The Financial Times began ranking full-time MBA programs in 1999, offering what was then a novel global take on business education. For 17 straight years, the top of the British newspaper’s ranking was dominated by the likes of Wharton, Harvard, Stanford and home town favorite London Business School.
Then, INSEAD cracked the code, finishing first last year. Now the institution that bills itself “the business school for the world,” has done it again in the FT’s 2017 global MBA ranking. For the second consecutive year, the FT today (Jan. 30) named INSEAD’s accelerated 10-month program the No. 1 MBA experience in the world. Claiming this year’s top spot shows that INSEAD’s emergence is no one-time fluke in a highly influential ranking that is closely watched in Europe and Asia (see What INSEAD’s Repeat FT Win Means For The School).
Stanford GSB replaced HBS to rank second, with Wharton in third place, and the University of Cambridge’s Judge Business School in fifth. Judge rose five places this year and 21 places in the past five years to gain its fifth-place finish, putting further distance between Judge and its top rival, Oxford’s Saïd Business School, which fell five places to a rank of 33rd, its lowest FT ranking since 2003 when it finished 35th. Only five years ago, Saïd was ranked 20th, ahead of Judge by six places.
This year the FT ranked London Business School, the only other non-U.S. MBA program to ever grace the top of its list, sixth. Columbia Business School, always a strong performed in this ranking, was seventh, with Spain’s IE Business School eighth, Chicago Booth ninth, and IESE Business School tenth.
A TOUGH YEAR FOR THE BEST U.S. BUSINESS SCHOOLS
A trio of schools in the top 25 each gained six places to finish substantially higher this year: IESE Business School in Spain rose to 10th from 16th, CEIBs in Shanghai, China, jumped to 11th from 17th, and ESADE in Spain improved to 17th from 23rd. Switzerland-based IMD lost the most ground, dropping eight places to a rank of 21st from 13th last year.
All around, it was a tough year for U.S. business schools. Not only did INSEAD keep Stanford, Wharton and Harvard out of the top spot; only half of the top ten ranked institutions are based in the U.S., down from seven on each of the previous three annual lists. When the FT began ranking MBA programs, INSEAD finished 11th, and nine of the top ten schools were in the U.S., including first-place Harvard. This year, HBS lost two spots, sinking to fourth place.
The FT calculations on currency exchange which impact its salary data–a major factor in these rankings–were done in the fall before the more recent rise in the U.S. dollar which also hurt U.S. schools. “Overall, the impact of the strengthening US dollar has yet to be felt in the FT ranking, with many European and Asian schools performing well in the top half of the table,” notes Matt Symonds, director of Fortuna Admissions. “Six of the top 11 schools are from Europe and Asia, with the other places held by the fabled M7.”
Failing to win a top ten rank were a group of world class business schools that have long dominated the top of most rankings. They include No. 11 Northwestern University’s Kellogg School of Management, MIT Sloan and UC-Berkeley’s Haas School, both tied at 13th, No. 15 Yale School of Management, No. 18 Dartmouth College’s Tuck School of Business, and No. 19 NYU’s Stern School. What’s more, among the top 25 ranked schools, eight of the U.S. schools lost ground this year, while only four U.S. MBA programs improved their position.
THE JUDGMENT OF BRITAIN?
To Santiago Iñiguez, executive president of IE University, the improved status of the European schools recalls the Paris wine tasting of 1976 known as the Judgment of Paris. That is when a California chardonnay and cabernet sauvignon were rated best in a blind tasting, prompting surprise when France was generally recognized as being the foremost producer of the world’s best wines.
Call the new FT list: The Judgment of Britain. “I believe this marks the globalization of the business school field,” he says. “It proves the globalization of the industry in the way it happened in the wine industry. Since then, California wines and New World wines have become as appreciated as French wines.”
Still, it was not all bad. U.S. schools occupy 51 of the 100 places on the list, up from 47 last year. Some 30 of the U.S. players were up, with 19 down and two maintaining their ranks from a year ago. Many American MBA programs did especially well. Indiana’s Kelley School rose eight places to finish 47th, Ohio State’s Fisher School jumped 12 spots to rank 63rd, Brigham Young University’s Marriott School advanced 15 places to finish 65th, Washington University’s Olin School gained 12 places to rank 68th.
THE FIRST RANKING NOT CRANKED OUT BY DELLA BRADSHAW
This is the first ranking not produced by the FT‘s long-time business school guru Della Bradshaw, who left the newspaper last year. Still, there were no notable changes in the FT’s methodology which is based on 20 different metrics, including several that tend to favor non-U.S. schools. Among other things, metrics that add score points to a school’s standing include the percentage of students, faculty and trustees who carry passports from a country where the school is not located, whether students and alumni worked in foreign countries, whether students had an international course experience and whether the school requires students to learn extra languages prior to graduation. What any of these criteria have to do with the quality of an MBA degree is a matter of opinion.
Often, an even greater impact on a school’s rank can be the result of the FT’s decision to use a purchasing power parity (PPP) formula to convert and count actual compensation data–the most heavily weighted metric in the methodology. Such currency gymnastics favor schools that supply graduates to countries with high rates of poverty. One notable example: The FT ranks IIM-Ahmedabad in India 29th, ahead of the business schools at UCLA, Oxford, Virginia, Carnegie Mellon, North Carolina and others.
This adjustment has an especially negative impact on all U.S. schools because the vast majority of international students who get an MBA in America want to live and work in the U.S. where their compensation would not be inflated by the PPA filter. Although 35% of this year’s graduating class at Harvard Business School were international, for example, only 14% of the class took jobs overseas and that percentage includes some U.S. citizens. At INSEAD, in contrast, more than 60% of the MBA students from Asia Pacific (65%), Africa and the Middle East (61%), and Latin America (69&) returned home to regions where a PPP adjustment would inflate their actual compensation.
THE NO. 1 SCHOOLS OVER 19 YEARS OF FINANCIAL TIMES RANKINGS
|School||No. 1 FT Rankings||Years At No. 1|
|Wharton||10||2011, 2009, 2008, 2007, 2006, 2005, 2004, 2003, 2002, 2001|
|Harvard||6||2015, 2014, 2013, 2005, 2000, 1999|
|London||3||2011, 2010, 2009|
Note: In three of 18 years, two schools have shared the No. 1 mantle: Wharton and London in both 2011 and 2009 as well as Wharton and Harvard in 2005