Who’s the B-School King of Finance?

by John A. Byrne on

Wharton's Locust Walk on a recent fall day.

The finance departments of both Cornell University’s Johnson School and the University of Texas’ McCombs School of Business tumbled six places today (March 15) in U.S. News & World Report’s new 2011 ranking of the best B-schools for finance. It was the steepest fall of any of the 28 schools on U.S. News’ specialty ranking for finance.

Cornell dropped to 24th from 18th place last year, while Texas fell to 21st from 15th in the finance discipline ranking. Yale’s School of Management also lost ground in finance, down four places to a rank of 17th from 13th in 2010. Indiana University’s Kelley School of Business also fell four spots to 24th from 20th last year.

Wharton, Chicago and New York University retained their No. 1, 2 and 3 places, respectively. No. 4 Stanford slipped ahead of No. 5 Columbia Business School, which had the four spot in 2010. Harvard Business School, according to U.S. News, fell two places to a rank of 9th in finance, from 7th last year.

The U.S. News specialty ranking in finance–released along with the magazine’s overall ratings of the best business schools–is based entirely on a poll of deans and MBA program directors. U.S. News asks B-school administrators to name and rank the finance departments of the schools, even though they are likely to have no direct knowledge of these programs. Respondents then are largely selecting schools on the basis of their overall reputations in a given field–and they will likely name their own schools on the survey even if they don’t deserve to be there (see story on overall rankings biggest winners and losers.)

This flaw was highlighted recently by New Yorker staff writer Malcolm Gladwell in a scathing critique of the U.S. News methodology for its overall ranking of colleges.The longer the list, the thinner this data gets–leading to some odd results. The finance ranking points up the problem: Tied for 24th place are two of three business schools–Seattle University in Seattle and St. Joseph’s University in Philadelphia–that never make more credible lists of the best business schools.

Nonetheless, the U.S. News poll is a proxy for the general reputation and image of a school in a core teaching area and worth some bragging rights. And of all the disciplines taught at graduate business schools, finance usually reigns supreme. It’s where most schools put the single largest chunk of their resources, from faculty to the courses in the catalog. After all, finance is the language of business, and so even this flawed ranking of the best finance departments at U.S. business schools is worth a look.

The biggest year-over-year winners on the list? Ohio State University’s Fisher School of Business had the largest gain, moving up six places to 17th from 23rd last year. Carnegie Mellon’s Tepper School rose three spots to finish 13th, up from 16th a year earlier.

There are five new schools on the list: No. 14 Fordham University in New York, No. 17 Loyola University in Chicago, No. 21 Creighton University in Omaha, No. 24 Seattle University in Seattle, and the No. 24 University of Florida in Gainesville. Two schools dropped off the list from last year: No. 23 Xavier University’s Williams School of Business and No. 25 Loyola Marymount University (see next page for complete rankings and year-over-year comparisons).

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  • Matty

    The FT also has specialty rankings; you can find them on page 40 of the massive PDF Global MBA 2011 Report. What’s interesting is that only 4 schools (!!) of the top 10 in Finance cross over between the two rankings (though the FT’s does contain two non-US schools in that top 10).

    The top 3 are the same – in a different order – but after that craziness ensues. Just further confirmation of the, shall we say… “unconvincing” nature of rankings…

  • Arthur Featherstonehaugh Dullsworth

    Not to be vulgar, but all that’s changed is there’s a somewhat different masturbation fantasy playing over at USNews. Is Wharton different? Is Texas different? Cornell? Yale? No! And what’s more, the finance curriculum is a commodity — the faculty of all those schools have PhDs from the best grad programs and all of them publish their brains out in the best journals. The same kid will learn exactly the same stuff (advanced Excel for Mammon worshippers) wherever he goes. In accounting, some things represent real economic events and others represent a change in estimate. These zigs and zags in “the rankings” have no meaning whatsoever. No more than a change of estimate in accounting.

  • TE

    is there a similar ranking for strategy consulting?

  • http://poetsandquants.com/members/jbyrne/ John A. Byrne

    TE,
    Not for strategy consulting per se, but for management. The top ten schools in management, according to U.S. News’ new ranking: Harvard, Stanford, Northwestern, Wharton, Michigan, Tuck, Berkeley, Virginia, Duke, and Columbia.

  • Haque

    John,

    I thought UVA had a great finance faculty, I am quite surprised it is not on this list.

  • haque

    Could someone please advise me about finance at Darden, I got a full ride to Darden, but no money to Columbia. Its quite tempting. Advise please. Pros? Cons?

  • http://poetsandquants.com/members/bschool13/ bschool2013

    Hague:

    I would take that full ride in a heartbeat! I visited Darden earlier this month and while I can’t speak to the faculty, I will say the students I spoke with all seemed to be killin’ it with good finance internships or full time jobs. Same goes for Cornell. The point I’m trying to make is that these top schools all have access to top jobs. (For the record I’m interested in marketing, my view may be different than someone pursuing finance)

    I think you should compare other factors besides one magazine’s ranking of the finance departments, such as:

    1. Charlottesville, VA vs. NYC?

    2. Going to school for the cost of living expenses vs. $100K+ debt? (which by the way, cost of living much lower in C-ville than NYC)

    3. Do I like the case method?

    4. Small student body vs. larger student body?

  • http://poetsandquants.com/members/jbyrne/ John A. Byrne

    Hague,

    All good points. A free ride to Darden, I think, is not something I would turn down–not to go to Columbia and pay full freight.

  • Haque

    Yes,

    by full ride, I mean full tuition.
    thank you for your advices.

  • MBAClass2013

    John,

    I am looking pursue a career in buy-side investment research/management and applied to a number of schools for the class of 2013. I was accepted to Michigan (Ross) with no scholarship and Carnegie Mellon (Tepper) with a little $$. Advise please.

    Thanks

  • Cordial Savage

    I’m a student at Creighton University in Omaha. I’ve been working my way through the graduate finance program. It’s called the Masters of Security Analysis and Portfolio Management (MSAPM). Certainly not titled for the sake of brevity. I was a little surprised by the program landing in the top-25, but I will say it has been a great program so far. The classes come from the CFA Institute’s curriculum, and all professors in the MSAPM program have the CFA designation. Smart guys, great professors. They clearly know the information inside and out. It’s tough juggling these difficult classes while working full time, but I’m able to apply it in work.

    I’m really surprised Creighton made this list but Wisconsin’s ASAP finance program didn’t. I was under the impression that they’re ultimately very similar.

  • Bieber

    @John Byrne: I was curious what makes you say that finance is the language of business. I’ve always heard that accounting is the language of business. Accountants determine what happened and translate it into numbers, and then the finance guys crunch the numbers and decide how to optimize the situation. Right?

  • http://www.pcci-inc.com BoothGrad1999

    There is a big missing piece to this Finance Department ranking by USNews.

    Wharton has kept its top spot with USNews for quite some time with its Finance specialty ranking ahead of the University of Chicago.

    What is puzzling is if USNews dug deeper into these two Finance Departments they would learn that a lion share of Wharton’s Finance faculty are University of Chicago PhD’s. I mean a lion share. It has been in this human capital portioning of Chicago PhD’s at Wharton’s Finance department for decades.

    From a bias point-of-view it can be seen that Wharton’s Finance department is a satellite campus of the University of Chicago.

    Wharton gets the “bling” and the University of Chicago does the heavy intellectual “lifting” for Wharton’s Financial brain power.

    This does not reflect well on USNews ability to truly analyze specialty programs.

    For a popularity contest Wharton is percieved better in Finance but from a more practical and practitional perception Wharton depends heavily on the University of Chicago.

  • Rebecca Black

    @BoothGrad: Are the specialty rankings based off of where the professors came from or who puts out the most research? Or are they based on the quality of the education you receive and the career prospects you have following graduation? I think its clearly the latter. While it might be a nice feather in the cap of Booth that many of its PhDs are teaching at top schools — and this may be anecdotal evidence of the overall quality of the education you receive at Booth — to say that this fact necessarily makes a fundamental improvement to my experience at Booth doesn’t hold water.

  • http://poetsandquants.com/members/jbyrne/ John A. Byrne

    Rebecca,
    Sadly, neither. U.S. News pulls together it’s specialty rankings from the magazine’s poll of deans and MBA directors who have no direct knowledge of what’s going on at other schools.

  • http://financetrainingcourse.com/ Finance Mentor

    Haque:

    Two comments on UVA versus Columbia. Each school has its own strengths in terms of curriculum and programs. Its not the core finance curriculum where the schools differentiate, its the electives. While Columbia has Mark Broadies (Security Pricing) and Bruce Greenwald (Value Investing), UVA has its own stars. I am a Columbia alum with friends on both campuses and I would agree that while NYC is NYC, a full ride is a full ride. Take the offer.

    Jawwad

  • MBAHopeful fall ’12

    John,

    I have been accepted to Booth and Columbia for the class of 2014. My background is corporate real estate advisory and brokerage with a top international commercial real estate services firm. My ultimate goal is to be in private equity – more likely corporate PE rather than real estate PE. Booth has offered an $80k merit-based scholarship and Columbia has not yet released any scholarship information.

    From talking with current and past MBA students, given my background, I will need to go into I banking for a period of time and perform well, before transitioning to PE. My question is how important is it to build more of a NY-based network at Columbia vs. receive, in my opinion, a better education and likely a higher scholarship at Booth. I also feel like Booth is a better fit for me from a culture standpoint.

    One last consideration: I am from the southwest and have a desire to get back to the southwest at some point in the future, but will obviously be in NYC (or possibly Chi or SF) for several years for banking and PE before returning. Any advice from others would be appreciated as well.

    Thanks.

  • http://poetsandquants.com/members/jbyrne/ John A. Byrne

    MBAHopeful,

    Take Chicago up on its very generous offer. It’s a fantastic business school and you won’t be disappointed. And because you know exactly what you want, you can leverage Booth’s faculty and alumni to land the perfect job from day one. Congrats and good luck.

  • FLA-D

    John,

    I was accepted to Booth and Columbia as well. I received about the same amount in scholarship from both (one year), but I also received a named fellowship at Columbia (Alexander Bodini Memorial Real Estate Fellowship). I am in real estate, and will either pursue real estate or private equity after school. In terms of quality and style of education, Booth seems to be far superior (especially for the long-term). However, being a “named fellow” at one of the top (not to mention ivy) real estate programs certainly has sex appeal. My heart and mind say Booth, but SHOULD they say Columbia?

    Just looking for a reality check; thanks!

  • http://poetsandquants.com/members/jbyrne/ John A. Byrne

    FLA-D,

    Wow. That’s a really difficult one, especially due to the real estate angle and the fellowship. Here’s the first thing you need to know that will set you’re mind at ease–at least somewhat. You can’t make a mistake, no matter what decision you finally make. These are two world class business schools, sensational in every possible way. I tend to favor Chicago largely for a number of reasons: 1) It has consistently ranked above Columbia, 2) The faculty is absolutely world-class and superb with more Nobel Prizes to its credit than any other B-school, 3) The quality of the teaching is far superior to Columbia, 4) The student body is more collaborative and collegial, 5) The facilities are significantly superior to Columbia’s current building and that impacts everything from your ability to get a group study room with your learning team to wanting to hang out in the open space and connect more deeply with your classmates, 6) The support staff and infrastructure support that will make your two-year experience both hassle free and encouraged is also better, 7) Chicago is thought by B-school deans to be better in finance than Columbia (in the latest U.S. News poll, for example, Chicago is ranked second behind only Wharton, while Columbia is ranked fifth in finance), and 8) The Chicago alumni network is slightly stronger and more cohesive than Columbia’s. These impressions are based on survey data, school statistics, student, faculty and administrative interviews, and personal visits to both schools over many years.

    But let’s not make this choice so easy by loading up on Chicago’s advantages over Columbia. Bear in mind that though Chicago is better than Columbia on these points, the difference in how much better may not be different enough. In other words, it’s not that Columbia is mediocre or poor on these measures. It’s just that I believe Chicago is better. Sometimes, those differences are quite slight and could very well be meaningless to you, given your own personal preferences and career goals.

    And as I have said before, Columbia’s singular advantage (at least in comparison to Booth) is New York City and its proximity to the world financial marketplace. That is, however, a very big advantage. It means that there are more lectures from hot shots on Wall Street and presumably, the PE field. It means that more adjuncts are practicing financial players. And it means you are in the backyard of the region of the country that you’ll most likely end up in, given your career interests. It also needs to be said that Columbia has a center in real estate with some terrific faculty teaching in the subject, including a former Goldman Sachs partner. Chicago has no center.

    Not sure where all this ends up. But it’s all worth pondering. Let me say one thing again: You can’t make a bad decision here. I honestly believe you’ll be happy with the education you receive at either school. And in any case, congrats on getting into these great MBA programs and getting financial support to boot. It says quite a lot about you.

  • FLA-D

    @ John: I sincerely cannot thank you enough for your prompt response. My wife and I are beyond appreciative of your analytic comparison of the two programs as we make this decision at the 11th hour. This decision-process has been a roller-coaster ride, with so many factors to weigh, and highly emotional stakeholders to consider. Ultimately, I feel I have to go with my gut – BOOTH. Also, please know how much I respect Poets & Quants; you provide an amazing resource to all of us trying to better navigate through all things MBA–thanks again!

  • http://poetsandquants.com/members/jbyrne/ John A. Byrne

    FLA-D,

    Thanks for your kind comments. They’re much appreciated. Best of luck to you and your wife. As you already know, Chicago is a great city. You’ll both have a wonderful time there.

  • MBAHopeful fall ’12

    Fla-d,

    Was just wondering if you paid your deposit to Booth and/or Columbia. Drop me a note, as it sounds like we are in similar positions and looking to do the same thing post b-school.

  • FLA-D

    Hey MBAHF’12, I put down my deposit at Booth, but not Columbia.  This may be a bit late (don’t ask why I even revisited this page), but If you want to chat about the decision, try getting in contact with me via the incoming student directory.  If you search under “Dallas,” I am the last listed full-time admit (alphabetically), and the only male full-time in a real estate related field (the best I can tell).  I hope to see you in the fall!

  • John

    John do you have the finance rankings for 2012 by US news, 1-25 ?

  • JohnAByrne

    Sure. Just wrote this up because of your request:

    http://poetsandquants.com/2012/03/20/wharton-chicago-nyu-best-for-finance/

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