Ten Biggest Surprises In Bloomberg Businessweek’s 2017 MBA Ranking

Plenty of surprises in Bloomberg Businessweek’s 2017 MBA ranking. Here are our top ten

Every business school ranking produces results that are often counter-intuitive, if not completely screwy. This week’s 2017 MBA ranking by Bloomberg Businessweek is no exception. Is Chicago Booth really better than Stanford’s Graduate School of Business? Are UC-Berkeley and Yale School of Management no longer Top Ten business schools? Has the famed Trojan Network at the University of Southern California lost its mojo? The business school’s 58th place ranking by alumni would make you think that.

Even at schools where there is cause for celebration, deans know that this year’s gift could be next year’s public relations disaster. Last year, Indiana University’s Kelley School of Business was ranked first by MBA students in Businessweek‘s survey of the latest graduating class. This year, Kelley is unexplainably 32nd. Is Rutgers Business School really the second best MBA program in the U.S. for job placement?  Which business schools were overvalued by this new ranking and which ones were undervalued? The answer to these questions will surprise you–and there are many more surprises  buried in the data crunched by Businessweek to produce its ranking of the top 85 U.S. full-time MBA programs.

Here are our top ten of the biggest surprises:

Stanford University Graduate School of Business – Ethan Baron photo

1) The Mystery Of Stanford Graduate School of Business

If you want to find just one reason not to take the 2017 Bloomberg Businessweek MBA ranking too seriously look at what you might call this year’s Stanford Slump. The West Coast rival to Harvard Business School slipped out of second place to rank fifth, behind Chicago Booth, MIT Sloan, and Wharton.

Forget for a moment that precious few people admitted to Stanford would choose to endure a pair of winters in Chicago, Cambridge or Philadelphia, with the exception of some hearty souls that would say ‘yes’ to HBS in Boston. Instead, let’s go to Businessweek’s own data to make the argument that something is absolutely screwy with this ranking.

Fact One: How is it even remotely possible that employers routinely pay Stanford MBAs more than the graduates of any other business school in the world yet Businessweek’s survey of corporate recruiters ranks the GSB 20th behind Texas A&M, Syracuse, Purdue, Penn State, Rice and 14 other schools? Last year, Stanford grads pulled down record starting compensation of $163,827, even higher than the $158,080 totals for Harvard MBAs.

Fact Two: How can a school that is ranked first in Businessweek’s alumni survey also place 16th  in the magazine’s survey of students who graduated this year? Is it possible that it takes a few years away from the Silicon Valley campus to fully appreciate one’s stay there? The 16th place finish puts Stanford behind No. 2 William & Mary, No. 6, University of Southern California, No. 7 Southern Methodist, and No. 8 Carnegie Mellon.

The first issue reveals the deep flaws in the way Businessweek surveys recruiters. It essentially tossed a survey to anyone who visits a campus to recruit students. Most business school recruiters are alumni of the schools from which they recruit. If you’re from an underdog MBA program, you’re probably far more inclined to respond to the survey. The inherent bias in the sample explains why the results have little to no credibility.  It also doesn’t help Stanford that many of its MBAs do one-off searches with startups, VC firms and mid-stage companies that don’t come to campus to recruit and are not captured in Businessweek’s recruiter sample.

What about that disparity between students and alumni on the school? Chaulk it up to two problematic challenges that exist in every ranking survey that goes to students and alumni. First, they know their answers will be used to rank their alma maters. So there is a tendency to be less than truthful in their responses. Unless you’ve had a truly disappointing experience with your school, you are highly unlikely to ding it. Secondly, the likelihood of cheerleading means that the scores for each school’s stakeholders are so close together as to be statistically meaningless. There just isn’t enough variation between and among the schools to get a credible result. So even Stanford’s No. 1 alumni rank doesn’t mean all that much. Neither does the school’s 16th place finish in the student survey.

wharton mba letters of recommendation

Outside the Wharton School on the University of Pennsylvania campus – Ethan Baron photo

2) Wharton’s Resurgence

Sweep aside the quirky and unusual findings in this ranking and go to the biggest news: Wharton’s four-place improvement to finish second, just behind Harvard Business School. To gain its second place finish, Wharton had to zoom past Stanford, Duke, Chicago and Dartmouth. That’s a pretty big move in a single year at the top of the rankings where it is typically harder for a school to score either a major improvement or a big disappointment.

How Wharton climbed into second place tells you more about the Businessweek ranking than it does about anything else. Wharton’s improvements largely came in the rankings’ student surveys, where Wharton went from 30th place last year to 17th this year, and in post-graduation placement data, where Wharton went from 21st place to sixth. The school had the same recruiter rank of fourth and did slightly less well with alumni, ranking 11th this year versus 10th a year ago. It also had a one place improvement in salary, moving to third from fourth.

Only last year, at a town hall meeting with students in October, Dean Geoffrey Garrett and Vice Dean of the MBA program Howie Kaufold found themselves addressing student concerns over the school’s ranking declines in recent years. “The process of rankings is pretty arbitrary,” conceded Kaufold at the session, “but no apologies about it –- our goal is to be at the top of all those rankings if we can.”

Ever since Dean Garrett’s arrival in July of 2014, the school has lost ground in every major ranking with only one exception: the Financial Times where it eked out a one-place gain. Even more disturbing for Whartonites, Chicago Booth has consistently outranked the school, giving rise to conversations that a new Big Three has emerged with Harvard, Stanford and Booth in that category. Last year, the Poets&Quants‘ composite ranking saw Wharton tied for fourth place with Kellogg after what some observers considered the new Big Three.

Well, this year is a very different story. Besides tying Harvard Business School in the U.S. News survey for number one, climbing three places from a fourth place finish a year earlier, the school also topped the Forbes ranking this year, moving up six places from seventh. The school also soared eight places on The Economist list to rank fourth from 12th. And Wharton improved its standing on the Financial Times list, edging up one place to rank third this year. All told, the school has moved up 21 places in all five of the most influential rankings, the biggest gainer this year.

DON’T MISS: THE 2017 BLOOMBERG BUSINESSWEEK MBA RANKING

  • Woo, go W! Resurging like the Philly tough-guy we know it to be.

  • RoadWarrior

    Don’t blame the messenger, John is fair in his Wharton coverage. Major news are Wharton driven: Highest debt on graduation, lowish student satisfaction, complaints about teaching quality, staff turnover (admissions and academics), Chicago catching up, fewer finance opps etc. It is in Wharton’s hands to change for better.

  • I presume you mean Sandy Kreisberg. We don’t do business with Sandy. He is a valuable source as one of the leading admission consultants. He like his candor, his intelligence, and his on-the-mark assessments. But there is no exchange of funds with Sandy.

  • Ryan Adams

    do you have business with $andy?

  • Yes,But…

    Agreed that it’s HSW for some extremely elite employers (e.g. PE firms) but even top 3 consulting firms and banks take an inordinate number of people from Kellogg Booth and Columbia. I wouldn’t say HSW has an “edge” over the remaining M7 for those spots.

  • Kitten

    No matter how you slice it, there’s no way to logically place H ahead of W after this year’s rankings tsunami. Even if P&Q altered the methodology, it still wouldn’t be enough. W has finally earned P&Q #1. Count on it.

  • yep

    That’s if you even have a shot of getting in. Just stay put.

  • If you do, you would be among a good number of other applicants who think the same way. However, the question to ask yourself is why you want an MBA and would an MBA from another peer school allow you to accomplish your career and professional goals?

  • Techdude

    If I do end up applying, I’ll definitely stay put if I don’t get into HSW.

  • tenX

    Stanford is is its deserved place. Its rank here is supported by the most reliable ranking publication, US News which ranked Stanford #4. It is really confusing based on what people would consider it on par with Harvard?!

  • yan

    “this business school stuff is relatively new to me”. It explains a lot about your environment. Stay there.

  • Why in the world would you ever come to that conclusion? Of course, I do not abhor Wharton or any school. That is total nonsense.

  • Techdude

    I’m not even an MBA student yet (so I have no dog in this fight), but it’s pretty clear John abhors Wharton. What did they do to you, John? Did they not reply to your emails? lmao

    At my unicorn, management is dominated by HSW, with a peppering of Kellogg/Booth/Sloan/Haas kids, but it’s not even close. Not sure why John fights so hard to push an alternative, warped narrative. No one at my company legitimately looks at Booth at the same level of HSW, including those like myself on the tech side of the business (this business school stuff is relatively new to me). In speaking to my friends in finance and consulting, they share a similar sentiment. In fact, amongst my friends and colleagues who applied to business school this year and the past few years, most applied exclusively to HSW; those that did apply to Booth did so as their safety.

  • There are two portions of the recruiter methodology: As BW says itself, “the employer score was based on two components: average rating by employers (a measure of the school’s quality in the eyes of recruiters) and the sum of ratings the school received (a measure of its reach)…” And as you quote it yourself: “Alumni opinions of their own schools remained a factor in the average (quality) rating.”

    After we raised this issue a couple of years ago, Businessweek changed its calculation method. Instead of alumni bias impacting the entire recruiter score, it now only impacts half of it. But it is still a very big factor here given half the weight and we suspect that even adjusting for it on the other half doesn’t completely wipe it out. How so? While BW can cancel out a score given by an alum to their alma mater, it can’t cancel out any of the other schools chosen by the alumni recruiter. It is very possible that an alum, being completely loyal to his or her school, would not name all the peer competitors to their alma mater to benefit their school.

  • IronyMan

    It’s going to be hilarious when P&Q has to release their ranking, and Wharton is #2 right behind HBS. They hate Wharton so much!

  • Guest

    From Businessweek’s website on its methodoloy: “It’s common for B-school alumni to take up the task of recruiting from their alma maters for their employers. Alumni, though, tend to rate their own schools significantly more favorably than do non-alumni who rate the school. Receiving favorable ratings from its alumni says little about a school’s reach among recruiters, so we excluded alumni ratings when measuring reach. Alumni opinions of their own schools remained a factor in the average (quality) rating”
    Here, at P&Q, it’s repeated again and again that alumni recruiter influence the result. Based on my interpretation of what is said at BW’s website, this is not the case. Can someone explain this?

  • Cam

    On a semi-related note, most salary averages don’t take cost of living into account do they? San Fran is way more than say Austin or even to a degree, Boston. So I would expect the salary figures to likely be a bit higher to reflect this (considering how many people work in the region they went to school in).

  • CuriousGeorge

    Assuming you disagree with USNews rankings as well which ranks Stanford lower than Wharton and Chicago https://www.usnews.com/best-graduate-schools/top-business-schools/mba-rankings