MAKING SENSE OF THE ANNUAL
BUSINESS SCHOOL RANKINGS
By Dominic Basulto
Despite a wealth of evidence to suggest that the annual
business school rankings are over-hyped and even inconsistent in their
analysis of qualitative and quantitative factors, the fact remains that
the latest results from say, Business Week or U.S. News & World
Report, indisputably provide a much-needed aura of decisiveness to an
otherwise highly subjective business school application process. These
are results that are attentively noted by applicants, current MBA students,
alumni, deans, faculty and recruiters. For Russian candidates who do
not have ready access to other data or unbiased perspectives, the existence
of these rankings often means that the rationale for selecting B-schools
(even for the most well-informed candidates) inevitably boils down to
the following: How is the school ranked in the latest business school
poll? This system of rankings is a phenomenon that began in the United
States and has now migrated to continental Europe, where the Wall Street
Journal Europe and the Financial Times now rank the leading Euro business
schools. With the much-needed caveat that these rankings are not the
"be all and end all" of estimating the relative value of MBA
programs, these rankings can nonetheless be used as an integral part
of the application process.
POINT #1: SORTING THROUGH THE HYPE OF ADMISSIONS BROCHURES
AND BUSINESS SCHOOL WEBSITES
Anyone who has ordered application packages from the
leading business schools or perused the slick websites of these schools
knows that it is extraordinarily difficult to analyze why a "Top
10" school is in any way superior to a "Top 20" school.
Every piece of marketing material from these schools focuses on the
same "fuzzy" factors, such as internationalism, diversity
and teamwork. Moreover, the marketing campaigns of these top B-schools
are often permeated by well-polished MBA jargon ("synergy,"
"competitive advantage," "value-added") that is
difficult to analyze or even conceptualize. Well, the truth is that
the difference between a top-ranked program such as Stanford or Wharton
and the other hasbeens or wannabes further down the polls is substantial.
In essence, the poll data signal the potentially uninformed consumer
(e.g. applicants and recruiters) about discrepancies between what a
B-school claims to be and what it actually is.
In this sense, the annual business school rankings
can help make sense of the braggadocio (boasting) and self-important
claims that some MBA programs make. After all, these rankings are based
on a combination of qualitative ("recruiter satisfaction")
and quantitative ("average starting salary") factors that
are combined into a legitimate statistical model. While different rankings
produce slightly variegated results, it is no coincidence that B-schools
such as INSEAD, Harvard and Wharton consistently top the rankings. Even
the most suspect rankings combine some easily-verifiable numerical data
into a complex whole that can then be deconstructed.
POINT #2: DEVELOPING AN APPLICATION STRATEGY
The fundamental question that applicants must ask
themselves is: Can I get in? As a rule of thumb, the most competitive
candidates intent on attending business school should prepare a balanced
application strategy that focuses on one or two of the "Top 3"
schools, one or two schools ranked in the "Top 10" and one
school near the bottom of the "Top 25." This is a typical
hedging strategy followed by the best-qualified candidates seeking a
top-rate Ivy League education but willing to accept the fact that an
offer of admission from a highly esteemed, non-elite MBA program is
not the end of the world. In this sense, the annual rankings can help
applicants develop the appropriate strategy to maximize the chances
Of course, this strategy should be adapted to fit
the profile of every candidate. Highly qualified candidates may want
to focus more on the high end of the market, while lesser-qualified
candidates should eschew the long-shot schools. In the vernacular, MBA
programs in the "Top 5" are considered "reach" (or
alternatively, "stretch") schools, while those in the bottom
end of the "Top 25" are termed "safety" schools.
Every candidate should seriously consider including at least one "safety"
school in his/her application strategy. As an aside, it should be noted
that most savvy candidates do not place undue emphasis on the rankings
- rather, they focus on the "percentage of candidates admitted"
statistic. "Reach" schools typically have admissions rates
of under 15% while "safety" schools often admit over 30% of
all applicants. Obviously, then, even the lowest-ranked schools can
afford to be selective - a fact that weaker candidates should bear in
mind during the application process.
POINT #3: ISOLATING THE COMPETITIVE STRENGTHS OF THE RESPECTIVE
More important than the overall composite rankings
are the departmental rankings of business schools. A candidate seeking
a future career in marketing, for instance, would be well advised to
choose a school ranked highly in marketing - even if that school is
not in the "Top 10" in the overall rankings. In this case,
these highly specific rankings (which are usually obscured by the composite
rankings) are more instructive. As mentioned in an earlier Career Forum
article ("Understanding and Selecting the Appropriate Business
School"), business schools view themselves as differentiated brands
that can appeal to a particular cross-section of the MBA world. Only
the largest, best-endowed programs can sustain globally competitive
strengths across all disciplines. Thus, B-schools attempt to define
one or two niches in which they can excel as part of building a core
brand. The rankings, then, can assist candidates in evaluating the relative
strength of different brands.
The key is to peer below the surface and attempt to
grasp what the various factors used in the annual rankings signify.
For instance, a school boasting a large average starting salary for
recent graduates is almost without question highly focused toward the
various cash-rich consulting companies and investment banks that parade
through the career placement offices of the top business schools. For
instance, Columbia Business School will always have one of the highest
average starting salaries due to its proximity to Wall Street. Less
precise factors such as "student satisfaction" can give a
clue whether an MBA program is on the way up or on the way down in the
rankings. Most importantly, one should keep in mind that the rankings
are highly mutable. Like any well-established brand, business schools
that pay inadequate attention to market demand or global trends risk
erosion of their brand and potential slippage in the polls. MBA programs
such as Wharton or INSEAD are only able to maintain their positions
due to constant self-improvement and attention to the end consumers,
students and recruiters.
In summary, the annual business school rankings are
not infallible and should only be regarded as another tool in the evaluation
of MBA programs. That being said, however, these rankings can play an
important role in 1) sorting through the hype of admissions brochures
and business school websites 2) developing an application strategy and
3) isolating the competitive strengths of the respective B-school programs.
The savviest candidates will balance the supposed indisputability of
the polls with the viewpoints of recent alumni, current students, and
perhaps most importantly, the corporate recruiters who will be hiring
the next crop of MBA hopefuls.
Dominic Basulto is a 1998 graduate of Yale School
of Management and currently works as a consultant for Pericles ABLE
(American Business and Legal Education) in Moscow. Pericles offers a
full MBA advising program.