2012 Financial Times Ranking of the Best B-Schools

The 2012 Financial Times Global MBA Ranking

Source: The Financial Times 2012 global MBA ranking

No ranking of MBA programs is without flaws, but the Financial Times methodology is especially peculiar among the most popular rankings of business schools. The FT uses a mix of 20 different criteria, including many that what could be considered “politically correct” metrics that have little to do with the actual quality of an MBA program. For example, the FT ranks schools on such factors as the percentage of women students and faculty, the number of women on a school’s advisory board, the percentage of international students and faculty, the number of extra languages required to be spoken at graduation, and the percentage of international directors on a school’s board. It also includes such things as the percentage of faculty with PhDs as well as the number of doctoral graduates from a school and how many take up jobs with the school that awarded their degree. What any of this has to do with the quality of the MBA or the MBA experience is open to question.

The single most important metric in the Financial Times methodology is pay. Just two out of the 20 criteria measured, “weighted average salary” of alums three years out as well as the “salary increase” for those same alums above their pre-MBA salaries, accounts for 40% of the weight of the methodology. This information, moreover, is voluntarily reported by alums in a survey to the FT that every respondent knows will be used for ranking purposes. The result: it’s possible that these numbers are exaggerated by respondents to help their alma maters.

Another worrisome matter is how the FT manipulates the actual salary numbers in an effort to create a level playing field from one country to another by adjusting them using the World Bank’s purchasing parity power index. The result: all of this pay data, accounting for the largest single weight in the ranking, is significantly inflated in poor countries that lead to many distortions. Indeed, it’s not uncommon for relatively inexperienced candidates whose salaries are well below U.S. and European standards to enter most of the Asian schools on the Financial Times list. So their “adjusted” increases in pay three years after graduation are often inflated when compared to the increases of U.S. graduates who have three to five years of work experience and are often paid four to five times what Chinese and Indians are paid before business school.

(The next 25 best schools are on the following page)