Very good article about b-school ranking!

Take a large pinch of salt with the rankings
NEWSPAPER and magazine rankings matter commercially to business schools. The Judge Institute in Cambridge was out in the cold for years because its course was simply too new for its worth to be evaluated. “It counted against us,” says the Judge’s MBA director, Richard Baker. “When we were in the rankings, we got an increase in applications.”
So rankings are taken seriously. Indeed, business schools now have rankings committees and hold meetings to reassure anxious students that a 2-point slippage this year will not affect their education or careers. Rankings also matter to MBA graduates, who are asked by their old business schools for information about salaries and careers. Graduates have a natural interest in preserving the reputation of their alma mater.

What may be overlooked is that the rankings also matter to the media that produce them. The interest they arouse is used as a marketing tool to penetrate new areas.
More and more publications are playing this game. MBA programmes are now ranked by Business Week, The Wall Street Journal, the Financial Times, the Economist Intelligence Unit (which publishes Which MBA?) and US News and World Report. Some of these rankings should come with a polywrapped pinch of salt. The way they are compiled has set howls of protest echoing along the normally silent corridors of European business schools.
Each ranking exercise demands free cooperation from staff within business schools (and has the merit of forcing schools to keep their data polished). But cooperation is beginning to be withdrawn.
At a meeting in London last autumn 12 leading European schools expressed their unhappiness with the Wall Street Journals’s methodology. Insead, based near Paris, often comes top of the European rankings, but decided not to take part in this year’s WSJ survey. Manchester Business School also withdrew its cooperation.
The reason is that the WSJ counts as a recruiter any individual who has hired an MBA graduate. There is nothing to stop a school asking all the alumni of one school in any one firm of consultants to respond to the survey. Essentially, the more effort a school puts in, the better its results will be. And a large percentage of The Wall Street Journal’s recruiter sample is American.
Insead’s view has been on its website for all to see. “Last year,” it says, “Insead was ranked no 37 in the WSJ recruiter ranking. This year (2003), we were not included in the top 50. The WSJ ranking strongly contradicts that of other respected rankings. The Insead MBA Programme is ranked sixth worldwide and no 1 in Europe/Asia by the Financial Times. It is difficult for us to understand how we can be rated first, sixth and then outside the top 50 simultaneously. . . ”
Last week Insead and the WSJ, in true MBA fashion, were striking a deal. The newspaper had proposed a series of concessions, agreeing to rank North American and non-North American schools separately; to add a new ranking comparing schools that attract international recruiters; and to shorten the survey for European recruiters. Insead will join in next year.“The Wall Street Journal survey will continue to focus exclusively on what recruiters, the consumers of MBA talent, think of MBA programs,” the WSJ told The Times. “As in years past, we ask schools to submit the names of all those who recruit their students. We combine those names in a single database, which is representative of the companies that do the recruiting - and the number of names per any individual company reflects the amount of recruiting activity for that company. We assume that those companies that do more recruiting will have more names in our database. We've discovered that European schools attract fewer recruiters than many US schools.”
Business Week will produce its influential survey this autumn. “Except in rare cases, our rule is one survey per company, so no company gets two votes,” it says.
Another ranking is published by the Economist Intelligence Unit (EIU), which also produces the handbook Which MBA? Its latest ranking had some surprising omissions: Harvard and Wharton, two of America’s best schools, were not in there. The OU Business School, Britain’s biggest MBA provider, was similarly absent.
The EIU’s survey carries the statement: “Schools were asked to provide both the average salary of incoming students and the average salary they received after graduation. A number of schools were unable to provide all this information, and in these cases the EIU has included an estimate based on its own research.”
Prospective students might be forgiven for questioning a survey with such lacunae. They might prefer to rely on rankings such as those of Forbes, the magazine whose only measure of an MBA is return on investment (higher salaries); or those of the Financial Times, whose survey is traditionally weighted 40 per cent towards salary increases. The FT survey is audited by KPMG, whose staff spent days in business schools going through figures – although even they they cannot verify the salary returns.
“Frankly, when you open some of these surveys they’re laughable,” says Graham Hastie, director of career service at London Business School, who was a recruiter at McKinsey, the consultants, for seven years before joining LBS. “They’ll come to me and say ‘Give me a list of recruiters’. I’ll give them a list of companies that recruit here and my key contact at each one. What I would do if I were trying to play their game would be to give them a list of all my friends at every one of the recruiters. One can influence one’s position and I don’t think that’s morally right.”
Students should also remember that it is in a publication’s interests that the headlines change from year to year. “Were the rankings to be the same every year it wouldn’t be news, would it?” says Hastie. “In order to use it you have to understand how a ranking is created. The FT ranking is very open. It’s very easy to interpret both the individual parts of the ranking and the overall ranking. Some of the other rankings are extremely opaque and the methodology is questionable at best.
“The other thing is not to get too upset about one or two point differences in the ranking. My advice to people is always to go to the best business school you can but that doesn’t mean no6 rather than no 8. Go to a top 10 school if you can get in; if you can’t, go to a top 20 school; if you can’t, go to a top 50 school.”
Sue Cox, dean of the Lancaster University Management School, is also chair of the Association of Business Schools. “Rankings are the bane of our lives,” she says. Though Lancaster is top-rated for research in Britain, she points out that some American surveys exclude international publications – just as they exclude international recruiters.
So the most reliable rankings focus on money. But is a salary rise the sole point of an MBA? “Ask our students!” says LBS’s Hastie. But Ian Hunter, of Henley Management College, where the students are usually older, demurs. “We believe that the MBA is an experience qualification. If we reduced the standards of experience we would get a lot more people and do rather better in the rankings. We prefer to stick to our guns and our strategy. The more rankings the merrier.”
At the heart of the rankings storm is a growing split between America, birthplace of the MBA, and Europe, where the classes are far more international. Most US MBAs are two-year courses but in Europe they are one-year. Younger people who take a two-year MBA go in with lower salaries, so the rise is greater.
“In many cases the American criteria for successful ranking simply don’t apply to European schools,” says Andy Jackson, head of careers at Cass Business School in London.
John McGee, associate dean for the Warwick MBA, says: “Rather than surveys that are commercially orientated, an impartial not-for-profit organisation should agree the most important criteria and a statistically valid methodology. This could be published annually as one unweighted table where potential MBA students can decide for themselves which criterion is most important.”
Meanwhile, the prospective student’s best guide to a business school is an accreditation by a body such as the Association of MBAs or Equis. But as an indication (no more) the 2003 rankings for full-time MBAs, assembled by Business Week, the Financial Times and Forbes, are aggregated here:
UNITED STATES 1 Harvard 2 Pennsylvania: Wharton 3 Chicago 4 Columbia 5 Northwestern: Kellog 6 Stanford 7 MIT: Sloan 8 Dartmouth: Tuck 9 Yale 10 NYU: Stern
EUROPE 1 Insead 2 IMD 3 London BS 4 IESE 5 Rotterdam 6 Cranfield 7 = Instituto de Empresa, HEC Paris (joint) 9 Cambridge (Judge) 10 Manchester BS