Every single business school in the world, that is on the top schools’ list, has a section on their website solely dedicated to the various ranks they have been given by publications every year. Every single MBA student has, at least once during their MBA journey, checked a leading publication for business school rankings.
That’s the kind of power a simple list of business schools yields in the world of MBA.
A great man once said, “With great power comes great responsibility”. Not every list that is put out on the internet has credibility. When selecting a business school, you simply cannot risk reading a list that might contain a sponsored school or a school the list makers collaborated with.
To avoid this problem, use sources that are transparent about their ranking methodologies and have detailed facts and figures present to support the placement of each school. the most reliable sources for business school rankings currently are:
- Financial Times
- US News
- The Economist
- Bloomberg Businessweek
But rankings are much more complicated than they seem. Simply running after the dream of getting into the business school ranked #1 in either of these publications would also be idiotic. Although these rankings do provide a good base to help one search for their perfect fit with a business school.
Before addressing that head-on, there are some basics that one needs to know about business school rankings.
The psychology of business school rankings: Why people follow them
Humans love rankings! We only want the best of everything. Google’s algorithm proves my point. Try a few google searches for random things like actors, or salad, at least one article on the landing page (the first page of search results) will be a ranking of some sort.
The same goes for business schools. Rankings, with all of their flaws, are an integral part of an applicant’s search. The circle of MBA consists of applicants, business schools, and recruiters.
Recruiters would, more often than not, go for an applicant from a #1 business school rather than an applicant from #25 business school. It’s simply because the rank disparity creates a sense of lack of skill in an applicant from a much lower-ranked school. Which might not be true.
Since recruiters would prefer a top school, applicants do the same to reap better opportunities and ROI post-MBA.
This forces business schools to maintain their ranking or improve it, to have a positive effect on the applicant pools’ quality and quantity. A higher rank also brings goodwill associated with the business school’s brand name. This in-turn makes fundraising for the school much easier. Which ensures a better infrastructure, and faculty.
This feeds the ranking system again and brings it full circle with the recruiters favouring schools with higher ranks.
Top 100 Business Schools in the world
|Rank ||Business School ||Location|
|1. ||Harvard Business School ||Boston, Massachusetts, US|
|2. ||University of Pennsylvania: Wharton ||Vance Hall, Philadelphia, US|
|3. ||Stanford Graduate School of Business ||Stanford, California, US|
|4. ||Insead|| France, Europe|
|5. ||Ceibs|| Pudong, Shanghai, China|
|6. ||MIT: Sloan|| Cambridge, US|
|7. ||London Business School|| London, US|
|8. ||Columbia Business School|| New York, USA|
|9. ||HEC Paris|| France, Europe|
|10. || University of Chicago: Booth|| Chicago, US|
|11. || Northwestern University: Kellogg|| Evanston, US|
|12. || University of California at Berkeley: Haas|| Berkeley, US|
|13. || Iese Business School|| Barcelona, Spain|
|14. || Yale School of Management|| New Haven, US|
|15. || National University of Singapore Business School|| Singapore, Southeast Asia|
|16. || Dartmouth College: Tuck ||Hanover, US|
|17. || Duke University: Fuqua|| Durham, US|
|18. || University of Virginia: Darden|| Charlottesville, US|
|19. || University of Cambridge: Judge || Cambridge, UK|
|20. || HKUST Business School|| Hong, Kong|
|21. || University of Oxford: Saïd|| Oxford, UK|
|22. || New York University: Stern|| New York, US|
|23. || Cornell University: Johnson|| Ithaca, New York, US|
|24. || Esade Business School|| Barcelona, Spain|
|25. || IMD Business School|| Lausanne, Switzerland|
|26. || UCLA: Anderson|| Los Angeles, California, US|
|27. || Indian Institute of Management Bangalore ||Bangalore, India|
|28. || Indian School of Business ||Hyderabad, Telangana, India|
|29. || SDA Bocconi School of Management|| Milano MI, Italy|
|30. || University of Michigan: Ross|| Ann Arbor, US|
|31. || Georgetown University: McDonough|| Washington, DC 20057, US|
|32. || Carnegie Mellon: Tepper|| Pittsburgh, US|
|33. || Fudan University School of Management|| Yangpu District, Shanghai, China|
|34. || University of Florida: Warrington|| Gainesville, US|
|35. || Nanyang Business School, NTU Singapore|| Singapore, Southeast Asia|
|36. || University of Southern California: Marshall|| Los Angeles, US|
|37. || Shanghai Jiao Tong University: Antai|| Shanghai, China|
|38. || Renmin University of China Business School (RMBS) ||China|
|39. || University of North Carolina: Kenan-Flagler ||Chapel Hill, North Carolina, US|
|40. || The University of Texas at Austin: McCombs|| Austin, Texas, US|
|41. || Indiana University: Kelley|| Bloomington, US|
|42. || Indian Institute of Management Calcutta ||West Bengal, India|
|43. || Warwick Business School|| United Kingdom|
|44. || Washington University: Olin ||St. Louis, US|
|45. || Alliance Manchester Business School|| Manchester, UK|
|46. || Vanderbilt University: Owen ||Nashville, US|
|47. || Shanghai University of Finance and Economics: College of Business|| Shanghai, China|
|48. || Emory University: Goizueta ||Atlanta, US|
|49. || University of Washington: Foster ||Seattle, US|
|50. || CUHK Business School ||Hong Kong|
|51. || City, University of London: Cass ||London, UK|
|52. || IE Business School|| Madrid, Spain|
|53. || Georgia Institute of Technology: Scheller|| Atlanta, Georgia|
|54. || Sungkyunkwan University GSB|| South Korea|
|55. || Imperial College Business School|| London, UK|
|56. || The University of Hong Kong|| Hong Kong|
|57. || Rice University: Jones|| Houston, Texas, US|
|58. || University of Notre Dame: Mendoza ||Notre Dame, US|
|59. || Pennsylvania State University: Smeal|| Pennsylvania, US|
|60. || Babson College: Olin|| Wellesley, Massachusetts, US|
|61. || Indian Institute of Management Ahmedabad|| Ahmedabad, Gujrat, India|
|62. || Durham University Business School|| Durham, UK|
|63. || Singapore Management University: Lee Kong Chian|| Singapore, Southeast Asia|
|64. || WHU – Otto Beisheim School of Management|| Vallender, Germany|
|65. || The University of California at Irvine: Merage|| Irvine, California, US|
|66. || Rotterdam School of Management, Erasmus University|| Rotterdam, Netherlands|
|67. || Boston University: Questrom|| Boston, US|
|68. || University of St Gallen|| St. Gallen, Switzerland|
|69. || Northeastern University: D'Amore-McKim|| Boston, Massachusetts, US|
|70. || George Washington University|| Washington, D.C., US|
|71. || Mannheim Business School|| Mannheim, Germany|
|72. || Ohio State University: Fisher|| Columbus, Ohio, US|
|73. || University of Maryland: Smith|| Maryland, US|
|74. || University of Pittsburgh: Katz|| Pittsburgh, Pennsylvania, US|
|75. || SMU: Cox|| Dallas, Texas, US|
|76. || University of Rochester: Simon|| Rochester, New York, US|
|77. || University of Connecticut School of Business|| Mansfield, Connecticut, US|
|78. || University of Minnesota: Carlson|| Minneapolis, Minnesota, US|
|79. || EMLyon Business School|| Ecully, France|
|80. || Melbourne Business School|| Melbourne, Australia|
|81. || ESMT Berlin|| Berlin, Germany|
|82. || The University of Texas at Dallas: Jindal|| Richardson, Texas, US|
|83. || Brigham Young University: Marriott|| Provo, Utah, US|
|84. || The Lisbon MBA Católica | Nova |
|85. || Purdue University: Krannert|| Lafayette, Indiana, US|
|86. || Texas A & M University: Mays ||Texas, US|
|87. || Western University: Ivey ||Canada|
|88. || Edhec Business School|| France|
|89. || AGSM at UNSW Business School|| Kensington, Australia|
|90. || Essec Business School|| Cergy, France|
|91. || McGill University: Desautels|| Montreal, Canada|
|92. || Wisconsin School of Business|| Madison, Wisconsin, US|
|93. || Miami Herbert Business School|| Florida, US|
|94. || University of Toronto: Rotman|| Toronto, Canada|
|95. || University of Edinburgh Business School|| Edinburgh, Scotland, UK|
|96. || University of California at San Diego: Rady|| San Diego, California, US|
|97. || Macquarie Business School|| Sydney, Australia|
|98. || City University of Hong Kong|| Hong Kong|
|99. || University College Dublin: Smurfit|| Dublin, Ireland|
|100.|| University of Georgia: Terry|| Athens, Georgia, US|
What makes the Top 10 Business Schools different?
Business schools across the board have faced a “slowdown” in the past couple of years. As tier 3 or 4 business schools face challenges due to the slowdown, the top 10 Business Schools stay unfazed.
Have you ever stopped to think why a business school in the top 10 business school list is different from the ones in the top 20 or the top 30? How is it that a “slowdown” affects the tier 3 or 4 schools and hardly makes a dent in the acceptance rates at top tier schools?
The answer is more than just the brand that the top 10 business schools have created for themselves.
Yes, the top 10 business schools receive a better recruiter group than the remaining business schools. Just like top recruiters get to choose the cream of the class at a top school, a top school also gets to choose the cream of all recruiting organizations. But that isn’t the only way that recruitments make the top 10 business schools special.
Career Impact staff at top US business schools have been noted to maintain close relations with top recruiters. The activeness of the CI staff doesn’t end here. They are known to pay close attention to each student by prepping them for recruitment and helping them network with the alumni since the very first day of school.
Firms like Goldman Sachs, JP Morgan Chase, and Morgan Stanley are some of the top MBA recruiters with the highest paying jobs. These firms, tend to teeter between the top 10 schools every year, leaving only a few slots for the top 20 or top 30 business schools.
Recruitments are also easier for international students at a top business school. Finding organizations that sponsor a work vise like the H1B Visa for the United States, becomes much easier due to the volume of recruiters and the active Career Impact cells.
I feel just reading the list of things that set a top 10 school apart from the rest of the business schools would make one guess what the explanation could be.
Without a doubt, the top 10 business schools enjoy the best faculty for business education. The faculty at such schools is generally a mix of academics and top-level executives from various fields who either take guest lectures or hold seminars.
These are schools that pioneer teaching methodologies, and projects such as MIT Sloan’s Action Learning Labs. These methods then trickle down to other business schools.
Other than the faculty, the diversity of the MBA class is also an additional resource. Since the top schools enjoy their pick of the applicants, creating a diverse (culture, race, religion, lifestyles, social experiences, etc.). Dealing with a diverse set of individuals in their MBA education stimulates students to be innovative in their solutions while keeping “diversity in ideologies” as a factor.
Another resource whose quality declines as business school ranks get higher is networking. Since top schools ensure the maintenance of a strong alumni network and have alumni placed in high-level jobs at corporate giants, the quality of networks that students get to make is much higher than a tier 3 school.
Scholarships and fundraising
Since the Top 10 business schools have created a brand for themselves, fundraising for scholarships is much easier. Most top schools, though do not provide full-ride scholarships, provides scholarships to about 50% of their students.
At schools like Harvard, about 90% of the students get some form of scholarship. With tuitions for top business schools going over $200,000, these schools do not rely on the applicant to pay, in full, for their education.
The sense of community and school spirit these schools instill in their students, many alumni also donate to the schools often. Just a few years ago, Ratan Tata donated $50 million to his alma mater Harvard, a top 10 US Business School.
Top 10 Business Schools Vs Top 20 Business Schools Vs Top 30 Business Schools
To make the comparison of the Top 10 Business Schools Vs Top 20 Business Schools Vs Top 30 Business Schools easier, we have selected one middle-ranked school from each section.
From the Top 10 Business Schools, we have MIT Sloan. For the Top 20 Business Schools, Dartmouth’s Tuck is the middle school. And UCLA’s Anderson will be used as the comparison school for the Top 30 Business Schools.
Here are the main differences between the top 10, top 20, and the top 30, business schools.
|Criteria ||Top 10 Business Schools (MIT Sloan) ||Top 20 Business Schools (Tuck) ||Top 30 Business Schools (UCLA Anderson)|
|Rank ||#6 ||#16 ||#25|
|Acceptance Rate|| 11.6%|| 20%|| 12.7%|
|Tuition|| $85,807|| $75,108|| $65,114|
|Average GMAT score|| 727|| 723|| 719|
|Average GPA|| 3.6|| 3.5|| 3.5|
|Median Compensation|| $170,000|| $170,000|| $150,000|
|International students|| 42%|| 38%|| 33%|
|Job offers 3 months post-graduation|| 95.7%|| 90%|| 90%|
Top 10 European Business Schools
|Rank|| Business School ||Average Salary ||Average GMAT Score|
|1. ||INSEAD|| $179,661|| 711|
|2. ||London Business School|| $169,675|| 701|
|3. ||Cambridge|| $163,508|| 691|
|4. ||HEC Paris|| $142,622|| 690|
|5. ||IESE Business School|| $148,480|| 681|
|6. ||Saïd|| $151,944|| 690|
|7. ||IMD|| $161,443|| 680|
|8. ||IE Business School|| $153,547|| 670|
|9. ||Mannheim|| $96,000|| 675|
|10. || SDA Bocconi|| $130,628|| 665|
Top 10 Business Schools in Asia-Pacific
|Rank|| Business School ||Average Salary ||Average GMAT Score|
|1. ||INSEAD (Singapore)|| $179,661|| 709|
|2. ||CEIBS|| $174,115|| 682|
|3. ||National University of Singapore Business School Singapore|| $153,216|| Couldn’t find|
|4. ||HKUST Business School|| $156,202|| (median) 660|
|5. ||Indian Institute of Management: Bangalore|| $31,910|| 699|
|6. ||Indian School of Business|| $35,051|| 709|
|7. ||Fudan University School of management|| $110,062|| 650|
|8. ||University of Hong Kong|| $131,386|| 650|
|9. ||Renmin University of China Business School|| $100,003|| (range) 400-700|
|10. || Indian Institute of Management: Calcutta|| $27,339|| 706|
Ranking methodologies for Business Schools
Everything up to this point in this blog was basic information. Noob stuff!
If you’ve spent even a day wondering about MBA or business schools, you had a rough idea about business school rankings.
Now comes the time to dive deeper into them. To optimize the use of business school rankings for ourselves, understanding the methodologies behind them becomes inevitable.
The “Why”, behind the rank that each school received is crucial to the result we’re trying to create. To keep the essence of this blog, let’s look at the methodologies for the sources that we believe to be the most reliable in regards to business school rankings.
1. Financial Times
The Global MBA ranking by Financial Times is the one that is used as the staple “Business School Ranking” across the globe. While they do curate a list of the best business schools in Europe, best EMBA programs, and the likes, they do not have a designated business school ranking list.
The participating schools for Financial Times’ rankings have to meet the basic criterion of being accredited by either Equis or AACSB. The publication requires a minimum 20% of a school’s alumni to respond to their survey, with at least 20 full responses, for the school to enter the ranking calculations. Those who graduated the school three years ago are the target of this survey.
The data from the three years preceding the year of the ranking carry weightage; 50% for the previous year, and 25% each for the two years before that. The weightage given to the salary figures, however, is 50:50 for only the past two years.
Another factor, “value for money”, is then calculated by dividing the average alumni salary after three years of graduation by the total cost (including tuition, opportunity cost, lost salary, and other expenses). To get a normalized average salary, the highest and the lowest salaries three years post-graduation are removed.
The diversity of staff, board members, and the MBA class are also taken into account. Schools with a 50:50 gender composition score higher. The schools are also given research rank based on the number of full-time faculty published articles in 50 internationally recognized academic journals.
FT uses a relative ranking method to curate the Global MBA ranking list. Schools are given a Z-score for each criterion. The Z-score is the relative position of a school in relation to the mean in that criterion. The scores are then weighted and added for the final score.
The school that ended up in the bottom gets removed and the calculation repeats itself from the Z-score step till the top 100 schools are reached.
The Forbes list does not include schools for which less than 15% of the alumni answered the Survey, or the alumni responded with a negative ROI after five years. The sole factor driving the Forbes list is the “five-year-MBA-gain” for all the schools that were considered. It is the net cumulative amount that the alumni of a business school have earned post-graduation from the MBA program, in comparison to what they would have earned had they stayed in their pre-MBA jobs.
The net cumulative requires two things, the opportunity cost that the alumni faced, and the earnings in the five years post MBA. Two years of relinquished income, tuition of the MBA program, and other expenses incurred during the program make u the opportunity cost. While, the earning post-MBA is calculated by adding up the salary, bonuses, and exercised stock options.
3. The Economist
The Economists’ Full-time MBA rankings focus on four main criteria with sub-divisions as follows.
- Open new career opportunities (35%)
- Diversity of recruiters (33.33%)
- Placement success (33.33%)
- Student assessment of careers service (33.33%)
- Personal development/educational experiences (35%)
- Ratio of faculty to students (8.33%)
- Percentage of full-time faculty with a Ph.D. (8.33%)
- Faculty rating by students (8.33%), Average GMAT scores (10%)
- The average number of years of work experience (7.5%)
- The average salary of students before entering class (7.5%)
- The spread of regions from which students hailed (8.33%)
- Gender diversity (8.33%), Student rating of culture and classmates (8.33%)
- Student rating of program and range of electives (6.25%)
- Range of and access to overseas study programs (6.25%)
- Number of language courses available (6.25%)
- Students’ assessment of facilities and other services (6.25%)
- Increase in salary (20%)
- Post-MBA salary (excluding bonuses) (75%)
- Salary change from pre-MBA to post-MBA (excluding bonuses) (25%)
- Potential to network (10%)
- Ratio of MBA alumni to current full-time MBA students (33.33%)
- Number of overseas MBA-specific alumni chapters (33.33%)
- Student rating of alumni network (33.33%)
Leading Critique on Business School rankings
Spencer Johnson said, “If you do not change, you can become extinct”. This can apply to everything in this world. Even Business School rankings. Since their conception, business school rankings have focused on compensation, tuition, and ROI as leading factors in determining business school ranks.
With the change of scene in the professional world, i.e. social skills, ethical responsibility, and emotional intelligence coming more front and center, compensation isn’t the only thing that can entice students. Let me pose another question for you. One that makes this point clearer.
If the business schools, that these rankings judge, are changing, should the criteria used to judge them also change?
Rankings have been done a certain way at each publication, for a long time. While publications may change a couple criteria over-time, the basic ideology and focus behind the rankings remain the same.
The biggest issue is the absence of major unquantifiable factors like Faculty, or Student experience from major business school rankings. while Financial Times does factor in student experience by giving a whopping 59% weightage to the feedback from alumni, there isn’t a direct criterion that deals with the subject.
The credibility of Business School Rankings: Discrepancies
In the middle of 2018 Poets & Quants made a scandalous revelation. Their report revealed that Temple University’s Fox School of Business had been reporting fraudulent data to US News for four years prior to this report.
While some smaller publications could be bought by a few business schools for a better rank, bigger publications would never do so for the fear of losing their credibility. But some business schools have clearly found a way around that too.
With the threat of business schools misinforming the rank curators at seemingly reliable sources, in this case US News, one has to question the overall integrity of business school rankings. the more terrifying fact is that Fox wasn’t the first business school to have pulled such a stunt. In 2013, US News discovered that the Freeman School of Business’ data had been inflated for the preceding 5 years.
With an organization like US News, with the resources it has to verify each data point it obtains form the schools, missing to catch these discrepancies a reader can only wonder how many schools have followed the path that Freeman and Fox did without getting caught.
The question isn’t whether the publication issuing the rankings has any obligation to cross-check the data or the business schools have any accountability to provide true figures and facts. They both do.
The question is whether the methodology to curate rankings has become redundant by allowing the business schools such power over the outcome.
A simple solution to this issue has been found in the Financial Times’ ranking methodology which takes into account alumni feedback. That could ensure, to some extent, the credibility of data. However, arguments have been made that alumni have a vested interest in boosting their alma mater to benefit from the brand goodwill thus created.
The Financial Times also gets the data for 25 schools completely audited by KPMG every year. Taking such a step somewhat verifies the quality of the ranking for the reader.
Even though such a scandal shakes up the trust applicants have on rankings (especially by US News). The publication remains a favourite due to the transparency it shows while disclosing the figures and facts it receives form all the schools ranked.
Optimizing business school rankings
Start by knowing that a rank 11 college is as good as a rank 10 college even though it’s not in the Top 10 business schools. In simple terms don’t look at individual numbers. I prefer looking at the ranks in clusters of 5. If you wished to know what group of schools share similar compensation, and faculty to your target business school select two schools before it and two schools after it. For example, if your target school is ranked 16, schools from the rank 14-18 will have similar attributes to your target school.
What works for me might not work for you. Thus, having a more detailed way to optimize a business school ranking is necessary.
1. Know the limitations of the ranking
One very important thing to keep in mind while using a ranking is the limitation it poses. Forbes’ list only takes compensation into account while awarding ranks to business schools. If your inclination is towards a non-profit organization or entrepreneurship, the Forbes’ ranking would be of no value to you.
2. Research a cluster of schools
The cluster of 5 schools that I detailed above can be a great help during school selection. Since rankings generally rely on quantifiable data, things like school value, student culture, school location need to be researched separately. These are leading factors in a student’s success or failure at business school.
If you aren’t a good fit with the student culture or the school values, the chances of the admissions committee rejecting your application would be much higher. Researching the cluster of five will help you find a school that provides the statistical benefits that you were looking for along with the aforementioned unquantifiable factors.
3. Choose a reliable source
The variety of business school rankings available only make the applicants’ work harder. Do not rely on any ranking available to you. Choose some reliable sources as mentioned at the beginning of this blog.
Going to publications like US News, Bloomberg, Forbes, etc. is smarter as their rankings are much more transparent than most others.
MBA Programs to look out for in 2020
Since there’s already a plethora of MBA rankings of top business schools available, listing them all in this blog seemed fruitless. Instead, it seems like a better idea to list a few business schools that are getting the press for all the good reasons. These are schools that are adding great value to the MBA community.
London Business School
In 2018 London Business School’s student body organized its first mental health week. The week-long sessions of Yoga and Meditation have now become a tradition with the school moving into the third year of promoting mental health amongst MBA students.
The China Europe International Business School isn’t just rising fast in the business school rankings. Graduate compensation at CEIBS also saw a whopping 147% increase between the years 2015-2019.
Indian School of Business
Founded in 2001, ISB has quickly secured its spot amongst the top 30 business school in the world in Financial Times’ MBA rankings. For a school hardly two decades old, ISB boasts of a pleasantly surprising 98% employment rate for MBA graduates.
Nanyang Business School
Talking of young schools, Nanyang Business School Singapore is also fast becoming an MBA program to reckon with. Founded merely three decades ago, the school has quickly placed itself on the #35 spot on Financial Times’ business school rankings.
Saïd (Oxford University)
Another young school that has managed to mark a permanent spot in the top 25 business schools in the world for three years now is Oxford University’s Saïd. The school has jumped back and forth between the top 15 and the top 25 schools in the past three years and has become a bit of a wild card in the ranking lists.