The Strange Math In The FT Ranking

The practical effect of all this hocus pocus? Go back to the FT’s ranking in 2008 when India’s Indian School of Business, then only six years old, debuted on The Financial Times’ list ranked 20th–ahead of such legendary business schools at Northwestern University, Duke University, the University of Virginia, and the University of North Carolina. How sensible was it for a six-year-old school without a diverse group of students or faculty, whose graduates land jobs with salaries that are in actuality only a quarter of the grads from these top schools, to be ranked that high on the FT list?

This year, the Indian School of Business is still at a rank of 20, ahead of No. 24 Cornell University, No. 26. Cambridge, No. 29 Michigan, No. 32 UCLA, No. 35 Carnegie Mellon, No. 38 Virginia, No. 40 Emory, No. 42 SDA Bocconi, No. 43 Georgetown, No. 51 UT-Austin, No. 56 UNC, No. 68 Western Ontario, among many others. And this is after ISB fell seven places from a rank of 13th last year!

Or consider the Indian Institute of Management, which The Financial Times ranks 11th in the world this year, ahead of No. 12 Chicago Booth, No. 13 IMD, No. 14 UC-Berkeley, No. 15 Duke, and No. 16 Northwestern, among others. According to the FT, the average salary of an IIM grad three years out is a remarkable $175,076!

One astute commenter on the BusinessWeek forums explains it this way: The PPP conversation index considers each country as a whole. “Since the average Indian is a lot poorer than an average ISB MBA candidate, the index ‘inflates’ the earnings of the MBA relative to the local population, but turns into an advantage as far as global rankings go.”

None of this is a knock on ISB or IIM, which have both accomplished a great deal in a very short period of time. But it is a knock on the methodology of an influential ranking that is especially followed by many in Europe and Asia. Manipulating the compensation numbers provided by alums may make for a more interesting list of ranked business schools. But it doesn’t make for a credible ranking.

 

DON’T MISS: THE BIG WINNERS & LOSERS IN THE 2012 FINANCIAL TIMES’ GLOBAL MBA RANKING or THE 2012 FINANCIAL TIMES GLOBAL RANKING OF THE BEST MBA PROGRAMS

Questions about this article? Email us or leave a comment below.