage multiple-product organizations such as state schools and BYU, with its top-rated Master of Accountancy, service-oriented Master of Public Administration, and new Master of Information Systems programs—all of which serve important roles in fulfilling the Marriott School’s mission.
On the positive side, unsolicited rankings feedback has helped the school identify weaknesses and make strategic improvements. Survey data shared by several publications helped administrators realize the need to improve the school’s placement facilities and services.
“The rankings helped us convince the administration to put more resources in the placement effort,” said Ned C. Hill, dean of the Marriott School. “We converted half of the fourth floor of the Tanner Building into a world-class placement facility and hired additional staff. These measures have greatly enhanced our ability to place students with leading companies.”
Other improvements precipitated by recent rankings include: stricter work experience requirements, improved student access to MBA electives, and ongoing efforts to strengthen the school’s alumni network.
“When the rankings tell us useful information that can help us meet our objectives, we listen and react,” Hill says. “We don’t chase elements of the rankings that could divert us from our mission.”
THE BOTTOM LINE
Whether you’re thinking of going back to school, advising a relative, or just trying to hold your own at the office water cooler, knowing what the numbers really say will give you a clear advantage.
Each major publication has carved out its own rankings niche by focusing on the key measures it feels will be most valuable to readers. Understanding these different perspectives should be useful in sorting through the media frenzy generated each time a new ranking is unveiled.
The rankings are complex, change often, and can be confusing, but they’ve made more information available in an easier-to-use form than ever before. The introduction of new rankings is also having a leveling effect. Competition among news organizations for the eyes of students, recruiters, and alumni is decreasing the influence any one publication has on the process, making it easier for schools to pursue what they—and not the media—deem important measures of success.
ENDNOTES
- Martin Schatz. (1993). “What’s Wrong With MBA Ranking Surveys?” Management Research News 16, no. 7: 15–18.
- Kevin Corley and Dennis Gioia. (2000). “The Rankings Game: Managing Business School Reputation.” Corporate Reputation Review 3, no. 4: 319–333.
- Ronald Alsop. (2001). “The Winner Is… Dartmouth’s Tuck School.” The Wall Street Journal, 30 April, R4–R5, R8.
- Gayle Garrett, et al. (2001). U.S. News & World Report Best Graduate Schools (Washington, D.C., U.S. News & World Report).
- Ibid.
- Jennifer Reingold. (1998). “Crunching the Numbers: A Tale of Two Surveys.” Business Week, 19 October, 92.
- Jennifer Merritt. (2000). “Keeping Tabs on B-School Brainpower.” Business Week, 2 October, 100.
- Mica Schneider. (2000). “Want an 82% Pay Hike?” Business Week, 2 October, 96–100, 97.
- Jennifer Merritt. (2000). “It’s a Whole New B-Game.” Business Week, 2 October, 80.
- Kurt Badenhausen and Lesley Kump. (2001). “The Best Bang for the Buck.” Forbes, 15 October, 92–93.
- Ibid.
- Parminder Bahra. (2002). “Three Tests Determine Top Table.” Financial Times, 21 January, II.
- Ibid.
- Ronald Alsop. (2001). “The Winner Is… Dartmouth’s Tuck School.” The Wall Street Journal, 30 April, R4–R5.
- Joy Sever. (2001). “How the Schools Were Evaluated.” The Wall Street Journal, 30 April, R4.
- Ronald Alsop. (2001). “Keeping the Customer Satisfied.” The Wall Street Journal, 30 April, R10–R16.
- Parminder Bahra. (2002). “Three Tests Determine Top Table.” Financial Times, 21 January, II.
- Martin Schatz. (1993). “What’s Wrong With MBA Ranking Surveys?” Management Research News 16, no. 7, (1993): 15–18.
- Ronald Alsop. (2001). “Under the Radar.” The Wall Street Journal, 30 April, R8.
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Article written by Joseph D. Ogden
Photos by Brad Slade
About the Author
Joseph D. Ogden is assistant dean of External Relations at the Marriott School. His areas of expertise include media, alumni, and public relations; educational marketing; and strategic communications planning. Ogden is also an instructor for BYU’s Department of Communications and serves on the department’s National Advisory Board. Before joining BYU, he was director of corporate communications for Nu Skin Asia Pacific. Ogden earned his BA in communications from BYU in 1995 and his MBA from the Marriott School in 2001.
Additional research for this article was provided by Robert G. Gardner and Eric A. Atwood.
