American schools are in the ascendancy in The Economist’s ranking of full time MBA programmes
This is the ninth year that The Economist has published a ranking of full-time MBA programmes. Our latest ranking is probably the most turbulent in that short history. Usually, schools move up or down just a few places year on year. This time around, however, swings have been wilder.
The main reason for this is the difficult job market. A school’s ability to open new career opportunities for its graduates and the salaries those graduates can expect to be paid have a combined weight of 55% in our ranking (see methodology). The careers data in this year’s ranking are from 2009, when the situation was bleak for almost everyone. But some schools stole a march on their sluggish counterparts.
If any school can claim to have had a successful recession then it is Chicago’s Booth School of Business, which tops the ranking. Chicago’s careers service was ranked the best of any school. It placed graduates into all 11 different industry sectors that we count, and its students rated it highly. It has no doubt been helped by the fact that, while other schools’ resources have dwindled, in 2008 it received the largest single donation ever made to a business school—$300m from David Booth, an alumnus, after whom it was renamed.
Indeed, the clear winners in this year’s ranking have been North American schools. It is not just that they occupy seven of the top ten places, including the first four slots. It can be found further down our table, where middle-ranking American schools have leapfrogged their European counterparts.
European MBAs are still likely to out-earn the rest when they graduate—they tend to be older with more work experience—but the gap has narrowed. London Business School, which has traditionally placed its graduates in high-paying finance roles, is a good example. As banking jobs disappeared, the average basic salary of new MBAs from LBS has dropped from $117,000 to $100,600 since the 2009 ranking. Likewise the number of students in employment within three months of graduation fell from 91% to 81%. At IMD in Switzerland, meanwhile, salaries also fell slightly. This compares badly with many of the American schools where the drop has not been as dramatic. At some, indeed, salaries were almost unchanged—for example the University of California at Berkeley, whose graduates made $108,400 on average.
Another area where many schools have struggled is in maintaining the quality of the student body. Although in a recession the pool of applicants often increases at first, as people look to shelter from the economic storm in MBA programmes, if a downturn becomes prolonged then students begin to question the wisdom of handing over huge tuition fees for uncertain returns.
The top American programmes have not lost their allure, though. The Economist uses the average score in the GMAT entrance exam as a proxy for students’ intellectual prowess. Chicago reports that its students scored an average of 717 (out of a possible 800), which is up on last year. And even this is still behind the 730 claimed by students at Stanford. In contrast, the two highest-ranked European schools, Spain’s IESE and Switzerland’s IMD, both reported lower GMAT scores this time—683 and 671.
The highest-ranked Asian and Australasian schools have also had a testing year. Again, this has much to do with facing a difficult jobs market. At Melbourne Business School—the region’s top-ranked—graduates’ salaries have also fallen. At Hong Kong University, meanwhile, students found jobs in only five different industry sectors; last year’s score was 11.
While wading through comments left by the 19,000 students and alumni who filled out our questionnaires, we could not fail to notice one area in which many schools could improve: tapping into their alumni network. When the market is tough, alumni are invaluable sources of internships, introductions and ultimately jobs. Many students complained bitterly that schools were not engaging with their graduates.
Some schools do seem to be getting it right, though. Thunderbird, in Arizona, which was ranked highest in the “potential to network” category, is one. Its 30,000 alumni are spread across 146 countries, but are drawn together via a network of international alumni chapters. Its students were enthusiastic about the access this gave them to past graduates. One said that he had often “called or emailed them to ask question about their business or culture”.
When looking at our list of top MBA programmes it is worth bearing in mind that business-school rankings are not perfect. What makes a good programme will vary for each individual. Our ethos is to look at business schools from the student’s perspective. Indeed, over the past 22 years we have asked close to 200,000 of them why they decided to sign up for an MBA. It is their responses that inform the criteria we measure and the weightings we apply. Over that time, four factors have consistently emerged:
■ opening of new career opportunities and/or furthering of current career;
■ personal development and educational experience;
■ increase in salary;
■ potential to network.
The Economist ranks full-time programmes on their ability to provide students with the things that they themselves cite as most important. It weights each element according to the average importance given to it by students surveyed over the past five years. Other rankings have different standpoints. They may give a higher weighting to the research output of faculty, the salaries of graduates or the perception of a school among employers. All are valid, and it is up to each prospective student to understand the various methodologies and decide which are most relevant. Further, The Economist is unique in allowing students to produce individual rankings, based on the issues they believe to be most important.
In any case, rankings should form only part of a student’s selection process. It is equally important to look at issues such as school culture, employment prospects and areas of speciality.
Article on: http://www.economist.com/whichmba/2010/full-time-mba-ranking
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