Thursday, March 22, 2018

6 Biggest Surprises In The New MBA Ranking From U.S. News

U.S. News & World Report released its new 2019 ranking of the best full-time MBA programs in the U.S. and there are plenty of surprises in the results.

This year there were a number of eye-opening changes, from Chicago Booth's first-place tie with Harvard Business School to Yale School of Management's tumble out of the top ten. From our analysis of the new ranking we extracted the six biggest surprises. Here they are:

1. Chicago’s Surprise First-Place Finish

The University of Chicago’s Booth School of Business is no stranger to ranking wins — at least not since Edward “Ted” Snyder was dean of the school from 2001 to 2010. Snyder set the school on a solid trajectory with great forward momentum after his departure. From 2006 to 2012, the school’s MBA program was ranked first on consecutive Businessweek lists. It has also placed first in seven of The Economist MBA rankings, including for five straight years from 2012 to 2016.

But this is the first time Booth climbed to the top of a U.S. News MBA ranking. It did so, moreover, on the back of the University of Pennsylvania’s Wharton School, which had claimed a first-place tie last year with Harvard Business School. This year Booth replaced Wharton to share the No. 1 title with Harvard, while Wharton fell into third place, exactly where Booth was a year ago.

There are plenty of reasons for Booth’s success. Flush with money, the school has been able to attract some of the world’s best MBA students with significant scholarship gifts and recruit and retain some of the best faculty anywhere. Eight business school profs at Chicago have won Nobels: George Stigler in 1982, Merton Miller in 1990, Ronald Coase in 1991, Gary Becker in 1992, Robert Fogel in 1993, Myron Scholes in 1997, Eugene Fama in 2013, and Richard Thaler last year. Among the world’s business schools, no other institution can claim more faculty who have won the prestigious honor.

2. Michigan’s Ross School Cracks Top Ten In Seventh Place

The other big news in this year’s U.S. News ranking is the emergence of Michigan’s Ross School of Business. Ross not only cracked the Top Ten for the first time in 14 years — it finished seventh overall, jumping four places from its rank of 11th last year. To do that, the school had to jump over Columbia Business School, Dartmouth College’s Tuck School of Business, and Yale’s School of Management. No small feat. It is the highest rank achieved by Michigan in the U.S. News ranking since 1999.

The news is a big win for Scott DeRue, a highly popular Ross professor who became dean in July of 2016. When DeRue succeeded Alison Davis-Blake, the school was ranked 12th by U.S. News. Last year, Ross gained one spot to place 11th. While U.S. News did not disclose the actual ranks in its “sneak peek,” this year’s list would represent the second improvement in rankings for the school under DeRue. As recently as 2013, the school ranked 14th under Dean Davis-Blake.

Ross knocked Yale University’s School of Management out of the top 10 largely on the basis of its pay and placement numbers, which account for 35% of the overall ranking. The average salary and bonus for a Ross MBA graduate last year was $150,052, more than $12,000 over the $137,155 average at SOM which fell two places this year to rank 11th. Yalie pay is the lowest average salary and bonus of the top U.S. News-ranked 18 schools, even below UT-Austin’s $139,406.

3. Yale’s School Of Management Tumbles Out Of The Top Ten

Ross’ gain this year was Yale’s loss. The school tumbled out of U.S. News’ Top Ten for the first time in three years to finish in an 11th place tie with Duke University’s Fuqua School of Business. Sure, Dean Edward “Ted” Snyder was on a sabbatical this past year, but the real reason why the school fell has to do with the fact that it places the highest percentage of MBAs from any class into the non-profit sector.

Yale’s numbers were dragged down by the 5.2% of its graduating class that took jobs in the non-profit sector where the median base salary was only $67,500, nearly half the SOM class median of $124,900, and where few if any graduates received bonus money. At Ross, so few MBAs go into non-profit jobs that the employment report doesn’t even list the category. So depending on your point of view, those graduates add valuable perspective and diversity to SOM’s class or they hurt the school in rankings.

Still, the school’s drop is unexpected. SOM welcomed the most qualified class of MBA students to its campus last fall. The class  boasts a 727 GMAT average – a record for the school and a number that eclipses peer programs like Berkeley Haas, MIT Sloan, and Columbia. At the same time, the class’ 730 median average ties it with Harvard’s incoming class. Along with a two point rise in average GMATs, Yale also experienced a bump in GPAs averages, going from 3.63 to 3.67. Nearly a fifth of the 2019 Class hold graduate degrees, with another 13% pursuing dual graduate degrees. So don’t count SOM out. It could very well be back in the top ten next year.

4. How Can Stanford’s Graduate School Of Business Be Behind Both Booth And Wharton?

With an acceptance rate of 5.9%, with the highest average GMAT scores for an incoming class along with the highest undergraduate GPAs, Stanford would seem to have a big advantage in U.S. News‘ ranking. Yet once again the school managed no better than a fourth-place finish, behind arch-rival HBS but also Booth and Wharton. While that outcome is somewhat puzzling, the reason for it lies in the school’s lackluster job placement numbers.

Only 63.9% of Stanford’s MBAs had jobs at graduation last year, the lowest level of employment for any top-30 business school. Three months after commencement, fewer than 90% of Stanford MBAs were employed at 87.6%, lower than any other top 25 school. U.S. News interprets those stats in the most negative sense, assuming that Stanford grads are having trouble finding jobs with their MBA degrees.

In truth, the degree is so valuable and the school’s graduates are so self-confident that they routinely search for the perfect post-MBA job. For many Stanford grads that means an independent search for a job with an early stage company or startup that doesn’t recruit many MBAs. Those searches don’t fall neatly into a recruitment calendar to satisfy U.S. News’ job metrics. The result? Those low placement scores pretty much cancel out the highest average GMAT for any prestige MBA program (737), the highest undergraduate GPA (3.74) and the lowest acceptance rate.

5. Southern California’s Marshall School Makes The Top 20

Only two years ago, the full-time MBA program at USC’s Marshall School of Business was ranked 31st by U.S. News. Last year it climbed to 24th, and this year it cracked the top 20 by placing 20th on the 2019 list. That is a jump of 11 places in the past two years alone. It’s certainly doing something right.

The school improved on almost all of U.S. News‘ key metrics. The average GMAT score for last fall’s incoming class rose 11 points to a record 703 from 692. The average GPA for the class increased to 3.48 from 3.37. The acceptance rate for applicants to its MBA program fell to 29.1% from 33.3% a year earlier. And last year’s MBA graduates had average salary and bonus of $135,812, up nicely from the $126,934 of a year earlier. What’s more, a higher percentage of the class were employed three months after graduation: 93.6% last year from 91.5% the previous year.

Those improvements helped USC claim its Top 20 status.

6. Biggest Jump For A Top 25 School? Rice University’s Jones School of Business

While USC did impressively well this year, so did Rice University’s Jones School of Business. Jones rose six places —most of any school in the top 25 — to claim a rank of 23rd. That is the best the school has ever done on the U.S. News survey. Just three years ago, in 2015, Jones placed 33rd best for its full-time MBA program.

The incoming class’ 711 GMAT average vaults Jones ahead of established powers like the London Business School and Duke Fuqua in the race for talent. Rice even came within two points of Virginia Darden – an academic powerhouse and former home of Dean Peter Rodriguez. Long regarded as one of the best-kept secrets in the MBA ranks, Jones’ strengths have traditionally centered on academic rigor, individual attention, and entrepreneurial prowess. Now, the school is itching to step up in weight class – and possesses the vision, leadership, and resources to do just that.

“We could be the highest touch, most intimate, highly selective program in the country,” Rodriguez argues. “We think that we could easily be Top 15 in terms of the level of talent and our selectivity, but at a scale that may be only half of our peer set. … That combination is where we find our sweet spot. Part of what we wanted to do was to be more deliberate in our strategy to be highly selective and assemble a group of 120 full-time students who could go just about anywhere and could certainly go to Top 10 schools.”

John A. Byrne is editor-in-chief of, the leading website covering business schools. He is also the former executive editor of Businessweek and former EIC of Fast Company.

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The Highest Paid MBAs Of 2017

Someone at Harvard Business School secured a starting base salary of half a million dollars, while someone at Stanford Graduate School of Business reported a salary of $450,000. 

This year, the largest base salary for a U.S. student was reported at the Wharton School at the University of Pennsylvania, while the largest salary for a foreign student came out of Dartmouth College’s Tuck School of Business: both were $325,000, and both were in financial services.

At both Wharton and Columbia Business School, U.S. MBAs earned $150,000 signing bonuses; at Columbia, one foreign national raked in a $165,000 bonus post-MBA. And in other compensation, one U.S. grad from Stanford pulled in an astonishing $450,000, while another U.S. student from Harvard received $350,000.

Some surprises popped up further down the ranking, too. At the University of Texas-Austin McCombs School of Business, one U.S. student reported a sign-on bonus of $122,000 — higher than all but two schools in the top 25, Wharton and Columbia. At UNC Kenan-Flagler Business School, one foreign student reported “other” compensation of $156,000 — higher than the highest foreign national’s reported base salary from that school ($151,000).

The highest paychecks after graduation usually go to MBAs who were already making big money before arriving on campus — MBAs with records of performance and years of experience in a highly paid field, such as finance at hedge funds, private equity companies, and venture capital firms. 

The highest salaries also tend to be located in the Northeast — that’s where New York City is, after all. That was the case for the Class of 2017 at both Harvard and Chicago Booth, which tied for No. 1 in the new U.S. News ranking, and at No. 3 Wharton, No. 5 MIT Sloan School of Management, and No. 6 Northwestern University Kellogg School of Management. No. 4 Stanford, No. 7 UC-Berkeley Haas School of Business, and No. 16 UCLA Anderson School of Management — feeder schools for the Silicon Valley tech and startup revolution — boasted large salaries in tech on the West Coast to go with the standard high finance/consulting figures.

Generally, U.S. students are continuing to make more money than their foreign colleagues. At Wharton, the difference in high salaries is $325,000 to $238,600. At Harvard, it’s $300,000 to $250,000. At Stanford, $285,000 to $250,000. You have to go down to Dartmouth Tuck, which had that gaudy $325,000 foreign salary (compared to the top U.S. student salary of $199,400) to find an exception. A little further down and you’ll find a real eyebrow-raiser: the top U.S. salary at Berkeley Haas is $185,000, while the top foreign salary is $300,000. At Carnegie Mellon Tepper School of Business, the high salaries are identical: $152,500. Same for Texas McCombs ($150,000). At Georgetown University McDonough School of Business, U.S. students topped out at $150,000, while one foreign student reported a base salary of $170,000.

At Wharton, where the top bonus in the Class of 2017 was $150,000, the average was just $31,214, but more than three-quarters of MBAs (77.2%) reported receiving some kind of bonus. At Harvard, where the top bonus was $100,000, the average was $29,855, and 69.5% of grads reported getting one. The highest average bonus among the leading schools was at Columbia: $34,481. More than 68% of MBAs out of CBS reported securing a bonus. The highest percentage of grads getting a bonus: 82.2% at Dartmouth Tuck, which translates to 175 students. The lowest: 50.7% at Stanford GSB, or 103 of the Class of 2017.

Stanford grads had the highest average base pay of any top-25 school — $144,455 — and tied with Wharton for the highest overall starting pay (salary plus bonus) at $159,815.

Saturday, March 17, 2018

New Wall Street Journal MBA Ranking Methodology

Times Higher Education (THE) and the WSJ (Journal) have decided to combine their ranking methodologies.  

The methodology will be based on surveys to both alumni and schools, with the possibility that THE and the Journal may survey employers and recruiters at another time. 

In general, the WSJ plans to rank programs under four categories: 
  1. resources (with a weight of 25%), 
  2. engagement (25%), 
  3. outcomes (38%), and 
  4. environment (12%), to measure “the social and human environment the students find themselves in and how well the school will prepare them for a global market.”

The survey includes 21 different metrics:
  • The ranking is heavily dependent on the views of alumni, with 12 of the 21 data points informed by responses from alumni who are both two years and four years out of school.
  • The new ranking will not measure the quality of incoming students in a program, a significant part of the way U.S. News ranks MBA programs by using GMAT and GRE scores, grade-point-averages and acceptance rates.
  • Career outcomes will account for 38% of the total ranking. 
  • The two metrics getting the most weight are the difference between pre-MBA and post-MBA salaries, which will be given a weight of 12%, and faculty-per-student ratios, which will account for 10% of the ranking.

Rankings are becoming more and more disputed. Academics often argue that rankings are misleading and disingenuous. THE is entering the business school market 31 years after Businessweek published its first MBA ranking and 20 years after the debut of the global MBA ranking from The Financial Times. The proliferation of rankings, fueled by consumer interest in them, has largely diminished the influence any one ranking has on the market.

Under resources, meant to measure the resources available to the school to ensure quality teaching and support, there are five measures with four of them taken from the self-reported data by schools and one data point informed by alumni surveys:

Faculty per student (10%)
Publication per faculty (4%)
Faculty with Ph.D./terminal degree (5%)
Career support staff per student (3%)
Career support effectiveness (3%)

Alumni surveys will account for the five metrics THE and WSJ will use to attempt to measure what it calls “the school’s teaching quality and the student’s learning experience:

Recommend (5%)
Collaborate (5%)
Engagement (5%)
Real world (5%)
Research (5%)

This section will include a series of questions on the alumni survey, including “If a friend or a family member were considering going to business school, based on your experience, how likely or unlikely are you to recommend your school to them?”

To get at the degree of collaboration at a school, alumni are being asked, “To what extent did you have the opportunity to interact with the faculty and teachers at your school as part of your learning experience?”

To measure the real world implications of the program, alumni are asked to respond to these questions: 
1. “To what extent did the teaching at your school support applying your learning to the real world?;” 2. “To what extent did your teachers present and discuss recent real-world cases?” 
3. “To what extent did you have opportunities to meet and work with professionals with current real-world knowledge (outside your teachers/lecturers)?”

And when it came to research, alumni are asked the following question: “To what extent did your teachers present and discuss current research?”

The outcome category, meantime, will take into account six separate metrics. Besides differences in pre-and-post salaries, which does not appear to account for sign-on bonuses or other guaranteed compensation, the survey attempts to measure:

Salary difference (12%)
Opportunities (5%)
Worth (5%)
Entrepreneurship (5%)
Social good (5%)
Network (6%)

The ranking will judge opportunities based on alumni responses to what they perceive to be the school’s impact on their careers. It will measure “worth” on alum’s perceived worth of their degree, and it will judge the school’s entrepreneurship efforts on alumni opinion of their school’s teaching skills relevant to starting a business.

One of more intriguing efforts in the ranking concerns its attempt to measure social good. Ultimately, the ranking will do this by asking alumni how many hours of volunteer work they did in the past year. “This measures the degree to which a business school is inculcating the ethos of social good in its graduates,” according to the presentation.

And, finally, to measure the effectiveness of a school’s alumni network, alumni are being asked the following: 
1. “To what extent have you helped other alumni secure paid positions?” 
2. “To what extent have you helped other alumni in matters beyond securing a new position?” 
3. “How useful was your school’s alumni network in helping you secure a position?” 
4. “To what extent, beyond helping to secure a new job, have you used your school’s alumni network since finishing your degree?”

The least weighted section of the ranking will cover a category dubbed “environment,” meant to measure “the social and human environment the students find themselves in and how well the school will prepare them for the global market.” The section will include five different metrics, all provided by the schools, little of which has anything to do with the actual quality of a program.

Economic diversity (2) based on first-generation students
Faculty gender diversity (2%)
Students gender diversity (2%)
International staff (2%)
International students (2%)

Wednesday, March 14, 2018

フィナンシャル・タイムズ:MBAs lose favour among business students, survey finds

Prospective business school students are increasingly shunning MBAs in favor of specialist masters degrees that they see as offering a faster and cheaper route to well-paid jobs, according to research.

Two-thirds of those considering a business school place said they would choose a specialist masters degree over an MBA course, the survey by Carrington Crisp, a London-based education marketing group, found.

This was up from 48%in an identical survey conducted by Carrington Crisp last year. The research involved about 1,000 prospective business school students, most of whom were based in the UK.

The growing interest in specialist business masters degrees is partly driven by greater competition for jobs due to record numbers of people attending UK universities. Specialist masters courses can be taken straight after completing an undergraduate degree, unlike MBAs, where work experience is expected on most programmes.

Specialist masters degrees also tend to cost students considerably less in tuition fees than the six-figure sums the most highly regarded MBA programmes now involve. This partly reflects how specialist masters courses often last one year, whereas MBAs usually run for two.

UK employers prefer people with specialist business masters degrees because they are more skilled than those with only undergraduate qualifications, but do not demand the high salaries that MBA students expect. Carrington Crisp’s findings add weight to an argument by some business school deans that higher education institutions should close their MBA programmes.

The University of Iowa’s Tippie College of Business announced in August last year that it would be phasing out its two-year course, just months after it had been ranked 84th out of 100 on the Financial Times’ global MBA list.

Other institutions, such as King’s College London, have opted against launching MBA courses in the first place, citing skepticism among employers about the value of the qualification by comparison with specialist business masters degrees.

Just 31% 1,056 prospective business school students taking part in the Carrington Crisp survey said they would probably complete an MBA at some point — a figure unchanged from last year’s research. However, the percentage claiming that a specialist masters qualification would be just as valuable as an MBA increased from about a third last year to almost a half in the latest survey.

The Most Affordable Highly Ranked Online MBA Programs

The Most Affordable Highly Ranked Online MBA Programs

Mississippi State tops the list with a tuition of $13,680. Closing out the list is the #1 ranked online MBA program from the Carnegie Mellon Tepper School of Business, with a tuition of $128,000.

An expensive price tag is not always the best program for everyone, and at the same time, an inexpensive program does not necessarily indicate a poor-quality program. Online MBAs can offer a wide range of options for different kinds of students." 

The 10 most affordable top-ranked online MBA programs are:

Mississippi State
Ball State (Miller)
North Dakota
Arkansas State-Jonesboro
Wisconsin MBA Consortium
Kennesaw State (Coles)
Georgia Southern
University of Mississippi

Thursday, March 8, 2018

The Economist: Best MBA Programs for Culture and Classmates

Advantages of Euro MBAs

Here are three reasons to consider applying to European programs:

  1. Most European MBA programs run for 12-18 months: The condensed European format means that you spend less time out of the workforce. This can be advantageous financially, both because there is a diminished opportunity cost, and also because the European programs are often less expensive in an absolute sense.
  2. If you want a truly international career: While both domestic and European programs draw students from all over the world, the top European programs have an eclectic, diversified student body. At Tuck, for instance, around 33% of the class is international, while at London Business School the average is 89%.) Students in European programs benefit from learning and building relationships in a global community. Schools like London Business School, INSEAD, HEC and IESE also have global brand recognition, which can help graduates find employment both domestically and abroad after graduation.
  3. If your GMAT or GRE is somewhat low: The average GMAT at Harvard Business School is 730, while the average GMAT at both London Business School and INSEAD is 708. While these are still impressive numbers, European programs tend to place less emphasis on test scores, and have historically accepted strong American candidates with test scores that don’t reflect their potential. Nevertheless, the caliber of student and of instruction is exceptionally high at the best European programs, and graduates receive an education that is comparable to the top American programs.