3) The Greatest Irony Of Any MBA Ranking Ever?
If you had to guess which school scored the best ranking improvement on the new U.S. News list, you would never have been able to get the answer right. That’s because the school—Purdue University’s Krannert School of Business—announced last June that it would effectively toss in the towel on its two-year residential MBA offering. The decision to at least temporarily shut down the program came after years of application declines, enrollment drops, red ink, and oddly enough an earlier free fall in U.S. News‘ rankings.
But the school still enrolled an incoming class of new MBA students in the fall that was meant to be the last full-time cohort at Purdue, unless the school changes its mind. The stats for that class, plus the employment report for its 2020 graduates was so good that Purdue’s MBA program soared 36 places back into the Top 50. From a lowly 80th place finish in 2020, the school’s MBA program is now ranked 44th best in the nation.
That spectacular rise was the highest for any program on the ranking. The next largest year-over-year gain was just 16 spots, achieved by Fordham University’s full-time MBA program. Krannert Dean David Hummels attributed Purdue’s decision to “pause” the program to several factors, including a 70% plunge in application volume over the past ten years. “Nationwide, applications and admissions for full-time MBA programs are steadily declining as international students opt for study outside the U.S. and domestic students opt for online programs,” he explained. “Several other schools (including Iowa and Illinois in the Big Ten) have dropped their residential MBA programs, and many others have dramatically reduced the size of their MBA cohorts.”
WILL PURDUE REVISIT ITS DECISION TO TEMPORARILY SHUTDOWN ITS MBA MBA PROGRAM?
The program fell into the red. “At the same time,” added Hummels, “increased competition for applicants, particularly domestic students, has resulted in escalating financial commitments for marketing, assistantships and scholarships. We now spend considerably more to recruit a class than we generate in tuition revenue from that class. That is simply not sustainable, particularly in light of significant financial adjustments that are necessary in the wake of the COVID pandemic.”
Of course, the decision was made before the pandemic drove big increases in MBA application volumes at many business schools. And Hummels could never have anticipated that Krannert would experience the biggest rankings increase of any school on this year’s U.S. News’ list.
Will it change anything? Perhaps not. But there are plenty of students and alumni of the program who will be using this bit of good news to convince the dean otherwise. A former insider and now outside observer tells Poets&Quants: “The dramatic rise in Purdue’s rankings is a direct result of the high quality of students Krannert recruited and Purdue’s overall sterling academic reputation. Further proof to me that the decision to shutter the FT MBA program was short-sighted.”
Adds a spokesperson for the school, “The jump is a pleasant occurrence, but it doesn’t change our timeline or process about deliberating the future of the program. Those internal discussions are still ongoing.”
4) USC Marshall Earns LA Bragging Rights
In 2019, Dean Geoffrey Garrett was recruited from Wharton School to turn USC’s Marshall School into a powerhouse. Why not? Marshall has all the elements: sunny weather, a diverse and dynamic business infrastructure, and the Trojan Network – perhaps the most loyal, engaged, and active alumni base west of New Hampshire. Even more, USC Marshall has been on a roll – and the rankings prove it. In 2016, the MBA program ranked 31st in the United States according to U.S. News. Three years later, the school had climbed to 17th. In the 2022 U.S. News ranking, USC Marshall took another step – with big ramifications.
In a year with minimal movement, USC Marshall pulled into a tie for 16th, up a spot from the previous year. In the process, the school displaced UCLA’s Anderson School, its cross-town rival, to 18th. In other words, Marshall snapped up bragging rights as the top graduate business school in the second-largest metropolitan area of the United States. Make no mistake: the Marshall marketing team – and especially its alumni – will be milking this changing of the guard in the coming months.
In reality, USC Marshall edged out UCLA Anderson by just one index point. Recruiters – the consumers of MBA talent who are closest to judge the quality of graduates – actually scored Anderson higher (3.9 vs. 3.6). At the same time, Marshall and Anderson tied for average GMAT score (707). However, USC Marshall differentiated itself in outcomes. Notably, the program produced far higher placement within three months of graduation: 91.0% vs. 78.3%. At the same time, Marshall grads generated higher first-year pay than their Anderson counterparts ($156,581 vs. $154,511). Oh – and it’s much harder to earn a spot at USC Marshall, with 10 points separating the programs in acceptance rate (24.3% vs. 34.4%).
MARSHALL COMPARES FAVORABLY IN SEVERAL KEY BENCHMARKS WITH HIGHER RANKED SCHOOLS
More important, USC Marshall is poised to climb further in the coming years. That’s because it compares favorably against MBA programs ranked above it in several key benchmarks. Take selectivity, which accounts for 25% of the U.S. News ranking’s weight. Marshall’s acceptance rate is lower than 10 of the MBA programs ranked above it. In terms of GMAT, Marshall scores higher than 4 of the 5 programs ranked above it under the Top 10.
However, the program is being held down by two factors. First, 25% of the ranking is based on a survey of business school deans and MBA directors – which U.S. News calls Peer Assessment. These are individuals who are not part of the school’s day-to-day operation. Here, USC Marshall produced a 3.9 average score on a 5-point scale – the lowest score among Top 20 MBA programs. While this measure can be dismissed as a lagging indicator, average pay is a different story. In this measure, USC Marshall graduates earn less than their peers in every program ranked above them. The gaps are stunningly wide. Against 15th-ranked Cornell Johnson, for example, the difference is $15,673 less. Compared to the University of Virginia and the University of Michigan, which tied for 13th, the difference in starting pay is $12,609 and $7,459 respectively.
In other words, USC Marshall must boost starting pay and recruiter scores to take that next step. Make no mistake: there are plenty of business schools nipping at Marshall’s heels. For one, Carnegie Mellon’s Tepper School inched up three spots to pull into a tie with USC Marshall. That was courtesy of a lower acceptance rate (27.7% vs. 42.8%) and higher starting pay ($165,540 vs. $148,581) – in a pandemic year, no less. As always, the sleeping giant – Georgetown University’s McDonough School – is lurking just outside the Top 20. This year, McDonough rose from 25 to 21. Based in DC – where you’ll find an outpost for nearly every ‘name’ employer – the school saw its peer and recruiter scores increase by .10 of a point, while its acceptance rate fell by 3.5%. Even more, McDonough grads received a boost in starting pay, going from $148,121 to $155,540.
Translation: Carnegie Mellon Tepper and Georgetown McDonough grads have caught the eye of employers – the exact area where USC Marshall has been struggling. That could mean that Marshall could spend the next year fending off upstarts instead of climbing another rung.