The Sad Truth Behind A Rankings Scandal At The Bloch School of Management

The email from the dean of the Henry Bloch School of Management at the University of Missouri-Kansas City wasn’t exactly a smoking gun. But it sure doesn’t look very good.

“Henry Bloch gets very upset when our rankings go down,” wrote Dean Teng-Kee Tan to several school officials on Oct. 27, 2011. “We must do everything we can to increase it when we can by all means necessary.”

That message—part of an investigation published today (Jan. 30)—apparently got through to the people who had to fill out a ranking survey from the Princeton Review.

AN INVESTIGATION FOUND THAT THE SCHOOL INFLATED KEY METRICS FOR A RANKING

The independent probe found that the Bloch School inflated key metrics that it reported to the Princeton Review. Some of the metrics were exaggerated by as much as tenfold in an apparent effort to improve the school’s chances of gaining a spot on the Princeton Review’s annual list of the best entrepreneurship programs. The school falsely boosted the number of student clubs devoted to entrepreneurship, the number of mentor programs on-campus, and the percentage of students who launch businesses while in school.

The disclosures were made today after a 35-page independent review by PricewaterhouseCoopers and Robert D. Hisrich, a former Thunderbird School of Management professor and a consultant. Hisrich, in his report to the University of Missouri Board of Curators, failed to disclose the corrected data. Moreover, he also did not identify by name either the dean or the managing director of the school’s entrepreneurship center in his report.

But from the facts he provided and the accompanying PwC report, it was clear that the school significantly inflated those numbers and had been under pressure to do so from then Dean Tan. Tan resigned his job in 2013 due to health reasons. The email written by Tan was sent to John Norton, then managing director of the school’s entrepreneurship program. The email, disclosed in the PwC report, was also sent to two other unidentified school officials.

FORMER HEAD OF ENTREPRENEURSHIP SAYS HE FELT PRESSURE FROM THE DEAN TO DO ‘IMPROPER THINGS’

Norton told PwC auditors that he felt pressure by Dean Song “to do things that were improper in relation to” submitting data to the Princeton Review for its annual ranking of the best business schools for entrepreneurship. The PwC report said Norton provided falsified data to the organization “for fear of job security.”

The investigation by PwC found that the business school told Princeton Reivew that in 2013, 59% of both undergraduate and graduate students launched a business while at school. A year later, the actual number was roughly one-sixth that number: a mere 10%. In 2012, the school reported that there were 55 clubs officially recognized for entrepreneurship students, more than ten times the actual number. Last year, the school conceded there were only five. The school also claimed to Princeton Review that in 2012 and 2013, there were 78 officially sponsored mentorship programs, more than twice as many as there were last year when the school admitted that the number just 33.

Norton told PwC auditors that Michael Song, now a professor at the school but then director of Bloch’s Institute for Entrepreneurship and Innovation (IEI), put together a “wish list” of clubs and told a graduate student to post those clubs on the school’s website. The current director of the entrepreneurship institute, Jeff Hornsby, told the auditors that he had all but five of the clubs removed shortly after he succeeded Song; last year. “He believed 29 clubs never existed at the university in any capacity,” according to the report. “He stated that ‘there is no defending that number.'”

When PwC interviewed current Bloch School Dean David Donnelley for its report, the dean told the auditing firm that he “did not provide authority to the former IEI Director (Song) to submit the PRB responses and that it was ‘pretty clear’ that the former IEI Director was defining things in a way that was ‘not consistent with the way the normal person would.’”

Donnelley told PwC staffers that he was not involved in the submissions to the PRB until sometime in 2012 and that he was not actively participating in collecting information that would be submitted to the PRB. The former IEI Director informed him that he and the former Dean Tan agreed on the number of clubs at the University and initially Tan relied on the former IEI Director’s input.

CURRENT DEAN SAYS HE ‘COULD NOT TRUST’ SONG, THE FORMER DIRECTOR OF THE ENTREPRENEUR CENTER

“He went on to state that he was unsure how the PRB defined a club, but upon closer analysis felt that the former IEI Director was not being upfront with him,” the PwC report noted. “The Bloch School Dean could not claim that the former IEI Director wasn’t trying to purposely frame data submitted to the PRB so that it best reflected on the University. He stated that he ‘could not trust’ [the former IEI Director] and that he questioned the way certain answers were provided to the PRB when the former IEI Director and the former Bloch School Dean were providing the PRB with data.”

The investigation was launched after a highly critical article in the Kansas City Star last July. In the aftermath of the story, Missouri Governor Jay Nixon insisted that an independent investigation into the allegations occur. The resulting probe, however, could not determine whether the reporting of the inaccurate data had an actual impact on its Princeton Review ranking. That is largely because the Review unexplainably declined to re-run its analysis to account for the correct data.

The Princeton Review ranking has been widely discredited because it is one of the few which fails to reveal the actual methodology that leads to numerical ranks for schools. For years, many of the most prominent business schools, including MIT Sloan, Wharton and UC-Berkeley, have refused to even cooperate with Princeton Review because the ranking lacks both transparency and any credibility. It is largely a “black box” exercise engineered to grab attention for the Princeton Review brand and to drive traffic to its website.

THE ‘FLAWED’ NUMBERS WERE IN THE SERVICE OF ‘THE LAUGHING STOCK OF RANKINGS’

Donald Kuratko, the executive director of the global consortium of entrepreneurship centers who also leads the study of entrepreneurship at Indiana University’s Kelley School of Business, is a sharp critic of the methodology. “It’s the laughing stock of rankings,” maintains Kuratko. “In past years, they have ranked schools that didn’t even have entrepreneurship programs and one regional school reported having more than 70 faculty members in entrepreneurship. It was an absurdity. I will not be involved in some type of scheme that has no integrity associated with it.”

But for the Bloch School of Management, whose MBA program is unranked by any of the five most influential business school rankings, the Princeton Review list of entrepreneurship programs had to seem like easy pickings.

In his six-page report, Hisrich said that PwC staffers interviewed the director of content development for the Princeton Review in its probe and the person declined a request “to perform a recalculation of prior year’s rankings” based on the correct data. The auditors also discovered that the Princeton Review does not perform an audit of responses provided by a university but does require certification from each university stating that the information they are providing is accurate.”

The Princeton Review director, according to the report, also claimed that “a shift in one data point, even going from 100% to 0%, would not change the overall outcome of the 2014 ranking of UMKC’s program due to the Princeton Review Board’s process which includes evaluating 40 data points.”