INSEAD Tops New Financial Times MBA Ranking For The Third Time

Washington University, Olin Business School, finished first in the FT’s ranking of academic research


The Financial Times also does an analysis of the published research by a school’s faculty that is given a 10% weight in the overall ranking. A school’s research rank is based on the number of articles published by current full-time faculty members in 50 journals between January 2018 and August 2020. The rank combines the absolute number of publications with the number weighted relative to the faculty’s size.

This year, INSEAD cracked the U.S. party. For years, the top ten has been completely dominated by U.S. players. But once you take out some of those heavyweights, the European school zoomed up 15 places to rank third. The University of Toronto’s Rotman School of Management also made the top ten, moving up nine places to rank tenth.

The surprise winner in research this year? Washington University’s Olin School of Business. Olin gained eight spots to take over the top position (see below table). The results here can vary significantly year-over-year because the period measured changes every year and some schools lose highly productive professors to rivals or retirement. Among this year’s top 25 in research, Yale School of Management made the biggest advance, gaining 25 places to rank 11th from 36th last year. That improvement alone helped Yale achieve its highest rank ever in the FT ranking.


Rankings are controversial for many reasons but often because they put all programs in the same boat as if they are equal to each other. Just in the FT‘s top ten, for example, the largest MBA program at INSEAD graduated 1,029 MBAs last year, while the smallest at CEIBs put only 158 MBA students into the market. It would almost certainly be easier to recruit, enroll, teach and place in jobs less than 160 graduates than it would be to do the same for more than 1,000 each year yet the larger schools get no credit for this accomplishment.

The Financial Times global ranking is the most closely followed in Europe and Asia, while U.S. News’ entirely U.S.-centric ranking has become the most influential in the U.S. The FT’s methodology 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. This year is the second with a new metric added for the first time last year: Corporate Social Responsibility. With a weight of just 3%, it is based on the proportion of teaching hours from core courses dedicated to CSR, ethics, social and environmental issues. For what it’s worth, IESE Business School topped this metric, followed by Ohio State, Edhec in France, UVA Darden, and Alliance Manchester in the United Kingdom.


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 salary data — the most heavily weighted metric in the methodology. Such currency gymnastics favor schools that supply graduates to countries with high rates of poverty. This adjustment has an especially negative impact on 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 PPP filter.

The MBA program delivering the largest salary rise for alumni three years after graduation was Fudan University in China. According to the FT’s numbers, Fudan MBAs saw an average 190% jump from their pre-MBA salaries to the equivalent of $121,198. While Asian schools tend to be at the top of this list, several U.S. MBA programs managed to post impressive pay stats even when adjusted by the FT. The U.S. program with the largest salary jump was Michigan State University’s Broad College of Business. MBA alums saw their salaries rise 172% to a weighted average of $130,720.

Among other U.S. programs scoring highly on this measure were UVA Darden, Rochester Simon, and Brigham Young Marriott. MBA alums of all three schools reported that their base salaries rose by 135% above their pre-MBA pay to $179,176, $132,084 and $133,491, respectively. Penn State, Yale and Georgetown MBA alums were next, with increases above 130% each.

It’s important to note that even though the FT is putting a 40% weight on these pay numbers, they fail to account for total compensation — just salary. In the U.S., a good many MBAs from elite schools often get stock options and significant annual bonuses that would put their schools well ahead of many of the institutions that are routinely ranked higher by the Financial Times.


Unlike U.S. News, moreover, the FT pays no attention at all to incoming student quality in its ranking — another reason why U.S. schools do less well on this list. GMAT and GRE scores and undergraduate grade point averages, all key components of a business school admission decisions — are ignored. So are acceptance rates, which also tend to be lower at many of the best U.S. schools.

Another issue with the FT ranking is that the newspaper fails to reveal the underlying index scores that allow it to crank out the numerical rankings. Those scores show whether a school’s rank is statistically different among other schools ranked nearby. In most rankings, these index scores tend to cluster in close bands and often show that there is no meaningful statistical difference between a school ranked 45th and one ranked 50th. The FT concedes that clustering is a reality and that there are four different groups of schools on its list of the top 100.

The newspaper made some adjustments to this year’s ranking methodology due to COVID. The FT removed any credit for short-term study trips of less than one month. “That reflected both the difficulty of such travel during the pandemic and growing calls to take into account concerns over climate change by reducing carbon emissions,” according to the newspaper “Scores for longer-term placements have also been adjusted in light of these exceptional times and are calculated using a three-year average.”

In a footnote, the newspaper points out that “some 202 points separate the top programme, at Insead, from the school ranked 100. The schools are divided into four tiers. Business schools in tiers l and ll score above the average for the cohort, and tiers lll and lV are below it. The difference in scores between schools ranked consecutively is greater within tiers l and lV than in tiers ll and lll. Tier l includes 14 schools from INSEAD to National University of Singapore Business School. Tier ll includes schools from Cornell University: Johnson, ranked 15, to Babson College: Olin in 46nd position. Tier lll, headed by Pennsylvania State University: Smeal, spans schools ranked 47 to 82. Tier lV includes schools from Wisconsin School of Business in 83th place to Queen’s University: Smith at 100.” Just how close is unknown because the FT won’t publish the index numbers for each school.

Questions about this article? Email us or leave a comment below.