2012 Financial Times Ranking of the Best B-Schools

An aerial view of the new Knight Management Center at Stanford

For the first time in the 14 years that The Financial Times has ranked full-time MBA programs, Stanford University’s Graduate School of Business captured first place in the British newspaper’s new 2012 global MBA ranking published today (Jan. 30).

Stanford pushed aside both the Wharton School at the University of Pennsylvania and London Business School, which had tied for first last year. Wharton fell to third, and London to fourth. No. 2 Harvard Business School was right behind Stanford in the new ranking, and Columbia Business School rose two spots to place fifth.

But the biggest gain of any school in the top 25 was made by UC-Berkeley’s Haas School of Business which climbed 11 places in a single year to be ranked 14th, up from 25th in 2011. Yet, the school’s alumni did not report an appreciable increase in compensation which carries the most weight in the Financial Times’ methodology. Three years after graduation, Berkeley’s Class of 2009 reported making $146,811 on average, representing an increase over pre-MBA pay of 91%. A year earlier, alums reported making $144,790 on average, with an increase of 87% over their pre-MBA salaries. The FT did not offer any explanation for the rankings improvement for Berkeley.


Other top 25 gainers include Cornell’s Johnson School, up six places to a rank of 24 this year; Duke University’s Fuqua School and Northwestern University’s Kellogg School of Management, both up five places to ranks of 15th and 16th, respectively, and Oxford’s Said School, up seven spots to finish 20th this year.

The new Financial Times list was less kind to the Indian School of Business and CEIBS in China which both dropped seven places to 20th and 24th, respectively. Yale’s School of Management also lost five spots to fall to a three-way tie for 20th with Said and the Indian School of Business.

The Financial Times also made a point in noting that Hong Kong’s University of Science and Technology Business School fell four places to tenth in the new ranking, and the newspaper said the decline is “partly explained by a reclassification of students, faculty members and board members from China, previously counted as international by the FT for schools based in Hong Kong.” Those factors are among 20 different data points in the methodology used by the FT to rank MBA programs.


As is often the case, the further down the list one goes, the more dramatic the results–a consequence of the fact that there is little if any statistical significance to these assigned numerical ranks. Indiana University’s Kelley School jumped 27 places to finish 46, up from 73 only a year ago, while the Warwick Business School in England rose even high–an amazing 31 places to a rank of 27, up from 58 in 2011. (See “The Biggest Winners & Losers of The Financial Times’ 2012 MBA Ranking“)

Perhaps the oddest showing of the new survey is the rank of the Chinese University of Hong Kong at 28 and the University of Hong Kong at 37. Both schools failed to even make The Financial Times’ 2011 list so their appearances at these relatively high ranks mean that the Chinese University had to climb a minimum of 73 places to enter at 28, while the University of Hong Kong had to gain at least 64 places to finish at 37. These results give the ranking little authority or credibility. (See “The Strange Math in the FT Ranking.”)

Some 13 schools fell completely off the list, including Arizona State University’s Carey School, which had been ranked 64th last year by the FT, UC-Davis, which had been ranked 83rd, the College of William & Mary’s Mason School, ranked 86th last year, and Pepperdine, ranked 92nd last year. Just about one in every four schools had a double-digit increase or decrease in their year-over-year Financial Times ranking.

The primary reason for Stanford’s rise? An increase in compensation, which gets the most weight of any criteria used to rank schools by the FT.  The newspaper surveys alumni three years after their graduation and asks them to report what they had made before going to school as well as what they made in the past year. The FT said Stanford graduates boasted the highest “sector-weighted” average salary, at $192,179 a year (based on purchasing power parity equiv­alents). “Pay has proved a strong suit for Stanford throughout the history of the ranking: the school has topped the list of earnings eight times,” The Financial Times said.


The Financial Times said that the rise of three U.S.-based schools at the top of its global ranking of 100 full-time MBA programs reflects a more general trend of U.S. schools doing better in the FT’s ranking.

U.S. schools, which account for 53 of the 100 ranked schools, “fared marginally better than their European counterparts (a quarter of the schools in the 2012 ranking are primarily based in Europe),” the newspaper said. “Of the 47 U.S-based schools that feature in both the 2011 and 2012 ranking, 20 moved up the list this year. In contrast, 18 of the 23 European schools listed in both years either did not move or dropped down the table in 2012.”

The culprit: Europe’s economic troubles. “Average alumni salaries three years after graduation were lower in 2012 when compared with the previous year for 16 out of the 23 European schools listed. This compares with increases for 26 out of the 48 alumni groups from US-based schools,” the Financial Times reported.

(See table of top 25 schools on following page)

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