PAY AND PLACEMENT WEIGHTED HEAVILY BY THE RANKING
Of all the four ‘indexes’ by which schools are ranked, the clearest explanation for what Businessweek is doing occurs in the compensation category. For compensation, the editors are placing a 25% weight on survey questions and the remaining 75% on figures provided in surveys and year-old employment reports from business schools (even though 2019 data is pretty much available).
The 75% component consists of median salary after graduation (weighted 30%), median alumni current salary (22.5%), percentage of students seeking employment who were employed within three months of graduation (11.25%); percentage of students reporting salary information who received a bonus (5.625%), and median sign-on bonus (5.625%).
This approach puts significantly more importance on pay and placement. Two years ago, the rough equivalent of this category placed a 30% weight on these metrics vs. this year’s 38.5%. It weighed starting base salaries, adjusted for variations across industries and regions, at 10%, the increase in alumni compensation above pre-MBA levels 10%, and job placement three months after commencement at 10%.
WHAT THE TUCK?
How did Tuck jump 17 places in a single year? The school did significantly better on three index scores: learning, which more than doubled to 92.3 this year from 44.3 a year ago, entrepreneurship, which nearly doubled to 68.2 from 35.1, and a big improvement in networking to a score of 100, which placed Tuck first among all schools in this category, from 73.2 last year.
It’s worth noting that last year, the school ranked 25th in networking, a head-scratching outcome for sure, given the tight-knit reputation of the school’s alumni base and the extraordinarily high percentage of alums who participate in Tuck’s annual fundraising drives. It’s clear that last year’s ranking was a total anomaly because Tuck ranked seventh in 2017, fifth in 2016, and 14th in 2015.
Truth is, Tuck never deserved to plunge as much as it did last year–and this year’s overcorrection will likely raise a lot of skeptical eyebrows.
LOOKING UNDER THE HOOD: NOT A PRETTY PICTURE
The learning index, by the way, focuses on “the quality, depth, and range of instruction. We focus on whether the curriculum is applicable to real-world business situations; the degree of emphasis on innovation, problem-solving, and strategic thinking; the level of inspiration and support from instructors; class size; and collaboration.” That’s a lot of different things to measure, even though many would consider these issues the most important parts of a quality MBA experience. Yet, Businessweek reveals none of the actual data points on these metrics nor their weight in its learning category.
Yet, as disturbing as the overall ranking tends to be, it gets much worse when you begin to look under the hood of this ranking. The winner in the learning category, for example, would surprise many. It’s William & Mary’s MBA program, followed by UVA Darden, UT-Dallas Jindal, Rochester Simon, and Tuck. Where’s Harvard, Stanford, and Wharton on this measure? They rank 42nd, 29th, and 70th, respectively, behind the MBA programs at such schools as Tennessee (ranking 16th), Texas Tech (20th), and Utah (22nd). Penn State (33), SUNY at Buffalo (38), and Pepperdine (39) even trounce Harvard Business School. Those results have to make you wonder about the quality of the magazine’s survey responses from students and alumni who are completing these surveys not as discerning customers but rather cheerleading boosters.
Here is the question to ask yourself: Does Ole Miss’ 36-hour MBA program, which can be completed in one year and costs only $29,502 for a resident of Mississippi (or $68,958 for a non-resident) and has a total enrollment of 41 full-time students (with zero percent from outside the U.S., provide a better “learning” experience than Harvard Business School? That is certainly possible, though not likely given the resources and talent poured into the HBS experience. Yet, the Businessweek data contends that Ole Miss is not just better, but better by a good margin. Mississippi’s MBA program is ranked seventh-best on the magazine’s learning measure, with a score of 87.6. HBS, with its score of 65.9, is 42nd, 35 places behind Ole Miss.
FACTS VS. OPINIONS
Outside of the compensation index, the same troublesome patterns emerge in the other two areas–networking and entrepreneurship–that Businessweek attempts to measure. Few may quarrel with the top five in networking: Dartmouth, UCLA, Northwestern, Virginia, and Chicago. But get a little beyond the five and you’ll soon see some highly unlikely results. Does William & Mary and UT-Dallas really offer students and alumni better networking possibilities than Michigan’s Ross School of Business? Totally plausible, of course, but unlikely.
Is Maryland (ranked fifth) and Mississippi (ranked seventh) better at “entrepreneurship” than Harvard (19th) or Columbia Business School (20th)? According to Businessweek, Maryland and Ole Miss beat HBS and Columbia. In fact, according to the magazine’s data, Hult International Business School (ranked 40th in entrepreneurship) is better than Yale (41), Rice (42), NYU Stern (43), Northwestern Kellogg (45), and Duke Fuqua (58). Sorry, we’re not buying it.
What does this tell you? The subjective data derived from Businessweek‘s survey data is highly suspect. When you deal with facts–versus opinions–you obviously get more solid results. The top ten schools in “compensation” are pretty much the top ten schools: Stanford and Wharton are tied for first, followed by No. 3 Harvard, No. 4 MIT, No. 5 Dartmouth, No. 6 Chicago, No. 7 Columbia, No. 8 Northwestern, No. 9 NYU Stern, and No. 10 UC-Berkeley. Yet, even in compensation, Businessweek tends to screw up the result. While claiming that Stanford and Wharton are in a dead heat, tied for first, the magazine reveals that the median salary of a Stanford MBA is $142,000, $6K more than Wharton’s $136,000 median. Yet, they are tied–largely because the “compensation” index includes other variables including employment data. In any case, go to any of the other three indexes upon which this ranking is based and you are likely to either laugh or just shrug your shoulders.
THE LAST OF THE FIVE MOST INFLUENTIAL MBA RANKINGS
Three schools disappeared from the ranking this year, including San Diego State, which ranked 90th last year, Chapman University, which ranked 73rd in 2018, and the University of Illinois’ Gies College of Business, which recently decided to shut down its full-time MBA program to focus more attention on its online MBA. Last year, Gies ranked 69th.
Five new schools, meantime, jumped on the list: Hult International Business School debuted at a rank of 65th, Hofstra made its appearance in 89th place, followed by newcomer Brandeis University at 90th, Charleston at 91st, and Florida International in last place with a rank of 94th.
Only last week, The Economist’s 2019 MBA ranking came out, with Chicago Booth at the top of the list. The Businessweek ranking is the final of the five most influential MBA rankings to come out this year. It follows the Financial Times in January, U.S. News & World Report in March, and Forbes‘ biennial list in September. Stanford Graduate School of Business capped the FT list this year, while Wharton earned top honors in U.S. News. Both Forbes and The Economist awarded Chicago Booth top honors this year. Poets&Quants will then quickly follow with its composite ranking.