Other schools in the FT’s top 20 which have made significant progress moving forward include No. 15 Ceibs in China, up nine places from 24th last year; No. 14 Yale University’s School of Management, up a half dozen spots from 20th, and No. 13 Northwestern University’s Kellogg School of Management and No. 16th Dartmouth College’s Tuck School of Business, both up three places from 15th and 19th, respectively.
PROGRESS BY SEVERAL SCHOOLS IS GOOD NEWS FOR NEW DEANS PURSUING NEW AGENDAS
The improvement at Ceibs, Yale and Kellogg is a sign that new leadership is having an impact. At Ceibs, Harvard Business School professor John Quelch had taken over the deanship of the Chinese school in February of 2011 and left this month. But during his two-year tenure, he made significant progress in advancing the school’s quality and agenda. At Kellogg and Yale, Deans Sally Blount and Edward Snyder have been aggressively working to improve their schools’ MBA programs. The Financial Times ranking is among the first to show a payoff from those efforts.
Ceibs, in a news release on the improvement, noted that the FT reported a 157% increase in graduates’ salary three years after they completed the programme (up 7% over 2012); a 25-point jump in value for money (ranked #24 this year, #49 last year); a 19-point increase in alumni’s career progress (#8 this year, #27 last year); 95% of its alumni employed within three months after graduating, despite the increasingly challenging global job market; a 9-point increase (ranked #14) in its international course experience; improved international mobility of students (up 3 places to #38); more international faculty on board (70% of the faculty pool) and they were producing higher quality research (up 15 spots to #66). That gives you a sense for some of the other factors measured by The Financial Times in its methodology.
A TOUGH YEAR FOR TWO PROMINENT INDIAN BUSINESS SCHOOLS
The new ranking was especially punishing to India’s two most famous business schools: the Indian Institute of Management in Ahmedabad, known as the world’s most selective business school due to an acceptance rate of below 1%, and the Indian School of Business. Last year, IIM-Ahmedabad was ranked 11th and ISB was ranked 20th by The Financial Times. This year both schools tumbled out of the British newspaper’s top 20 ranking, with IIM plummeting 15 places to finish 26th and ISB falling a 14 spots to rank 34th.
The drops were caused in part by falling compensation. At IIM, for example, average alumni salaries fell by 2.2% last year to $171,188, making the school one of only two top 25 ranked schools where alumni reported lower salaries last year than the year before. At ISB, salaries dropped by 4.4% to $123,094, a drop of more than $5,700. Those declines, gathered from surveys of alumni by The Financial Times, also had a negative impact on the percentage increase in salary of alumni over their pre-MBA pay, another key metric used by the FT to rank schools. At IIM, the percentage gain fell 30 points to 110%, while at ISB the percentage increase plummeted 25 points to 152%.
The FT said that U.S. business schools continue to dominate the rankings, with 51 of the top 100 schools located there, including six of the top 10. There are 26 European MBA programmes, with London Business School ranked number one in the region and four in the world. Hong Kong University of Science and Technology is the top Asian school, according to the FT, ranked eight. The number of Asia-Pacific business schools in the rankings increased to by two to 14 this year from 12 in 2012.
The Financial Times makes it relatively easy to figure out why a school rose or fell in its ranking due to the transparency of its reporting. But even beneficiaries can be puzzled as to why they did better. Consider Cambridge University’s Judge School of Business which rose ten places to finish 16th from 26th in 2011. Judge Admissions Chief Conrad Chua conceded on his admissions blog that he would be hard-pressed to explain what caused the improvement in performance in the FT survey. “As far as we know, there was nothing radically different between the classes,” he wrote. “In the same way, we didn’t think there was anything significantly different in the classes who were surveyed when we dropped in the rankings.”
HOW HARVARD DISPLACED STANFORD IN THE FT RANKING
Nonetheless, it’s rather telling to examine how Harvard Business School jumped over Stanford this year to finish first.
Though Stanford handily beats Harvard when it comes to the weighted average salary of its alumni three years after graduation ($194,645 for Stanford alums vs. $187,223 for HBS alums), Harvard edged out its West Coast rival on 11 of the 20 metrics used by The Financial Times to rank the best business schools. Harvard, for example, did better on another key measure of compensation–the percentage increase in alumni salaries over pre-MBA pay (121% for HBS alums vs. 115% for Stanford MBAs).