The University of Chicago’s Booth School of Business reclaimed the top ranking today (Oct. 4) in The Economist’s 2012 list of the world’s best business schools. Chicago, which placed second last year, pushed aside Dartmouth College’s Tuck School, which topped the ranking in 2011.
It is the third time that The Economist has ranked Chicago first in the 11 years of ranking the best full-time MBA programs. Booth was at the top of the list in 2010 and in 2007.
The Economist originally reported that the University of Virginia’s Darden School came in second, followed by No. 3 Tuck, No. 4 Harvard, and No. 5 Columbia Business School. But within 24 hours, the magazine acknowledged it had made an error in calculating its 2012 ranking and switched out Darden for Tuck and Tuck for Darden (see Oops! The Economist Fixes Its New Ranking).
The Economist said that Booth moved into first largely on the basis of its ability to open new career opportunities for its graduates. “In this regard, Chicago has few peers,” the magazine claimed. “Its graduates find employment in the widest range of industries; its students gushed about its careers service when marking it for The Economist.”
CHICAGO BOOTH MBAS SAW INCREASES OF 63% ABOVE PRE-MBA SALARIES
According to The Economist, the average salary of new graduates at Chicago was $113,217—well below the $127,189 achieved by MBA graduates at Stanford University’s Graduate School of Business or the $121,785 achieved by MBAs at Harvard Business School. But Booth MBAs reported a 63% increase on their pre-MBA salaries versus a 56% premium for Stanford grads and a 44% increase for Harvard MBAs.
It was a non-U.S. school, however, that scored the biggest gains over pre-MBA pay in the top 25. According to The Economist, graduates of the University of York’s Schulich School, ranked 16th overall, reported the highest pay increases—a whopping 165% over what their graduates earned before getting the MBA degree. IESE of Spain, ranked ninth overall, also scored high, reporting an increase of 153%.
According to The Economist, Chicago Booth scored first in three key dimensions of its ranking: opening new career opportunities, the diversity of recruiters on-campus, and student assessment of the careers service. The school ranked fifth in “personal development and educational experience” and sixth in both faculty and student quality. Booth did less well on some other measures, notably its alumni network. The Economist ranked Booth 41st on the “breadth of its alumni network,” 31st in “alumni effectiveness,” and 20th on the “internationalism of alumni.” In contrast, the Tuck School ranked first in “alumni effectiveness.”
Common to many MBA rankings, compensation and placement loom large in The Economist’s methodology, accounting for 38% of the ranking’s weight. Alumni opinion is another key ingredient, representing nearly a quarter of the final results. Along with The Financial Times, The Economist is the only other major ranking organization that purports to measure the quality of full-time MBA programs all over the world. It’s also the only ranking for which surveyed students give input on weightings, which are changed slightly from year to year
EVERY SCHOOL IN THE TOP 25 WAS EITHER IN THE NORTH AMERICA OR EUROPE
This year, North America and Europe accounts for all the schools in the top 25. The highest-placed school from outside those regions is the University of Queensland, at 27th. The highest placed Asian school is the University of Hong Kong, which ranks 41st. The biggest winner in this year’s ranking was Indian Institute of Management in Ahmedahad, India, which jumped 22 places to rank 56th this year, from 78th last year. The biggest loser? Both Vierick Leuven and University College Dublin’s Smurfit’s School plunged 25 spots to rank 66th and 63rd, respectively (see Winners & Losers In The Economist’s 2012 MBA Ranking).
While all rankings are somewhat controversial, The Economist’s is especially so—largely because year after year it tends to be filled with many counter intuitive results. Despite Schulich’s impressive 165% returns over pre-MBA pay this year, for example, the school surprisingly plunged seven places in The Economist’s ranking to ninth from 16th a year earlier. The Economist does not explain why schools go up or down in any given year and also does not publish the underlying index numbers to allow users to see how close one school is versus another.
Over the 11 years that The Economist has published its rankings, Harvard, Stanford and Wharton—widely regarded as the top three business schools in the world—have never been ranked first by the magazine. In fact, Harvard has been rated as low as 13th by The Economist, Stanford as low as eighth, and Wharton as low as 21st.
KELLOGG RANKS 20TH ON THE 2012 LIST
Indeed, many of the best U.S. schools commonly are ranked below European institutions that most business school observers believe are not nearly as good. The reason: An international bias that gives an 11% weight to criteria at which non-U.S. schools will excel (citizenship diversity, ratio of students to foreign alumni chapters, and the number of foreign languages offered. As a consequence of these metrics, Northwestern University’s Kellogg School of Management was ranked 20th this year behind No. 16 York, No. 14 HEC Paris, No. 12 London, No. 10 IMD and and No. 9 IESE. The No. 25 University of Bath’s School of Management also is ranked higher than No. 26 Yale’s School of Management or No. 29 Duke University’s Fuqua School.
Immediately, there was some controversy over the data The Economist used to rank business schools. A spokesperson for the Tuck school, for example, believes there was “an obvious error in Tuck’s rank for faculty quality. The rank shown (>100) is simply not possible given the data we submitted (and the facts). This rank is then part of the rank for Professional Development and Educational Experience and ultimately the overall rank.”
The Economist ranking is based on an initial selection of 135 leading business schools around the world. All 135 schools were invited to take part in a two-stage survey, which requires input from schools and students/alumni. Of these, The Economist said it was unable to rank 17 schools, either because the failed to respond to the survey or did not provide enough data to be ranked. A total of 15,550 students and graduates participated. The global top 100 schools were gleaned from the remaining 118.
Yet another drawback is that The Economist uses year-old data to crank out its results from the Class of 2011, even though schools are now releasing data on the Class of 2012. This is due to the time the magazine begins collecting data for the annual ranking. Bloomberg BusinessWeek, whose latest ranking will be published in early November, will include Class of 2012 salary and placement data, though BusinessWeek does not rank on the basis of pay or placement.
(See following page for The Economist’s ranking of top schools over the years)