Chicago Again Tops BW’s New 2010 Ranking, With Harvard No. 2

For the third consecutive time, the University of Chicago’s Booth School of Business ranked first in the most influential of all the MBA rankings by Businessweek released today (Nov. 11, 2010). The 2010 survey, the 12th biennial ranking of full-time MBA programs in the U.S. by the magazine over the past 24 years, ranked Harvard second and Wharton third.

On a separate international list, INSEAD climbed into the number one spot among non-U.S. school, up from its second-place finish in 2008. INSEAD was followed by Queens University, which slipped from its number one perch two years earlier, and IE Business School in Spain was ranked the third best non-U.S. business school in the world. It was the third time that INSEAD won the number one ranking for BusinessWeek’s list of the best international schools. INSEAD won in 2002 and 2000, the first year that BW began ranking non-U.S. schools. There were two newcomers this year to the top ten on the No. 9 York University’s Schulich School of Business and No.10 University of Cambridge’s Judge Business School.

Northwestern’s Kellogg School, which has more number one rankings (five) than any other school in the BusinessWeek U.S. survey, fell one spot this year to fourth, its weakest showing ever. Stanford rounded out the top five schools.

There were four new U.S. schools which made their way into the top 30 list of best U.S. schools (and four schools that fell into the magazine’s second-tier). The top 30 newcomers were No. 20 Michigan State’s Broad School of Business, which had been deemed one of 15 second-tier schools by BusinessWeek, two years ago; No. 28 University of Minnesota’s Carlson School of Business, also a second-tier school in 2008; and two previously unranked schools, No. 29 Rice University’s Jones School of Business and No. 30 Texas A&M University”s Mays School.

The four schools that fell out of the magazine’s top 30 were Washington University’s Olin School of Business, which last time was ranked 28th and had been in the top list in seven previous BW surveys. The Olin School fell to a rank of 40. Also dropping off the list was the University of Maryland, which was ranked 26th two years ago and had been in the BW top 30 for the previous six surveys. It dropped to a rank of 42 this time around. Vanderbilt University’s business school, which was No. 30 on the list in 2008 and had been on the previous four top 30 surveys, fell to 37th. And finally, the University of Washington, which had been ranked 27th last time, dropped to a rank of 31. Instead of falling into an unranked “second tier” as these schools would have in the past, BusinessWeek for the first time has assigned ranks to more schools, increasing the total number of ranked institutions to 75 from 40.

Chicago’s staying power as the number one B-school powerhouse for the third time in a row now makes it the third most successful school in the history of BusinessWeek’s ranking which debuted in 1988. Its emergence is widely attributed to the leadership of a now departed dean, Ted Snyder, who will become dean of Yale’s School of Management next year. The ultimate test of Chicago as the best business school in the U.S. will occur in the next BusinessWeek survey under Sunil Kumar, a newly recruited dean from Stanford University’s faculty. Synder was a master at working the school’s key stakeholders, from students and alumni to corporate recruiters and benefactors. He even located the dean’s office next to a private lounge for visiting corporate recruiters. Wharton has been the number one winner on four occasions since 1988, while Kellogg was won that honor a record five times.

Unlike most other rankings, the BusinessWeek survey is not based on GMAT or GPA scores, selectivity of applicants, or starting compensation of new grads or the number of MBAs who have jobs within three months of graduation. Instead, the BW survey is largely a customer satisfaction poll. BW surveys the latest graduating class from each of the top schools, along with the companies that essentially make the MBA market and recruit the vast majority of graduates. A third component, purporting to measure faculty research, accounts for 10 percent of the methodology (see analysis of BW’s intellectual capital ranking).

BusinessWeek said its response rate for the 2010 MBA survey was 55%, with 9,827 of 17,941 graduates responding, while its response rate on the corporate recruiter survey was 42%, with 215 of 514 companies responding. One trick that BusinessWeek applies to its methodology is to count the 2010 graduate survey for just half of the MBA customer satisfaction weight. It also tosses in the previous two surveys to MBA grads from 2008 and 2006, weighted equally at 25% each, which tends to prevent wild swings in the rankings.

One significant flaw in the way BusinessWeek reports its ranking is that the magazine fails to report overall index numbers for its ranked schools so users are unable to determine whether there are meaningful statistical differences between the rank one school gets over another. In many cases, it’s possible that the differences in the underlying scores are so small that they have no statistical significance. Unlike some surveys, BW does not allow a tie for any ranked schools.

The heavy emphasis on corporate recruiters in the survey tends to disadvantage schools with smaller enrollments, such as Dartmouth’s Tuck School of Business and Stanford’s Graduate School of Business, because recruiters are less likely to be highly satisfied at schools that have few graduates to employ. The result: fewer recruiters go to such schools and those that do often leave empty handed. That’s most likely why the highly regarded Tuck School, ranked fifth by Poets&Quants and second by The Economist, is ranked 14th by BusinessWeek–even below the business schools at such public universities as Michigan, Berkeley, and Virginia. Shockingly, BusinessWeek now ranks Southern Methodist University’s Cox School at No. 12, two places above Tuck. BW also ranks Stanford number five, lower than the Poets&Quants No. 2 ranking for the school, and below rankings by U.S. News, Forbes, and the Financial Times. Only The Economist ranks Stanford lower than BW (see table below).

HOW THE 2010 BUSINESSWEEK RANKING COMPARES

2010 BW Rank & School	P&Q	Forbes	U.S. News	FT	Economist
1. Chicago (Booth)	3	4	5	7	1
2. Harvard	1	3	1	3	4
3. Wharton	4	5	5	2	8
4. Northwestern	7	8	4	22	16
5. Stanford	2	1	1	4	7
6. Duke (Fuqua)	11	13	14	20	28
7. Michigan (Ross)	12	18	12	28	25
8. Berkeley (Haas)	9	12	7	28	3
9. Columbia	6	6	9	6	12
10. MIT (Sloan)	8	14	3	8	13
11. Virginia (Darden)	13	9	13	31	11
12. SMU (Cox)	29	33	49	96	78
13. Cornell (Johnson)	14	7	18	36	33
14. Dartmouth (Tuck)	5	2	7	14	2
15. Carnegie Mellon	17	23	16	34	21
16. UNC (Kenan-Flagler)	18	15	21	46	40
17. UCLA (Anderson)	16	19	15	33	37
18. NYU (Stern)	10	17	9	13	14
19. Indiana (Kelley)	20	25	23	57	35
20. Michigan State	35	21	46	65	NR
21. Yale	15	10	11	16	24
22. Emory (Goizueta)	21	22	27	34	36
23. Ga. Institute of Tech	32	44	26	NR	NR
24. Notre Dame	25	38	31	71	39
25. Texas-Austin	19	11	16	52	43
26. USC (Marshall)	23	32	20	57	18
27. Brigham Young	22	16	33	83	NR
28. Minnesota (Carlson)	31	26	24	75	63
29. Rice (Jones)	46	47	39	44	41
30. Texas A&M (Mays)	37	27	79	NR	NR

Source: BusinessWeek 2010 ranking of top 30 U.S. B-schools

Notes: The Financial Times and The Economist publish global rankings so the rank for each of the schools in the table reflects a larger number of schools

BusinessWeek reported that even at the top schools in its survey, it has become increasing difficult to find jobs. “More than 40 percent of B-school career services officers saw a decline in on-campus visits this spring,” reported the magazine, citing statistics the MBA Career Services Council. “And when companies do come to campus, instead of having a dozen positions to fill, they might have two or three. Starting salaries among all MBAs surveyed by Bloomberg Businessweek have dropped nearly 6 percent, from an average of $104,500 in 2008 to $98,400 this year. And students’ plans are changing, with many settling for lesser positions. More than half of those surveyed expressed concern about the job market.”

To maintain it’s number one position, Chicago took the economic downturn seriously. According to BusinessWeek, the school tripled the size of its employer outreach team from two to six in the past two years. Last summer the team met with more than 350 companies, up from 100 in 2007. “We definitely have more corporate relationships now than we did a few years ago,” Julie Morton, associate dean of career services, told BusinessWeek. “We used to assume the relationship began when a company recruited on campus. Now a strong relationship is one where a firm thinks of Booth in terms of sourcing talent–posting a job, coming to campus, or simply interacting with students.”

Besides the four business schools which dropped out of the top 30, other big losers in the 2010 ranking by BusinessWeek included New York University’s Stern School of Business and Brigham Young University’s Marriott School. Both institutions dropped five full places: NYU to 18 from 13 in 2008, and BYU to 27 from 22. The drop for the Stern School nows put it nine places against its New York City rival, Columbia University, which placed ninth, a drop of two places from its seventh-ranked post in 2008.

BIGGEST LOSERS IN THE 2010 BUSINESSWEEK RANKING

School	Difference in Ranks	2010 Rank	2008 Rank
University of Maryland	-16	42	26
Washington University (Olin)	-12	40	28
Vanderbilt University	-7	37	30
New York University (Stern)	-5	18	13
Brigham Young	-5	27	22
University of Washington	-4	31	27
Texas-Austin (McCoombs)	-4	25	21
Indiana (Kelley)	-4	19	15
Notre Dame (Mendoza)	-4	24	20
UCLA (Anderson)	-3	17	14

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Source: BusinessWeek 2010 ranking of Best B-schools

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Besides the four new schools that cracked the top 30 list this year, other big winners in BW’s 2010 ranking included the business schools at Southern Methodist University and the Georgia Institute of Technology. Those schools both jumped six places. SMU’s Cox School moved to 12th from 18th in 2008, while the Georgia Institute rose to 23 from 29th in the last BW ranking.

BIGGEST YEAR-OVER-YEAR WINNERS IN THE 2010 BUSINESSWEEK RANKING

School	Difference in Ranks	2010 Rank	2008 Rank
Michigan State (Broad)	Won top 30 status	20	ST*
Minnesota (Carlson)	Won top 30 status	28	ST*
Rice University (Jones)	Won top 30 status	29	Unranked
Texas A&M (Mays)	Won top 30 status	30	Unranked
SMU (Cox)	+6	12	18
Georgia Institute of Tech	+6	23	29
Virginia (Darden)	+5	11	16
Carnegie Mellon (Tepper)	+4	15	19
Yale University	+3	21	24

Source: BusinessWeek 2010 ranking of Best B-Schools

ST — Second-tier school among 15 identified by BusinessWeek