Wharton, Chicago, NYU Best For Finance

If you want proof that rankings of business schools should be taken with one big grain of salt, look no further than U.S. News & World Report’s specialty rankings for various B-school disciplines from finance to marketing.

The specialty rankings–released last week along with the magazine’s overall ratings of the best business schools–is based entirely on a highly flawed opinion poll of deans and MBA program directors. U.S. News asks B-school administrators to name and rank the finance departments of the schools, even though they are likely to have no direct knowledge of these programs. Respondents then are largely selecting schools on the basis of their overall reputations in a given field–and they will likely name their own schools on the survey even if they don’t deserve to be there.

This flaw was highlighted last year by New Yorker staff writer Malcolm Gladwell in a scathing critique of the U.S. News methodology for its overall ranking of colleges. Yet, Gladwell missed the bigger problem. On the specialty rankings, this issue is compounded because that is all these specialty rankings are based on.


Consider U.S. News’ ranking of the best finance programs this year. A familiar and credible list of schools is at the top: No. 1 Wharton, No. 2 Chicago, No. 3 New York University, and No. 4 Columbia Business School. The first three business schools were in the exact same positions for at least the past three years in a row. Columbia moved up a notch from a rank of fifth place last year.

But as soon as you get past the top ten, suspicions abound. Is Boston College’s Carroll School of Managment, ranked 13th for finance this year by U.S. News, really better than Dartmouth College’s Tuck School, which had been 14th last year but completely disappeared from this year’s list?


We don’t think so. Some 29% of Tuck’s Class of 2011 went into financial services, drawing average base salaries of $114,000 a year, with one MBA reporting a maximum base of $315,000 to start at a private equity firm. Those are mightly impressive numbers that rival those at Wharton or Chicago Booth. Yet, Tuck doesn’t even make this year’s U.S. News’ list of the best business schools for finance. Neither does the University of Virginia’s Darden School of Business, one of the very best business schools in the world where 29% of the latest class also went into financial services.

It gets worse. Who in their right mind would go to Creighton University in Omaha, Nebraska, over Cornell’s Johnson School just because Creighton is ranked 19th and Cornell is ranked 23rd on this list? Hopefully, no one. Truth is, the lower you go on a ranking like this, the less credible the result. Creighton’s finance faculty could not hold a candle to the finance profs at Washington University or Yale, which is ranked at exactly the same 19th place as Creighton.

How does this happen? The only likely answer is a rather damning indictment of U.S. News’ methodology. Our educated guess is that ehe administrators at Creighton filled out this survey and made sure to rank their finance group highly. The sample size was so small that it allowed a business school like Creighton to be ranked more highly than Cornell or Dartmouth, whose finance faculties are without question superior to what is largely an unranked, unknown business school.


Nonetheless, the U.S. News poll is something of a proxy for the general reputation and image of a school in a core teaching area and worth some bragging rights. And of all the disciplines taught at graduate business schools, finance usually reigns supreme. It’s where most schools put the single largest chunk of their resources, from faculty to the courses in the catalog. After all, finance is the language of business, and so even this flawed ranking of the best finance departments at U.S. business schools is worth a look.

So, for those keeping count, three schools had big gains in finance this year, each rising seven places. Boston College went to 13th from 20th last year; the University of Texas at Austin jumped to 14th from 21st, and St. Joseph’s Haub School of Business in Philadelphia moved up to 17th from 24th. We’re so suspicious of these results that we’re writing these sentences with a knowing smile.

The biggest fall? It has to be Dartmouth’s Tuck School, one of six schools to fall entirely off the list of the best finance departments. The others to disappear this year are Loyola Marymount, the University of Southern California’s Marshall School, Indiana Univeristy’s Kelley School, Seattle University, and the University of Florida. The latter three schools were all tied at a rank of 24th last year.

Carnegie Mellon’s Tepper School dropped the most while staying on the list, falling five places to a rank of 18th from 13th last year.

(see next page for complete rankings and year-over-year comparisons).

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