How much do MBA rankings matter?

How much fdo the rankings matter?

When BusinessWeek published its first MBA rankings in 1988, the idea of judging the quality of a school on “customer satisfaction” must have seemed revolutionary. Some academics might even have thought it a heresy. Never before had anyone asked students if they had been given “a way of thinking or approaching problems” that would serve them over the long haul. Or whether their professors conveyed enthusiasm for what they taught. Or what percentage of their classmates they would like to have as friends.

Until then, the assessment of MBA programmes had basically relied on the opinions of deans and faculty members, and used data like median GMAT scores to account for student selection.

Subsequently, though, we have seen a growing obsession with the ranking of business schools, with an increasing number of media outlets around the world devising their own methodologies to rate and compare the various programmes.

Not surprisingly, there is ongoing debate about these rankings. The fundamental question is whether they provide useful information for MBA applicants, or whether they can mislead, creating a “herd instinct” which favours a few schools, but takes too little account of personal goals or the “fit” of a particular programme for different individuals. It is easy to lose sight of marginal differences which exist between two schools ranked, say, 20th and 30th or even those currently standing first and second.

Unless a prospective student really understands the methodologies and weighted algorithms used by different ranking systems, they can quite easily be confused or misled. For example, the Financial Times places particular emphasis on salaries achieved three years after graduation. BusinessWeek’s results are heavily influenced by satisfaction levels expressed by students and recruiters; Forbes focuses on ROI (return on investment); The Economist looks at career development and the international make-up of the school; and US News & World Report places significant weight on the GMAT.

MBA candidates who are unaware of these varying approaches must inevitably wonder how media rankings of basically the same schools can yield such different results.
That said, it may in fact be a healthier situation overall if no single ranking dominates the market. The MBA 50 Premiership - in effect a ranking of rankings – helps to give applicants a better sense of how schools perform across multiple criteria.

Ultimately, the biggest failing of each competing method has been the inability to integrate a prospective student’s own criteria, when choosing an MBA programme, with those put forward by the respective business schools. For instance, if a candidate is thinking of studying a one-year MBA focused on entrepreneurship in Europe or Asia, the mainstream rankings from US sources will not prove very useful.

Therefore, it is especially important for candidates to identify their own list of criteria, looking at things like the “personality” of the institution, teaching style, prestige, location, course length, and costs. Prospective students should also consider return on investment – based on their pre- and post-MBA earnings – specialisation, recruiters, alumni network and “influence” to come up with a more personalised ranking.

It might sound obvious, but school’s location is a key factor. It has an impact on regional strengths and sector expertise, ties to recruiters, and opportunities for exchanges, internships and future jobs. We can see that Chicago Booth, Columbia Business School, and the London Business School have excellent reputations in the field of finance. Begin located right next to major financial markets allows them to attract big-name guest speakers more easily and to help students tap into a strong network for summer internships and post-MBA job offers.

The likes of Stanford GSB and Berkeley-Haas similarly benefit from ties to Silicon Valley, while graduates at France’s HEC Paris can take advantage of the school’s proximity to Europe’s largest business district, La Defense, and links with companies like LVMH and other booming luxury brands.

For those who want to capitalise on opportunities created by Asia’s economic growth, the region has a growing number of world-class business schools to choose from.

Beyond taking the generalist approach expected of an MBA, schools have also carved out reputations for specialisation through their list of electives or add-on courses. They may have particular strengths in finance, marketing, not-for-profit business, real estate, IT management or healthcare. In such cases, the schools work hand in hand with the related industry and have both strength and depth in terms of faculty members developing that area of expertise.

Schools such as Babson College in the United States and EM Lyon in France may not feature in the overall top 10. When it comes to teaching entrepreneurship, though, they have a worldwide reputation for supporting student start-ups and attracting potential investors.

When deciding which criteria matter most to you, remember that no two sets ever look the same. A software engineer wanting to spend two years focusing on finance on the US east coast will have a very different list of target schools from a consultant wanting to learn about general management to expand his or her career in Europe or Asia.

The rankings are still very influential, but make sure to do your own research and come up with more personalised criteria to find the business school with is right for you.

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