Do B-school rankings matter and what does it mean for me?
- Mar 11, 2015
- 4 min read
With the annual B-school rankings by US News and World Report out recently, there is renewed interest among applicants, students and alumni about where their school ranks. While there are some winners and losers, the most convincing change this year in the US News ranking is they have broken the tie for 1st place and Stanford is in sole possession of the #1 spot. We thought this was a good time to answer 3 questions on most prospective students’ mind:
Who are the winners and losers this year?
Why the differences between the different rankings and which ones should I pay attention to?
Do B-School rankings matter and what does it mean for me?
The 5 rankings Ingeneam tracks include US News, BusinessWeek, Financial Times, Economist and Forbes. Each has its own methodology, but in general, they use student ratings, recruiter ratings and some school reported data on GMAT, employment post-graduation and return on investment. We are partial towards Forbes (ROI methodology), Economist (recent, but comprehensive) and BusinessWeek (the oldest but also the ranking that throws some startling findings from time to time). We create a composite ranking for the US programs that averages out the quirkiness in the various methodologies and is the only ranking any prospective candidate needs to refer to.
In the US News ranking, Wharton dropped to 3rd from a tie for 1st and Tepper and McCombs also slipped a couple of spots. Else, there were no surprises in the top-20 US programs. When FT released its rankings in Jan 2015, there were no surprises whatsoever, with hardly any school moving more than 2 spots except Emory which dropped 6 spots to flirt with mid-tier schools. When BusinessWeek released it latest bi-annual rankings in Nov 2014, there were dramatic shifts within the top-20 with Yale moving up 15 spots to #6 and Columbia getting into the top-5. On the flip side, Darden was the biggest loser moving down 10 spots and barely hanging on to the top-20 and Harvard, Johnson and Stern all moving down 6 spots. Of course, the biggest surprise was Duke moving up 5 spots to take #1! And finally, Economist also updated its rankings in Oct 2014, where Kellogg and Yale moved up 3 spots (with significant upgrades in 2 of 4 rankings, we believe Dean Snyder at Yale is repeating the magic he performed at Booth 15 or so years ago when one of our advisors was in attendance). Johnson dropping 6 spots to #17 and McCombs dropping out of the top-20 were the disappointments in the Economist rankings. When all is said and done, in our composite rankings, Yale is by far the biggest winner moving 4 spots up to #12 and Darden dropping out of the top-10 to end up at #13.
Why then do the rankings jump around and vary so much across the different sources? The publications use different factors (as few as ½ a dozen to as many as 20), some of these metrics are self-reported (post-MBA salaries) and some make adjustments (purchasing power parity) that throw things out of whack. The only way to account for these anomalies is to look at a ranking that averages these out and hence Ingeneam's composite rankings.
In reality, these rankings drive a lot of decisions, on the part of prospective students in terms of where they apply, on the part of recruiters as to what their core schools are, and the administration in crowing about it and asking alumni for generous donations to invest heavily in facilities, faculty, staff, financial assistance to attract the next crop of business leaders and to maintain the ranking. But is there merit to rankings that indicate schools jumping 10 spots one way or the other – have the schools or what they offer changed that dramatically over the course of a year? Barring some extraordinary situation like at Thunderbird, this simply isn’t the case. So what do these rankings mean and how should you use it?
First, let’s take a look at some differences even across the top-20 programs. While the average GPA, GMAT, earnings before and after MBA are all well researched, I’ll focus on an unusual data point – average class size. Top-10 schools average 535 while 11-20 average almost half as many at 290. Why does this matter? Business schools know it is a numbers game. More students gives them more budget to pay for the fixed costs of facilities, faculty and creating intellectual property. More alumni in turn means a bigger endowment and in time the rich will keep getting richer! Will the size of the school make a difference to your learning experience? Probably not! Because, even in the largest schools, the class is broken down into cohorts and this becomes your class / school experience. 2nd, we believe individual spots on the ranking table don’t mean much and the year-to-year moves mean even less, but it is more the cohort that matters. Is your school amongst the elite programs globally, which even your grandma would recognize or is it recognized as a solid tier 1 or 2 program which happens to be a core school for many of the top-tier recruiters (investment banks and consulting firms included)? Finally and most importantly, the choice should depend most on what you believe is a good fit. You might not want to apply to Darden or Booth if an academically grueling program is not something you will enjoy, or to Tuck if you will not enjoy being 125 miles and a world away from a metro area!
If you need help deciding which schools are the best fit for you, please contact us
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