For the second consecutive year, Harvard Business School stayed on top of Bloomberg Businessweek’s ranking of the best MBA programs. But there were some rather shocking results up and down the new 2016 list of the best business schools published today (Nov. 16).
The Jones Graduate School of Business at Rice University improbably jumped 11 places to secure a Top 10 ranking for the first time ever, bypassing such premium MBA brands as Northwestern University’s Kellogg School, UC-Berkeley’s Haas School of Business, Columbia Business School, and Yale’s School of Management.
UCLA’s Anderson School of Management fell nine places to a rank of 22nd, while UNC’s Kenan-Flagler Business School dropped seven spots to place 24th. For the first time ever, No. 18 Texas A&M’s Mays School ranked ahead of UT-Austin’s McCombs School of Business by three places, no less. Only three years ago, McCombs had a 19-place advantage over Mays, ranking 23rd to Texas A&M”s 42nd place finish. Mays, in fact, wasn’t even ranked by Businessweek until 2010.
TUCK HAS BEST SHOWING SINCE BUSINESSWEEK’S FIRST RANKING IN 1988
In all, 21 of the Top 25 schools experienced changes in their year-over-year ranks. Stanford’s Graduate School of Business climbed five places to rank second behind Harvard. Duke University’s Fuqua School of Business, which was Businessweek‘s top winner in 2014, rose five spots to claim third place. Dartmouth College’s Tuck School of Business, was up nine places to rank fifth, its best showing since 1988 when its MBA program was ranked third best.
It was a surprisingly disappointing year for the schools that have most won the top prize from Businessweek over the years. Northwestern University’s Kellogg School of Management and the University of Chicago’s Booth School of Business have both been number one in this survey five times each. But this year, Booth slipped two places to finish fourth, its weakest showing since 2000 when it ranked 10th, and Kellogg dropped six spots to ninth, its lowest Businessweek rank ever. Another surprise: On the underlying index scores upon which ranks are assigned, Harvard had more than a nine point lead over its nearest competitor this year, 100 vs. 90.6 for Stanford, up from less than two points in 2015.
As is typical in most rankings, the biggest changes tend to occur further down the list where MBA programs tend to cluster together and quality differences are difficult to measure. Three business schools ranked between 26th and 50th rose 13 places this year: UT-Dallas, Illinois, and Buffalo. American University Kogod School of Business leaped 15 places to finish 43rd, up from 58th in 2015. USC’s Marshall School of Business fell 13 positions to end up at a rank of 38th, falling out of the Top 25. Georgetown University’s McDonough School dropped eight places to finish 34th, from 26th last year.
More schools suffered double-digit falls this year than equivalent rises. Ten schools plunged by 10 or more positions, while eight schools had double-digit improvements, including the University of Iowa’s Tippie College of Business which zoomed ahead 20 places to a rank of 35. The toughest plunge of all? North Carolina State’s Jenkins Graduate School of Management was in a free fall, dropping 40 spots to a rank of 69th from 29th only a year ago. Two schools completely disappeared from last year: No. 62 Hult International Business School and No. 64 University of Tennessee.
DEANS ARE RARELY FANS OF RANKINGS
The Businessweek ranking follows earlier lists published by U.S. News, the Financial Times, and The Economist. Harvard also topped this year’s U.S. News list, but INSEAD was on top at the FT and Chicago Booth came in first in The Economist ranking. Forbes, which publishes its ranking every other year, put Stanford GSB first last year. Poets&Quants will publish its new composite ranking before the end of this month.
This is the 17th ranking of MBA programs by Businessweek since its debut in 1988 (The magazine said its ranking of international business schools would come soon but did not disclose a release date). From the beginning until 2012, the magazine published its ranking every other year. In 2014, Businessweek substantially revised its methodology for the ranking, the magazine began cranking out the list on an annual basis. For many of those years, the ranking was relatively stable and authoritative, generally regarded as the go-to list for the MBA applicant pool in the U.S.
But since 2012, when Businessweek had to issue a corrected ranking due to a calculation error, the list’s influence has greatly diminished. Business school deans, rarely fans of rankings, have decried the volatility of such lists, the often head-scratching results, and the methodologies used to rank their MBA programs. Businessweek has seen dramatic changes in the methodology—three different approaches now in four years—and the wild up-and-down swings in ranks for many schools even though little, if anything, has changed from one year to the next. Last year, for example, every Top 25 school was given a rank different than the one it had only a year earlier. This year 21 schools saw rank changes.
The current methodology, adopted last year, puts a 35% weight on a survey of MBA employers who are asked to identify just ten schools and assess the track record of graduates in their companies. Harvard won this contest, followed by MIT Sloan, Chicago Booth, Wharton, and Columbia Business School. A survey completed by school alumni accounts for 30% of the ranking and is based on the increase in their median compensation over their pre-MBA pay, job satisfaction, and their opinions of the MBA experience. The top alumni survey winners were Stanford, Berkeley, Harvard, Rice, and Emory’s Goizueta School. Businessweek then adds in a separate student survey of recent graduates that is weighted 15%. That survey includes 27 questions that contribute to a school’s rank. Indiana Kelley topped the student survey this year, followed by UVA’s Darden School, SMU, Georgia Tech, and USC’s Marshall School of Business.
TROUBLESOME ISSUES WITH THE MOST IMPORTANT PART OF THE RANKING
Finally, Businessweek tosses in two metrics from school reports: the job placement rate three months after graduation and starting salaries, each counting for 10% of the methodology. There’s a problem here as well. The job placement can oddly penalize schools where highly confident graduates hold out for their ideal jobs, refusing to accept offers they don’t want. Stanford, for example, ranks 57th in job placement, while Harvard ranks 35th. It’s not because Harvard and Stanford MBAs are having trouble finding jobs. It’s because more of them are wanting to land a job at early stage companies or other firms that do just-in-time hiring. They are super choosy about what they’re after. Yet, the methodology interprets that fact in a negative way. Because the magazine is collecting this data before all the schools have published their 2016 employment reports, this information also is already a year old. This year, Businessweek gave numerical ranks to 87 U.S. business schools, 13 more than in 2015, with Daniels College of Business at the University of Denver ranked 87th.
The single greatest flaw in the methodology is the survey of employers. Instead of sending a single survey to each major MBA employer—to the corporate official who oversees MBA hiring—Businessweek surveys every recruiter who comes on a business school campus, getting these lists from the schools. However, most companies sent to the schools alumni who work for them. So having alumni fill out these surveys causes significant bias in the sample. This change occurred in 2014, causing Businessweek to concede that alumni tended to rate their own schools “significantly more favorably than non-alumni.” In 2016, Businessweek sent surveys to 16,984 recruiters. Some 1,461 at 672 firms returned the survey, though there are probably no more than 250 firms that actively recruit MBAs at more than half a dozen schools.
The alumni and student surveys also are less than a true measure of a school’s quality because respondents know their answers will impact their alma mater’s standing in the ranking. As a result, they are likely provide less-than-candid answers. That bias occurs across the sample but it is a fact that every year several schools have hard-to-explain scores that seem to defy logic. A few disgruntled alums or students, moreover, can also have a disproportionate impact on the satisfaction rates in the alumni and student polls.