Bloomberg Businessweek’s new ranking of the best MBA programs will come out Thursday morning at 11 EST (Nov. 16). It will be the 18th time the magazine has ranked MBA programs since the list’s debut in 1988 when Businessweek’s survey became the first regularly published ranking in the business.
Expect to be shocked. If last year’s ranking is any indication, this year’s new list will be a roller-coaster doozy. Last year’s ranking of 87 different U.S. programs was full of surprises, including an 11-place jump by Rice University’s Jones Graduate School of Business that ranked the school eighth best among full-time MBA programs in the U.S. To finish in the top ten, Jones bypassed some of the most coveted B-school brands in the world. Jones shot by Northwestern’s Kellogg School, Berkeley’s Haas, Columbia, Michigan Ross, Yale’s School of Management.
Last year also saw Duke University’s Fuqua School of Business rise five positions to rank third, right behind Harvard and Stanford. Putting aside the 11-place jump by Rice University’s business school this year, the biggest improvement for any Top 25 school was made by Dartmouth College’s Tuck School of Business. Tuck raced up the list by nine positions to finish fifth this year, its strongest showing in the Businessweek ranking since the original list made its debut in 1988. Back then, Tuck finished third. This week’s ranking, putting Tuck ahead of Wharton, MIT Sloan and Kellogg.
THE CREDIBILITY OF THE RANKING HAS BEEN DIMINISHED IN RECENT YEARS
Among the five most influential MBA rankings, Businessweek’s reputation has been greatly diminished in recent years, largely because of significant changes in methodology that have led to some unusual, credibiliity-sinking results. It also hasn’t helped that the magazine has stopped covering management education outside of this ranking or that it devotes little editorial space to the list once published. U.S. News & World Report, most observers agree, has supplanted the impact of Businessweek’s survey to become the most followed list in the U.S., while the Financial Times has become the MBA ranking of choice in Europe and Asia, partly because the FT methodology disadvantages U.S. schools.
Even so, Bloomberg Businessweek’s now annual list still has clout and is more widely followed than the rankings published by either The Economist or Forbes. The Businessweek ranking also is the last of the big five lists this year. Poets&Quants will publish its new composite ranking before the end of this month.
What has caused many business school deans to sour on Businessweek’s ranking is what is considered dramatic changes in the magazine’s methodology—three different approaches in the previous four years—and the wild up-and-down swings in ranks for many schools even though little, if anything, has changed from one year to the next. Last year, for example, 21 of the 25 highest ranked schools saw rank changes.
What’s more, Businessweek‘s cost-cutting initiatives have long ago eliminated the team of knowledgeable journalists who cover this beat. The result: The magazine has all but farmed out the rankings project to Cambria Consulting of Boston, a firm which surveys recruiters, alumni and students for the list. Some long-time observers say they wouldn’t be surprised if this is the last time Businessweek will publish an MBA ranking. The magazine has already ended its rankings of undergraduate business education, Executive MBA programs, part-time MBA programs, and executive education.
CURRENT METHODOLOGY WAS ADOPTED TWO YEARS AGO
The current methodology, adopted two years ago, puts a 35% weight on a survey of MBA employers who are asked to identify just ten schools and assess the track record of graduates in their companies. Last year Harvard won this contest, followed by MIT Sloan, Chicago Booth, Wharton, and Columbia Business School. A survey completed by school alumni accounts for 30% of the ranking and is based on the increase in their median compensation over their pre-MBA pay, job satisfaction, and their opinions of the MBA experience. The top alumni survey winners last eyar were Stanford, Berkeley, Harvard, Rice, and Emory’s Goizueta School.
Businessweek then adds in a separate student survey of recent graduates that is weighted 15%. That survey includes 27 questions that contribute to a school’s rank. Indiana Kelley topped the student survey in 2016, followed by UVA’s Darden School, SMU, Georgia Tech, and USC’s Marshall School of Business.
Finally, Businessweek tosses in two metrics from school reports: the job placement rate three months after graduation and starting salaries, each counting for 10% of the methodology. There’s a problem here as well. The job placement data can oddly penalize schools where highly confident graduates hold out for their ideal jobs, refusing to accept offers they don’t want. Stanford, for example, ranked 57th in job placement last year, while Harvard ranked 35th. It’s not because Harvard and Stanford MBAs are having trouble finding jobs. It’s because more of them are wanting to land a job at early stage companies or other firms that do just-in-time hiring. They are super choosy about what they’re after.
FLAWS IN THE RECRUITER SURVEY ALSO RESULT FROM CHANGES IN METHODOLOGY
Yet, the methodology interprets that fact in a negative way. Because the magazine is collecting this data before all the schools have published their 2017 employment reports, this information also is already a year old. That is also a consequence of a change in methodology because the magazine used to go out of its way to collect the latest, up-to-date employment metrics, even before they were officially published by the schools.
The single greatest flaw in the methodology, however, is the survey of employers. Instead of sending a single survey to each major MBA employer—to the corporate official who oversees MBA hiring—Businessweek surveys every recruiter who comes on a business school campus, getting these lists from the schools. However, most companies sent to the schools alumni who work for them. So having alumni fill out these surveys causes significant bias in the sample. This change occurred in 2014, causing Businessweek to concede that alumni tended to rate their own schools “significantly more favorably than non-alumni.”
The alumni and student surveys also are less than a true measure of a school’s quality because respondents know their answers will impact their alma mater’s standing in the ranking. As a result, they are likely provide less-than-candid answers. That bias occurs across the sample but it is a fact that every year several schools have hard-to-explain scores that seem to defy logic. A few disgruntled alums or students, moreover, can also have a disproportionate impact on the satisfaction rates in the alumni and student polls.
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