The Economist 2010 MBA Ranking

Chicago's Booth School of Business

Chicago’s Booth School of Business, the number one school in the 2010 Economist ranking

There were so many dramatic changes in The Economist’s ninth annual ranking of full-time MBA programs that we dubbed this the “roller coaster ranking.” Published in mid-October of every year, the British magazine’s global ranking is based 20% on student and alumni surveys and 80% on data provided by the schools. There are some incredibly peculiar results in this ranking, which raise significant credibility issues. In this 2010 ranking, London Business School, which is ranked number one by The Financial Times global rankings, tumbled 11 places. According to the new ranking, there are two other business schools in the United Kingdom that supposedly have better MBA programs than London: 18th ranked Cranfield School of Management and 21st ranked Henley Business School. The reason: Cranfield and Henley fell less than London; Cranfield dropped three places, while Henley fell four.

There were plenty of other head-shaking results, though. The University of Virginia’s Darden School leapfrogged 13 spots to come in 11th compared to the previous year’s 24th showing. Columbia Business School jumped eight places to 12th from 20th in 2009. The University of Southern California’s Marshall School of Business shot up 18 places to 18th from 36th, while Carnegie Mellon’s B-school leaped 12 spots to 21st on the list, from 33rd last year. MIT’s Sloan School moved up six spots to 13th from 19th in 2009. The Economist explained some of the wild swings by saying, “Our latest ranking is probably the most turbulent in that short history. Usually, schools move up or down just a few places year on year. This time around, however, swings have been wilder.”

No kidding. Consider Vierick Leuven, the Belgium-based business school, which plummeted 37 places in a single year, down to a rank of 47th from a rank of 10 in 2009. In its write-up describing the new ranking, The Economist doesn’t even bother to point out that this school experienced the biggest single drop. Meantime, it’s worth noting that several of the other major rankings fail to put Vierick Leuven on its list of the best business schools–not the best international school rankings by BusinessWeek or Forbes. The Financial Times, meantime, ranks the school No. 87th. That is true of several schools on The Economist list, including Britain’s Henley School of Business, ranked 17th by The Economist but completely unacknowledged by all the other influential rankings, No. 26th ranked Mannheim in Germany, and the No. 48th ranked University of Hong Kong.

Vierick wasn’t the only school on this roller coaster. Britain-based Ashridge dropped 32 spots, to a rank of 67 from 35 a year earlier. Obviously, such massive changes in a ranking over only 12 months raises significant questions about the credibility of The Economist’s ranking methodology. How can a school that The Economist says is the 10th best in the world fall to a rank of 47th within a single year? When rankings swings are this dramatic and common it means that the difference between one school’s rank and another has little, if any, statistical significance. The results are so “bunched” close together that it is misleading to rank one school No. 15 and another No. 20 because there is no real quality difference between them. You can’t tell how close these schools are, however, because The Economist does not provide an index to show you the differences among the schools at their ranks.

The biggest losers in the 2010 survey were all non-U.S. schools, with five of them based in Britain. Oxford University’s Said business school fell 24 places, while Cambridge University’s Judge School of Business dropped 19 spots. With only one exception, the biggest winners in The Economist’s 2010 ranking were U.S. schools, led by Washington University’s Olin School of Business in St. Louis which jumped 20 places to a rank of 45th. The University of Southern California’s Marshall School of Business and Vanderbilt’s Owen School both rose 18 spots. Marshall jumped to a rank of 16 this year from 36 in 2009. Owen leapfrogged to 46th from 64th a year earlier. Hult International, the renamed Arthur D. Little Institute of Management, jumped 17 places. The one exception to a U.S. rout was ESADE in Barcelona. ESADE rose nine places to finish with a rank of 20, versus 29th in 2009.

The Economist attributed most declines by non-U.S. schools to falling career opportunities and starting compensation for graduates of the best European schools. The Economist places 55% of the weight of its ranking on pay and employment rates at graduation. The data The Economist used, moreover, was not for the latest graduating class, but instead for the Class of 2009, a particularly difficult time for the economy and for the MBA market. If the magazine waited just a few more weeks, it would have been able to crank out its ranking with the most recent numbers for the Class of 2010. BusinessWeek’s new ranking will be disclosed on Nov. 11 at 5 p.m. That latter date allows BW to report up-to-date information rather than year-old data.

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