A business school’s ranking can impact its reputation as well as its enrollment numbers. For this reason, many programs now jockey for the top few spots. As an aspiring MBA student, you may want to ask:
How much should the rankings sway where you get your MBA?
How much will the rankings impact the value of your diploma?
Who decides which MBA programs make the cut?
Will a high (or low) ranking impact your return on investment?
The Limits of Empirical Analysis in Evaluating MBA Programs
Because the rankings anoint schools as winners, losers, and everything in between, it’s important to critique their methodologies. Any contest deserves an examination of its rules.
But when it comes to the field of business, it’s especially important to investigate whether rankings accurately represent the MBA programs in question. Business school environments have idiosyncratic and nuanced features that make generalizations difficult. This means that it is impossible to perfectly assess MBA programs with singular rankings and empirical analysis.
Difficulties Inherent in Creating Reliable MBA Rankings
There are many challenges when it comes to accurately ranking MBA programs, and many reasons to look outside of rankings in order to make your business school decision. Here are just a few:
Many programs now offer niche concentrations such as hospitality, media and entertainment, and museum management. These diverse specializations will not be properly reviewed by one ranking system.
Rankings do not accurately capture the particular needs and expectations of business school students. Many students are well into their adult lives and careers when they head off to business school, maybe even with a family in tow. Their happiness in a program will depend on such features as work-life-balance, housing, and scheduling.
MBA hopefuls value unique aspects about the schools to which they apply. Not all of those aspects can be captured in a ranking system.
There is no real discernible difference in quality between a number 1 and number 2 school, or between a number 4 and a number 5. The pros and cons of each school are far too nuanced to measure in this way.
Many students now graduate into one-of-a-kind entrepreneurial jobs. US News and World Report does not consider these types of careers when they create their employment statistics, so a school may lose points even if its alumni are working in cutting-edge industries.
A top-ranked MBA program will not always provide the highest ROI. Prestige may not translate into immediate or long-term wealth. That’s because the most elite, highly ranked schools charge far much more in tuition than their lower ranked peers, so students graduate with large debts. While these graduates may get paid slightly more than their peers, that benefit is removed by the tuition they must pay back. By comparison, mid-ranked MBA programs charge less and graduates still benefit from robust starting salaries.
Local powerhouse schools like McCombs School of Business at UT Austin may be ranked lower than Wharton or Harvard, but may be preferred regionally.
Your concentration or area of expertise may make you more in-demand than the name of the school you attended. Data analytics, for example, is a highly sought-after specialization.
The rankings don’t consider soft features such as school culture or even campus or housing features. Depending on what you’re looking for, these elements of business school can make or break your experience. At Stanford, Harvard, and Dartmouth, all MBAs are housed together on their own campus. This creates an intimate living experience. At city schools like Columbia and Wharton, students live in private housing in a variety of off-campus city locations.
The Ranking Gatekeepers
Understanding the methodology used in the MBA rankings will help you determine if the rankings should play a direct role in your school choice. You should assess whether the ranking process accurately captures the school, the field, and, most importantly, your particular interests.
In conducting their survey of MBA programs, US News and World Report polls peer reviewers — MBA administrators and business school deans — for their opinions on business programs other than their own. These opinions then make up the "soft" quality assessment that goes into the rankings.
The rankings also draw largely upon numbers: namely GMAT scores, GPA of admits, program acceptance rates, and starting salaries and bonuses of recent graduates.
Finally, employers and recruiters provide feedback on the quality of students coming from each program, and this feedback is taken into consideration as well.
All of this combines into an empirical formula that yields tiered business school rankings.
Statistical Differences Between Schools in the MBA Rankings
It’s well-known that Olympians sometimes win by the slimmest of margins. One microsecond can make all the difference. But what happens when schools are subjected to slim statistical differences as well? Ranking methodologies force hierarchies based on statistical differences, but those differences may not actually convey much.
So how should you use the rankings when making your school choice? Just know that the differences between many MBA programs is statistically marginal. In other words, the rankings only tell you so much.
Year-to-Year Changes in MBA Rankings
In the rankings world, schools move up and down the ladder quickly and sometimes randomly. This means that a school’s hold on a given spot is vulnerable from year-to-year. The rankings may be fickle, but the MBA programs are not. Quality schools are quality schools. Quality is consistent and does not experience wild fluctuation from year-to-year.
The Number "1" School Should be the “1” School that Best Meets Your Career Goals
The MBA rankings do serve some purpose; it’s worthwhile to use them as a benchmark, or as an opportunity to discover new programs. But the most thoughtful approach to choosing a school is to research and assess MBA programs for their own strengths.
Take the rankings for what they are, and remember what really matters:
Location – How will a school’s location affect the nature of your experience and your access to professional opportunities? Are you willing to relocate or deal with a difficult commute in order to attend classes?
Reputation – Is a school’s MBA program well-known by local employers and agencies? Is it well-regarded on a national scale? Are the faculty members leaders in their field or in their areas of research? Are they well-connected and willing to connect you with their colleagues?
Relevance and Innovation - What’s trending at this school that’s new, exciting and relevant? Is there a stand-out department in which you can concentrate your study?
Academic offerings, specialties, certificates – Does this school have an expertise in specific areas or industries that are aligned with your interests? Are there professional certifications available to further position you as an expert and make you more marketable?
Flexibility – What program options are available at this school that may help you succeed? Do they offer advanced, accelerated, part-time, and/or online MBAs? Does this program offer you the flexibility you need to maintain your current lifestyle?
Support* - What kind of academic guidance and support is available at this school? What kind of support will be provided upon graduation to help you secure a job?
Alumni Network - How large is the school’s alumni network? How much do they engage with current students? Are they successful? Do they dominate one area or industry?
Cost – How expensive is this school in comparison to others? How will you pay? Will there be a good return on investment?
School Clubs and Activities – What social and professional opportunities exist for making friends, meeting future business partners, and engaging in leadership activities? Does the school host luminaries and dignitaries from the business world? If you will be attending school with a family, will there be social organizations available for your partner and/or children?
To Sum it Up
Rankings may be big news, but they tell a very small story. Today’s great MBA programs are too innovative and exciting to be limited by a few disjointed metrics. If business school is in your future, your investment of time and money deserves a closer look.
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