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3. U.S. News & World Report. The magazine ranks U.S. schools every year, using a vast amount of information and data that ultimately pots Harvard Business School in the first spot. The methodology takes into account its own survey of b-school deans and MBA directors (25% of the score), corporate recruiters (15%), starting salaries and bonuses (14%), employment rates at and shortly after graduation (14% to 7%), student GMATs (about 16%), undergrad GPAs (about 8%), and the percentage of applicants who are accepted to a school (a little over 1%). If you want a ranking that pretty much includes all the obvious factors of quality, this is your best bet. In it’s latest survey, released in mid-April of 2010, U.S. News ranked 97 schools. The latest top five in the 2010 survey has Harvard and Stanford tied as number one and Chicago and Wharton tied at number five:

1.Harvard Business School
2.Stanford University
3.MIT (Sloan)
4.Northwestern University (Kellogg)
5.University of Chicago (Booth)
6.University of Pennsylvania (Wharton)

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Pro: U.S. News puts a good deal of effort into the ranking, cranks it out on an annual basis, and measures a lot of different factors that are clear indicators of quality. There are a lot of ties in its ranking of schools (four schools, for example, are tied at rank 33, while another four are tied at rank 40). That’s to be applauded because U.S. News is acknowledging that the differences are so small among these schools that it would be intellectually dishonest to say one is better than the other.

Con: About 60% of the ranking is based on data supplied by schools who therefore have plenty of reason to present the information in the best possible light to get a better ranking. There’s no way to independently check or audit the data provided by business schools. The ranking is completely U.S.-centric when there are many non-U.S. schools with better programs not listed at all. Finally, some of the ingredients in this ranking stew seem a bit silly: Why even bother to include the percentage of applicants accepted when you weight it at little more than one percent?

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4. Financial Times. This 2010 ranking is the 12th year the Financial Times has ranked the best MBA schools. The winner: London Business School. The ranking is based on data collected from business schools and from alums three years after graduation. This survey includes responses from 8,001 alums of the Class of 2006 those most of the results are combined with two previous class surveys. The ranking also includes a research component, weighted at 10%, counting papers written by the faculty of each school in 40 academic journals during the past three years. For my money, it’s the best all-inclusive global ranking of the top 100 business schools, far better than The Economist list.

1.London Business School
2.University of Pennsylvania (Wharton)
3.Harvard Business School
4.Stanford University
5.Insead in France and Singapore

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Pro: Arguably the single best global ranking of business schools which gives you a very good read on what the best MBA-granting institutions are around the world.

Con: The Financial Times is trying so hard to be global that it ranks many non-U.S. and European schools far too highly over institutions that have significantly better MBA programs. It’s just not even credible to think that London Business School can give you a better MBA education than Harvard, Stanford, Wharton, or Northwestern. The FT ranking also puts far too much weight (40%) on how much alums of these schools make three years after graduation. MBA compensation, after all, has more to do with what fields grads go into (investment banking and consulting usually pay the most) than the quality of the education. Insiders also believe this data, reported to the FT by the schools, is being fudged by some schools who also include in the number their Executive MBA grads who already have high paid jobs. For example, the reported “weighted salary” for an MBA from The Indian School of Business is $141,291, a sum that exceeds what MBAs are making, at least according to the FT, at Oxford, Cambridge, Northwestern, Berkeley, Duke, Michigan, and New York University, among many of the other top schools in the world. It simply strains credulity.

The FT also includes in its ranking other factors that have no impact on quality, such as the percentage of women faculty at a school. It may be politically correct to toss a factor like that into the mix, but you can’t presume it means the MBA program is less valuable because there are fewer female instructors on the faculty. The FT’s own methodology fails to clearly explain all the data it uses to rank schools so there’s a bit of a black box game. It notes, for example, that “eleven of the ranking criteria are based on data” from business schools. But it only mentions four of these 11 criteria, such as percentage of grads employed three months after graduation and an unexplained “FT doctoral rank,” whatever that means. The heavy reliance on unaudited data from schools also is suspect because some schools are likely to report information in the best possible light to gain a higher ranking.

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5. The Economist. This is probably the most flawed, if not downright silly, of all the MBA rankings cranked out by a major media brand. The magazine is now up to its eighth annual ranking of full-time MBA programs. The ranking is based 20% on student and alumni surveys and 80% on data provided by the schools. There are some incredibly peculiar results in this ranking, which raise significant credibility issues. Pretty much no one in business education would agree that IESE is the best business school in the world or that Berkeley is better than Harvard, Dartmouth or Stanford. Or consider The Economist’s ranking for the University of California at Los Angeles. The Economist ranks this school 50th behind Boston University, University of Texas at Austin, and Georgetown University. Yet, BusinessWeek and U.S. News & World Report rank UCLA’s business school at 14th and the Financial Times puts it at 33. The Economist list ranks 100 top schools.

1.IESE Business School in Spain
2.IMD in Switzerland
3.University of California—Berkeley (Haas)
4.University of Chicago (Booth)
5.Harvard Business School

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Pro: Takes a global perspective on business school education.

Con: The odd results of this ranking raise meaningful credibility issues with the methodology and the accuracy of the data some of these schools are providing to The Economist. Because 80% of the ranking is based on unaudited information from business schools, there’s a high likelihood that some data has been fudged. The Economist also throws into its ranking formula criteria that has little to do with the quality of education, such as the percentages of international and female students (giving these two questions alone nearly a 17% of the weight in the ranking), the range of overseas exchange programs (a 6.25% weight), and the number of languages offered (also given a 6.25% weight). That latter would be something more appropriate to undergraduate education.

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6. The Wall Street Journal. This prominent business newspaper ranked full-time MBA programs for seven years, but stopped regularly doing an annual ranking with the September, 2007, list, probably because its flawed methodology led to quirky results and significant criticism. We’re ranking it nonetheless because many schools (especially those faring quite well on the list) still include this ranking in their marketing materials. The Journal ranking was conducted by pollster Harris Interactive which surveyed recruiters on 21 different attributes, including students’ leadership potential and strategic thinking, their previous work experience, the faculty and the curriculum, and the career services office.

Pro: It’s simple to understand, measuring only the views of the recruiters who come to campus to hire MBAs.

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Con: The Journal got its list of recruiters to survey from the business schools, which provided the newspaper with the names of the actual recruiters, who showed up on campus. Most major MBA recruiters, however, send alums back to their schools to interview candidates. If you merely survey the recruiters who visit a particular school, you’re surveying entirely biased people. Would a Wharton MBA who recruits only Wharton students rate his or her school poorly? Not likely. In fact, what happened is that single companies that recruit MBAs would get numerous votes in the Journal survey—each from the alum of the school they recruit from. The result: this was less a ranking of the best business schools and more a ranking of the loyalty of a school’s graduates who happen to recruit MBAs at their alma maters.  Dartmouth’s Tuck School placed first in this survey four times largely because its small graduating classes and intimate educational setting make its alums more loyal than those from Harvard, which shockingly ranked 14th, or Stanford, which just as shockingly ranked 19th.  In the years that the Journal did this study, it would tell readers that it surveyed more than 2,000 recruiters. Problem is, there’s less than 300 companies in the world that actively recruit MBAs from enough schools to make a legitimate judgment about the quality of the institutions and the MBAs they produce.

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BusinessWeek, in contrast, surveys far fewer corporate recruiters because it spends months finding out who are in charge of MBA recruitment and development at all the companies, which make the market for these graduates. Only then does BusinessWeek survey this group, getting the opinions of the top executive for MBA hiring in each organization—not alums that revisit their schools to hire students. Thank goodness the Journal had the sense to drop out of the ranking game because this one was so flawed it lacked all credibility. The top five in the last full-time MBA ranking by the Wall Street Journal:

1.Dartmouth College (Tuck)
2.University of California—Berkeley (Haas)
3.Columbia University
4.Carnegie-Mellon University
5.Massachusetts Institute of Technology (Sloan)