For the fourth time in five years, the University of Chicago’s Booth School of Business came out on top The Economist’s ranking of full-time MBA programs published today (Oct. 9). But the bigger story in this latest list is the big gains racked up by Northwestern University’s Kellogg School of Management and Yale University’s School of Management. Both U.S. schools rose nine places to finish 14th and 19th, respectively.
HEC Paris improved four spots to finish fourth, making the school’s MBA program the highest ranked in Europe, well ahead of No. 15 London Business School and No. 18 INSEAD. The Economist attributed HEC’s improved performance to what it called “the impressive salaries its graduates get.” According to the British magazine, graduates of the HEC Paris MBA program were able to increase their pre-MBA pay by a whopping 157% to $123,982, the largest percentage gain recorded by any Top 25 school.
After Chicago, Dartmouth College’s Tuck School repeated its No. 2 showing from last year. The University of Virginia’s Darden school gained a spot to finish third, while No. 5 IESE in Spain was right behind HEC Paris in capturing the same place it did last year.
IMD PLUNGES EIGHT PLACES TO A RANK OF 21ST
Chicago managed its repeat performance despite less-than-stellar scores from alumni on both the breadth and effectiveness of the school’s alumni network. Booth ranked 43rd among the 100 schools in alumni breadth and 28th in alumni effectiveness. Tuck was ranked first in alumni effectiveness, followed by Stanford Graduate School of Business.
The International Institute for Management Development, known as IMD in Lausanne, Switzerland, meantime, plunged eight places in the new ranking to 21st from 13th. Along with an eight-place drop by Spain’s ESADE to a rank of 24th, it was the biggest fall of any school in the Top 25. IMD has reported declines in starting pay for two consecutive years and there is significant concern among applicants and alumni that the school’s boutique MBA program, which only enrolls 90 students a year, is floundering. The Economist said that 73 other schools on its list of 100 offered graduates a larger increase over pre-MBA pay than the 52% reported by IMD’s alumni
U.S. schools seemed to fare far better this year than their European counterparts, perhaps a result of the more robust economy recovery that has occurred in the U.S. Eighteen of the Top 25 schools on the new list are based in the U.S. American. However, HEC Paris, the top European school, has climbed four places to fourth, mostly because of the impressive salaries its graduates get. The University of Queensland is the top-ranked school outside America and Europe (see The Economist’s Big Winners & Losers).
A QUESTIONABLE METHODOLOGY THAT PRODUCES ODD RESULTS
The Economist’s methodology arguably produces the most peculiar results of the five most influential rankings of business schools. That’s why 17 business schools, including the Babson College, the University of Toronto’s Rotman School, the University of Minnesota’s Carlson School and Purdue University’s Krannert School, refused to participate in the ranking this year. Many of the schools that declined to play are better than some of the schools on The Economist’s list.
The methodology takes into account new career opportunities (35%); personal development/educational experience (35%); increasing salary (20%); and the potential to network (10%). The figures are a mixture of hard data and the subjective marks given by the school’s students who are surveyed by the magazine.
Measuring MBA programs on those dimensions should insure that Harvard, Stanford, Wharton and London Business School do well. Yet surprisingly, year after year they tend to lag in The Economist ranking. In fact, Harvard, Stanford and Wharton have never topped this ranking even though it has been published every year since 2002. This year, Harvard placed sixth, Stanford ninth, and Wharton 11th, even though the MBA programs at those schools are generally regarded as the best in the world.
No less crucial, The Economist ranking is known as something of a wild roller coaster ride. Each year, numerous schools suffer massive swings in their ranks even though there are few, if any, major changes at the schools being measured. This year, for example, the University of Bath School of Management plummeted 23 places to a rank of 43rd from 20th in 2013.
ROCHESTER’S SIMON SCHOOL AND TEMPLE’S FOX JUMP 20 PLACES IN A SINGLE YEAR
Unaccountably, the University of Rochester’s Simon School of Business and Temple University’s Fox School in Philadelphia both climbed 20 places this year to finish 58th and 57th. These topsy-turvy outcomes are common, especially for schools that are ranked outside the Top 25, largely because the underlying index scores used to crank out the numerical ranks for each school are so obviously close that they are statistically meaningless. Altogether, some 23 different MBA programs experienced double-digit increases or falls.
The odd results raise meaningful credibility issues with the methodology and the accuracy of the data some of these schools are providing to The Economist. Because 80% of the ranking is based on unaudited information from business schools, there’s a possibility that some data has been fudged. The Economist also throws into its ranking formula criteria that has little to do with the quality of education, such as the percentages of international and female students (giving these two questions alone nearly a 17% of the weight in the ranking), the range of overseas exchange programs (a 6.25% weight), and the number of languages offered (also given a 6.25% weight).
(See following page for table of the top schools and year-over-year comparisons)