Is There Value in Business School Rankings?

We’ve written before about how business school rankings don’t give students the full picture, and now with the recent release of the Financial Times (FT) Global MBA Ranking 2017, it seems an appropriate time to revisit this topic.

How Do I Know Which Business School Rankings Are the Best?
The past year has seen new business school rankings crop up in media publications. For example, Poets & Quants has come out with a brand-new ranking of undergraduate business schools. Shortly before announcing P&Q’s new ranking, John Byrne, current P&Q editor and creator of the first business school ranking in 1988, wrote about how business school “deans are rarely fans of rankings,” further stating that deans “have decried the volatility of such lists, the often head-scratching results, and the methodologies used to rank their MBA programs.” In this same article, specifically referring to Bloomberg Businessweek’s MBA Ranking 2016, Byrne also points out the problem with one aspect of methodologies, job placement data: “The job placement can oddly penalize schools where highly confident graduates hold out for their ideal jobs, refusing to accept offers they don’t want.” In creating a new ranking, P&Q apparently aimed to address the flaws they saw in other publications’ rankings. However, this new ranking, among others, adds even more categories for evaluation to an already flooded market of business school rankings, all with different methodologies.

That begs the question: which constituents are business school rankings really serving? Consider that, of the major media publications compiling business school rankings, U.S. News produces 50 different types of college rankings, around 15 of them devoted specifically to business education; FT publishes seven different business school rankings; the Economist puts out nine rankings solely for MBA programs; and P&Q now appears to release three distinct business program rankings. The competition seems to have become more among the media than among business schools—who have little say in the criteria selected for rankings—and therefore more about ratings than supporting student interests. But business schools can’t escape the game, because with the rankings, particularly the higher rankings, comes the promise of publicity and prestige. And in an ever-competitive higher education environment, with more and more stakeholders to serve, the pressures to not only participate in but also place high in rankings is too great to ignore.

How Are Business School Rankings Determined?
Methodologies vary across publications and change frequently from year to year even within one publication; some information is based on quantitative data—tuition, enrollment, graduation, placement, and salary numbers, while other information is more qualitative—survey feedback from recent graduates, established alumni, job recruiters, and business school personnel.

To give an example, just one part of the methodology for the most recently published list—the FT Global MBA Ranking 2017—has multiple levels of complexity, and the other rankings in the game are just as intricate, if not more so. Quantitatively, for the FT Global MBA Ranking 2017, the two largest criteria that go into a school’s overall rank are salary-based (40 percent total), which may not be the best indicators for success because (1) salaries of alumni who work in the nonprofit and public sectors—growing fields of interest for millennials—are removed, and (2) the salary increase is based on alumni salaries prior to earning the MBA and then three years after. Numerous factors can account for variable salaries both before and after graduation. Full-time MBA students might not have a job at all while in the program, so naturally going from zero salary to any salary three years later is a significant increase. And of the alumni participants, FT only requires a 20 percent response rate, and of those, just 20 fully completed responses for a school to be included in the ranking. When you start to examine the numerical aspects of rankings, you begin to see that the quantitative data are brushed with too broad a stroke to truly be meaningful.

How Reliable Is Alumni Reporting and Feedback?
Increasingly, surveys are including more qualitative data in their methodologies, which also can be tricky. While the idea is to give prospective students a more sentiment-based measure of a school, sometimes feelings can be skewed by a particular experience. For example, if a recent graduate is given a survey at a time when he has been unable to find a job, he might have negative feelings toward the school, despite the overall good experience he had throughout the program. The opposite is also true: a student who had extraordinary success after graduation might reflect more positively on her school experience than she actually had during her time spent pursuing the degree. Job recruiters also can have slight, or even unconscious, biases, depending on whether they were able to get many placements from a school. Further, alumni, especially fee-paying alumni members, have a vested interest in seeing their alma mater rank high, and that heightened interest might affect their survey input.

The point is not to say that people are dishonest and therefore their feedback is unreliable; rather, every person's experience with a school is individual and multifaceted, so offering a common scale with which to rate their experience after the fact is not a very effective means to measure sentiment.

So How Do I Evaluate Business School Quality?
While it's hard enough to compare school against school in a given media ranking, it's even harder—if not impossible—to compare ranking against ranking. Even when looking at the same type of program ranking, for example the full-time MBA, each publication that creates a ranking for that program is looking at different measures. So how do you know what information to trust? A different place to look is at a school’s accreditation status. Beyond the institution’s regional, institution-wide accreditation, AACSB Accreditation signifies that a school has met specialized and high-quality business and accounting standards. They have gone through a rigorous multi-year process of demonstrating to unaffiliated peer reviewers that their programs meet the most up-to-date, market-oriented, global criteria for workforce-ready business school graduates. And while many popular rankings largely include AACSB-accredited schools, there are also many more schools to consider—hundreds, in fact—beyond those that make the media lists, and these schools can offer students exceptional quality and unique experiences targeted to their needs.

All of these new and changing rankings that continue to show up can create more disparate and fragmented ways of assessing the so-called quality of business schools. But often the fight to stand out is one among media publications and not actual business schools. After all, if business school rankings didn't exist, business schools would likely present you with the information that is most relevant to and unique about their school, and how those features can best meet your needs; they would not cater to a set of criteria that has been considered the standard of information based on the rankings industry. To assume that all prospective students are looking for the same information about a school is to undermine their individual ambitions and disregard the uniqueness that they, too, can bring to a school.

AACSB International is providing this information in order to help prospective students understand the nuances among different rankings and how they are calculated. AACSB does not support or endorse any specific ranking methodology and encourages students to consider AACSB Accreditation as part of their search criteria when evaluating business school programs for fit, quality of education, and career success.