As loyal readers of Education Post have probably noticed, The Economist published its 2014 global ranking of MBA programmes last month. That is always a major event in the relatively small world of business schools and, as in most years, it has also triggered a slew of articles and opinion pieces saying that, in the end, such rankings aren’t that important.
That is a position we cannot agree with and here are the reasons why:
1. Take it all with a pinch of salt
Among many MBA ranking lists, by far the most important are the The Economist’s and the one edited by the Financial Times (FT). Others are not necessarily inaccurate or misleading, but no one can deny that these two currently carry the most weight and prestige.
However, while both publications obviously do their homework, it is impossible not to wonder why their rankings can sometimes differ so markedly, especially regarding schools based in Europe. For example, LBS and INSEAD are much better ranked by the FT (third and fifth respectively) than in The Economist, where this time they come 15th and 18th. In contrast, HEC Paris finds itself 21st in FT list and 4th in The Economist. Anyone tracking the performance of schools in Asia will be even more puzzled. HKUST can take pride in being both 14th and 62nd, while CEIBS is either 17th or 84th. depending on which publication you follow.
These variations can partly be explained by the difference in methodology. The Economist takes only four criteria into account – opening new career opportunities (35 per cent of the total figure), personal development/educational experience (35 per cent), increasing salary (20 per cent) and potential to network (10 per cent. The FT has a more detailed approach, using 20 different criteria with weightings ranging from 20 per cent to 1 per cent of the maximum total.
What every prospective MBA student should know, though, is that the rankings are not determined by reference to hard facts alone. For instance, salaries on completing the various programmes cannot be verified. The data depends solely on information provided by graduates, but is given a considerable weighting by both the FT and The Economist.
The same goes for views on the overall MBA experience – another important aspect of the rankings. Even if students have some misgivings about the programme, discussing these openly may only harm the ranking of their school and thus diminish the value of their MBA.
2. Rankings spur improvement
Competition between schools is an integral part of the MBA world. It is also the DNA of capitalism, with companies competing for clients and employees competing for rewards and status.
This means MBA rankings are still important as a gauge for every participant in that sector from deans and professors to candidates and prospective students. They also have direct relevance for employers. Getting your qualification from a top-ranked school automatically improves the chances of landing a well paid job in most sectors. For instance, it is well known that many consulting firms only hire MBA graduates from the top universities. The same usually goes for the bigger investment banks and now too for tech companies like Apple, Google or Amazon.
3. It is a risk to ignore rankings
Many factors should influence your choice of MBA programme – the country and industry you want to work in, the course content, electives, and alumni network not least among them. But if you decide not to apply to the best schools which meet your general criteria, maybe because your GMAT score is not high enough or because you are have work and family commitments which make it difficult, don’t take that decision lightly.
Students want three things from an MBA: knowledge and the skills to succeed in the corporate world, the experience of meeting and collaborating with talented people, and the enhanced brand image that comes with having a good business degree. Going to a lower ranked school can adversely affect both the second and third objectives.
If you are less concerned about the brand image and the associated experiences, you will still be paying high tuition fees for knowledge alone which, in a sense, can be found in any good textbook. The value of a good MBA is in the all-round learning, debate and new perspectives, not the mere presentation of facts, data and cases.
Therefore, it makes sense to take rankings seriously. They are not perfect, but before investing your money in a programme, understand how it is perceived and why. It comes down to comparing your costs with your expected gains.
Article published in the South China Morning Post on November 5, 2014