After a major overhaul of its rankings methodology that led to less credible results, Bloomberg Businessweek said yesterday (March 16) that it will make major changes to its ranking of full-time MBA programs yet again. The announced alternations will eliminate the magazine’s intellectual capital ranking and include metrics that will make Businessweek’s list more like U.S. News & World Report’s.
In an email to business school officials, Businessweek said it is scrapping a system based on three core metrics: student satisfaction, recruiter opinion and the research published by a business school’s faculty. In its place, the magazine will add Class of 2014 placement rates three months after graduation and starting compensation for the combined glasses of 2012-2014. Each metric will be weighed 10% in the forthcoming survey that will be published in October of this year. Interestingly, Businessweek will use year-old data for this portion of the ranking.
The magazine also said it will put much less weight on its student satisfaction survey, reducing its contribution to the overall methodology to only 15% from 45%. And it will also introduce a new survey of alumni that will account for 30% of the methodology. Businessweek said it will reduce the importance given its survey of corporate recruiters to 35% from 45% as well, relying solely on one year’s worth of data for employer opinion.
THE NEW CHANGES IMMEDIATELY FOLLOW A CONTROVERSIAL OVERHAUL IN LAST YEAR’S RANKINGS
Businessweek gave no reasons for the second round of substantial changes to its methodology in just two years, something that makes it difficult, if not impossible, for business school officials to respond to when the goal posts shift so rapidly. Moreover, the move to an annual ranking, from a biennial one since the launch of the Businessweek ranking in 1988, also puts yet another burden on business schools to comply with the numerous information requests required by the magazine.
“We will strengthen the focus of our Full-Time MBA Rankings methodology by evaluating how well programs help graduates achieve their career goals,” said Jonathan Rodkin, research and rankings coordinator, and
Francesca Levy, editor of Bloomberg business game plan & business schools. “As such, we will no longer rank schools on faculty research output (the portion of our previous rankings model called Intellectual Capital). We will also introduce an alumni survey, and we will include more employment outcome data in our rankings model.”
The alumni survey will measure what Businessweek called “alumni reflections on MBA experience, job
satisfaction, employment, and compensation information.” The first year’s survey will be sent to alumni who graduated in 2007, 2008, and 2009. The magazine did not disclose how it would weight individual elements of alumni opinion.
The changes follow a significantly revamped version of the Businessweek rankings that was published last November. Those changes led to what many consider far less-credible results, including the emergence of Duke University’s Fuqua School of Business as having the best MBA program in the country. The only other time that Duke finished in the top five was 14 years ago in 2000 when it claimed fifth place. Harvard Business School was ranked eighth by Businessweek in that ranking.
The newly announced revisions will now make year-old pay and placement data far more important in the methodology than student satisfaction, making the Businessweek ranking similar to other business school rankings that generally give compensation and placement metrics greater authority. It’s not clear why Businessweek will use data that is a year old, especially when the latest pay and job offer rates are available from schools by the magazine’s deadlines. Businessweek said it will adjust salary figures for industry and for geographic region of graduates’ employment.
CHANGES OCCUR AFTER SURPRISING RESULTS IN THE LATEST RANKING
Businessweek’s changes will make the ranking somewhat more predictable. Last year’s list was filled with many shocking surprises that hurt the magazine’s credibility. Besides the fact that Harvard failed to even make the top five MBA programs, Yale University’s School of Management rose 15 places to achieve its highest ever rank at No. 6. MIT Sloan fell out of the top ten to a lowly rank of 14th.
UC-Berkeley’s Haas School, the second most highly selective MBA program in the U.S., is way down at No. 19, with UCLA’s Anderson School high above it at a rank of 11. The University of Virginia’s Darden School of Business skidded ten spots to rank 20th. The University of Maryland’s Smith School finished in first place in the magazine’s student survey where Harvard finished 25th and Stanford finished 17th. And UC-San Diego’s Rady School of Management, which failed to even make the Businessweek ranking two years ago, finished first in intellectual capital, 24 places above Stanford which was ranked 25th on this measure.
Many of those changes occurred after Businessweek decided to survey alumni who return to their alma maters as recruiters—something the magazine had never done. The magazine conceded that when a recruiter who was an alum of a school rated his or her alma mater, the scores were about 18% higher than the average non-alumni rating. Some 38 schools in the sample derived at least 25% of their ratings from alumni, while five schools derived “at least 50%” of their ratings from alumni. In effect, alumni played a substantial role in ranking nearly four in ten schools–43 out of 112–in this year’s Businessweek survey.
The magazine also had acknowledged that both Yale and Carnegie Mellon University’s Tepper School of Business “were scored by enthusiastic alumni recruiters.” Yale’s recruiter score rose to eighth place, a jump of 19 spots from its 27th place finish in 2012 and an increase of 29 places from 37th in 2010. That boost allowed the school to gain an overall rank of 6th, well above its best ever previous showing in the Businessweek list at 14th. In nine previous rankings, dating back to 1996, Yale never scored higher than 20th on the employer survey and its overall recruiter standing over that 18-year timeframe was 28th.