Businessweek Rankings 2014

Let’s see how full-time MBA programs in the U.S. fared this year on the BW rankings…

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There were some huge changes this year! Let’s take a look at some of the highlights:

• Newcomers to the top 20 this year are Yale SOM, which made a huge jump from 21st place to 10th place; Maryland Smith which went from 24th to 17th place; and Emory Goizueta which jumped from 22nd place to 18th place this year.

• There are three new schools in the top 10 this year – Yale SOM, as mentioned above; Columbia Business School (13th in 2012 and 5th this year); and CMU Tepper (which moved just one place from 11th place to 10th place).

• Beyond that, there was some major shifting in the rankings. The top 3 schools were all different this year (Wharton and Booth still there, but rearranged), with Harvard Business School falling from 2nd place to 8th place.

UVA Darden also fell significantly this year, from 10th place to 20th.

• Big jumpers further down the rankings include Rice University Jones (from 34th to 25th); UC Irvine Merage (43rd to 31st); and Rochester Simon (50th to 38th).

• The schools that fell the most in the rankings include Texas A&M Mays (26th to 42nd); University of Wisconsin-Madison (33rd to 44th); Boston University (39th to 57th); Babson Olin (from 42nd to 58th); Thunderbird (45th to 62nd); and Arizona Carey (49th to 67th).

And here’s the scoop on the best U.S. undergraduate business schools in 2014…

Do MBA rankings really matter? Click here for the 2-min answer.

Some highlights include:

• Newcomers to the top 20 are Northeastern (from 25th last year to 19th this year) and CMU Tepper (from 24th last year to 17th this year).

• The only new school in the top 10 this year is Indiana Kelley, which jumped from 13th place last year to 8th place this year.

Michigan Ross fell from the top 10, from 8th place to 12th place.

• Big jumpers include Southern Methodist Cox, which jumped from 30th to 21st place; Babson, which jumped from 36th place to 26th place; UM Amherst Isenberg, which jumped from 45th to 36th; Bryant, which jumped from 63rd to 49th; and Case Western Reserve Weatherhead which jumped from 69th to 50th.

• Big falls include Villanova, which fell from 15th place to 24th; U of Illinois Urbana-Champaign which fell from 21st to 34th; and James Madison University which fell from 29th to 40th place.

For details on how ranking methodology see:

Best Business Schools 2014: How They Were Ranked

Best Undergraduate Business Schools 2014: How We Ranked Them

Analysis of the 2014 Businessweek Rankings

Businessweek made changes to its methodology (presented here and analyzed here by John Byrne, the founder of the BW rankings) this year.

The Basics of BW’s Rankings Remain Unchanged

This year, as in the past, BW surveyed recruiters and students. The recruiter satisfaction results comprise 45% of the ranking. The student satisfaction survey results comprise another 45% and the remaining 10% is determined by “expertise of each school’s faculty” as evidenced by faculty research published in prominent academic journals AKA intellectual capital.

What’s New in BW’s Rankings Methodology?

• The employer ranking reflects this year’s data only. Previous rankings used data from the last three surveys or six years of biannual rankings data while weighting the most recent year most heavily.

BW surveyed fifteen times the recruiters this year than it did in previous years. Previously, BW surveyed major recruiters who tended to recruit at multiple business schools. This year, BW attempted to survey as many MBA recruiters as possible, including “recruiters” who recruit primarily if not exclusively at their alma mater. The increased survey size is a major methodology change. The alumni recruiters may have a certain bias towards the school they attended. BW attempted statistically to reduce the impact of that bias, but it probably helped smaller schools like Duke, Tepper, and Yale, and hurt the traditional leaders, like Harvard, Wharton, and Chicago.

Impact of the Methodology Changes

• Surprise! The results will shock many applicants. Seven programs, including Duke and Yale, rank above HBS and MIT. Indiana Kelley and Maryland Smith rank above Haas, NYU Stern, and Darden. These are unexpected results.

• Reemphasizes the importance of understanding methodology. The changes highlight the need for anyone using the rankings as indications of “quality” or even reputation and brand value (a bad idea in my book) to look at the underlying data. Smith is ranked overall at 17. It was ranked #1 for student satisfaction and #51 in the employer survey ranking. Applicants to Smith should inquire about what is changing in its career management center. Clearly there is a satisfaction gap that has to be addressed.

• Increased volatility. Since BW has removed older rankings data from the ranking and has dramatically widened the survey pool while incorporating alumni recruiters, you are guaranteed to see more changes and more radical changes than with the previous methodology.

• Cognitive Dissonance. Either BW rankings will lose credibility because they don’t conform to expectations and will be more volatile, or people’s perception of the programs will change because of the BW rankings.

My money is on the former: loss of credibility. If BW’s results become less stable and predictable (like The Economist’s), they are more likely to lose credibility than to contribute to changes in school reputation.

As always my best advice to applicants reviewing the rankings is to:

• Use specialty rankings to get a sense of what schools excel in your areas of interest.

• Use the data that the ranking databases provide.

• If you have any thought of actually using the overall rankings, understand what they measure, and ask yourself if those qualities are of paramount importance to you. BW has been wonderfully transparent and even shared the questions actually asked in the survey.

• Layer in reputation and brand, i.e. ranking, after determining what schools best support your goals and are most likely to accept you.

Are You Misusing the B-School Rankings?

Linda AbrahamBy Linda Abraham, president and founder of Accepted.com and co-author of the new, definitive book on MBA admissions, MBA Admission for Smarties: The No-Nonsense Guide to Acceptance at Top Business Schools.

 

Related Resources:

• 2014 Economist MBA Rankings
• MBA Rankings: Why Should I Care?
• U.S. News 2015 Best Colleges

What’s an MBA Really Worth?

Applying to top MBA programs? Download your free copy of Best MBA Programs: A Guide to Selecting the Right One

How much do MBAs really earn?

This is the question tackled in a recent Poets & Quants article in which John Byrne presents PayScale data provided exclusively for P&Q. In the analysis, PayScale calculates the estimated median pay and bonuses (not including stock-based compensation, retirement benefits, or non-cash benefits like healthcare) of graduates from the top 50 U.S. MBA programs from 2004 to 2014. Here are some of the highlights from the article:

Harvard, Stanford, and Wharton earn the most over a 20-year period (at $3,233,000, $3,011,000 and $2,989,000 respectively), with average income at the former nearly doubling the average income of graduates from Texas A&M’s Mays Business School (at $1,781,820.)

• Some schools “punched above their weight class” like Boston University, whose graduates earned an average of $2,329,000, making the school rank in 19th place on this list, while ranked overall (in the regular MBA full-time rankings) by P&Q in 40th.

• Another high roller from lower down on the list is UC-Irvine Merage, where MBAs earn $2,319,932 over 20 years, putting them in 21st place, though generally ranked in 47th.

• More food for thought: At HBS, the average age of graduation is 29 years old. Our 20-year payout here brings these MBAs up to 49 years old, giving them another 16 years until retirement at 65. Based on their 20-year earnings, they may earn another $3.2 million, which combined with their 20-year earnings, brings their total up to $6.5 million. (Remember, this is a conservative estimate as it doesn’t include stock and non-cash compensation.)

• Compare the above HBS figures to the $2.5 million estimated lifetime earnings (age 24 to 64) of people with a master’s degree (non-MBA). (Data from the U.S. Census Bureau.) Someone with an MBA from Harvard will earn nearly three times as much as someone with a master’s degree. And someone with an MBA from Texas A&M will still earn about $1 million more than the average MA/MS holder.

• More comparisons (based on U.S. Census Bureau data): The average high school graduate can expect to earn $1.2 million in a lifetime, compared to the $2.1 million of someone with a bachelor’s degree. PhDs earn $3.4 million on average during their working lifetime. Doctors and lawyers can expect lifetime earnings of about $4.4 million – still less than the lifetime earnings of MBAs from at least 28 business schools.

• According to PayScale data, graduates from BA programs earn a median $1,301,000 20 years post-graduation. All MBAs, on average, earned $1,771,000, with those in the top 50 earning a median $2,266,000. An MBA in general will earn you about half a million more than a BA; an MBA from a top 50 school will get you yet another half a million more.

Looking for admissions advice?
Source: PayScale for Poets&Quants

For MBA admissions tips, check out our MBA Admissions 101 Pages!
Source: Payscale Inc. for 20-year estimate, business schools reporting to U.S. News for 2013 starting pay and bonus.

Learn How to Choose the Best MBA Program for You!

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Related Resources:

Best MBA Programs: A Guide to Selecting the Right One
• B-Schools with the Highest ROIs
• Which Graduate Schools Should You Apply To?

2014 Economist MBA Rankings

2014 Economist Full-Time Global MBA Rankings:Download your free copy of MBA Rankings: What You Need to Know

1. Chicago Booth (U.S.)

2. Dartmouth Tuck (U.S.)

3. UVA Darden (U.S.)

4. HEC Paris (France)

5. IESE Business School (Spain)

6. Harvard Business School (U.S.)

7. UC Berkeley Haas (U.S.)

8. NYU Stern (U.S.)

9. Stanford GSB (U.S.)

10. Columbia Business School (U.S.)

11. UPenn Wharton (U.S.)

12. MIT Sloan (U.S.)

13. UCLA Anderson (U.S.)

14. Northwestern Kellogg (U.S.)

15. London Business School (U.K.)

16. University of Queensland Business School (Australia)

17. Emory Goizueta (U.S.)

18. INSEAD (France)

19. Yale SOM (U.S.)

20. Michigan Ross (U.S.)

Top 10 B-Schools with the Highest GMAT Scores:

table

Top 10 MBA Programs for “Potential to Network”:

1. HEC Paris (France)

2. Vlerick Leuven Gent Management School (Belgium)

3. Thunderbird School for Global Management (U.S.)

4. NYU Stern (U.S.)

5. UC Berkeley Haas (U.S.)

6. Notre Dame Mendoza (U.S.)

7. Warwick Business School (U.K.)

8. USC Marshall (U.S.)

9. Melbourne Business School (Australia)

10. UVA Darden (U.S.)

A Poets & Quants article on the rankings states that at least 17 business schools declined to participate in this year’s rankings, many claiming that The Economist’s methodology is faulty. Some of these schools include Babson Olin, Toronto Rotman, Sauder School (British Columbia), Minnesota Carlson, McGill Desautels, Purdue Krannert, and, University of Manchester (U.K.), Imperial College Business School (U.K.), University of Illinois at Urbana-Champaign.

Regarding methodology, 80% of the data used for the rankings is derived from surveys provided by the schools themselves. The remaining 20% of information comes from current students and recent grads.

John Byrne notes that since The Economist rankings launched in 2002, Harvard, Stanford, and Wharton have never topped the charts. This year, the schools rank at 6th, 9th, and 11th place, respectively. In 2005, Harvard and Wharton weren’t included in the rankings as they declined to contribute data. (That year, those two programs also declined to participate with the Businessweek rankings.)

Matt Symonds, who wrote a critique of the rankings, “Leave no MBA ranking unquestioned,” provides these additional points:

• Booth took the #1 spot for the third year in a row, and the fifth time in the last eight years.

• There are only six European schools in the top 25; in 2008, there were 11. This year, Cambridge Judge and Oxford Saïd both dropped 15 places, to 52nd and 69th place respectively.

• The breakdown of the criteria used to rank the schools goes as follows: personal development/education experience (35%), open new career opportunities (35%), increase salary (20%), and potential to network (10%).

• This year, more than 20 schools rose or fell by double-digits (and thus the rankings have been criticized for their volatility).

• Big droppers include University of Bath School of Management which fell 23 spots from its previous 20th place; York Schulich fell to 41st place from 22nd last year.

• Big jumpers include Kellogg and Yale which both jumped 9 places up to 14th and 19th place respectively; Rochester Simon and Temple Fox both jumped 20 places to 58th and 57th place respectively.

Are You Misusing the B-School Rankings?

Accepted.com: Helping You Write Your Best

Related Resources:

• MBA Rankings: Why Should I Care?
MBA Rankings: What You Need to Know
• Top 10 B-Schools with the Most Satisfied Graduates

GRE vs. GMAT: Trends

A recent Poets & Quants article highlights some of the current data surrounding the decision applicants make in choosing between the GRE and GMAT. According to the Educational Testing Service, almost 10% of MBA applicants took the GRE instead of the GMAT in the 2012-2013 testing year, a 38% increase since last year’s testing period.

One factor responsible for this shift is the fact that some major MBA players (mainly Chicago Booth, UC Berkeley Haas, and Georgetown McDonough) finally decided to accept the GRE.

Here are some additional stats:

• 29% of b-schools surveyed by Kaplan Test Prep said that at least 10% of their applicants were GRE test takers. 18% of schools said that their GRE pool was at 18%. 6% of respondents said that their applicant pool was made up of half GRE test takers and half GMAT test takers.

• At Yale SOM, 21% of applicants submitted GRE scores last year, an increase of 18% since the previous year.

• 25% of Notre Dame Mendoza prospective students submitted a GRE score last year, up from 12% previously.

• At UCLA Anderson, only 3% of applicants submitted GRE scores.

• 5% of Columbia Business School applicants took the GRE last year, compared to 2% the year before.

• At Emory Goizueta, 8% of last year’s prospective students took the GMAT, up from the previous year’s 3%.

• Washington Olin’s GRE pool dropped 7% from 31% in 2012 to 24% last year (which is still high).

• Texas McCombs also took a slight dip, from 13% in 2012 to 11% last year.

• In India, the number of GRE test takers increased 68% last year, from 52,792 in 2012 to 88,884 last year. In the U.S., the increase in test takers over that same period was just 5.3%, from 401,286 test takers in 2012 to 422.668 this past year.

Reasons for the Growth in GRE

• Versatility of the GRE. Rob Weiler, UCLA Anderson’s associate dean, points out that many students are submitting scores from GRE tests they took up to a few years ago. “It’s clear that they had graduate school in mind when they took the test but were still considering the best avenue to take for their career,” he says. “Once it became clear that business school was their choice, they used their GRE score to apply.”

• Price. The GMAT is priced at $250, while the GRE costs only $195.

• Rankings and willingness to accept lower scores. The P&Q article states that admissions consultants are suggesting that applicants take the GRE over the GMAT because of the way official rankings take the GMAT into consideration. “So an admissions office might be overly sensitive to a low GMAT score, but might pass on a lower GRE,” states the article, which then goes on to compare GREs and GMATs of accepted students at Yale – the former being lower than the latter. (Using ETS’ comparative tool, the equivalent GMAT score based on the GRE scores accepted at Yale would be 660; the average GMAT score at Yale is 714. A similar phenomenon is found with other programs, with a 91 point gap at Cornell Johnson, a 126 point gap at Washington Olin, and a 118 point gap at Vanderbilt Owen.)

• The ScoreSelect option. This allows test takers to retake the exam and send only their best score to their target schools.

The following chart comes from the P&Q article and shows the percentage of 2012-2013 applicants who submitted GRE scores, as well as the GRE-GMAT differences.

Check out our GMAT 101 Page!

Source: Business schools reporting to U.S. News & World Report

My thoughts

On one hand, the focus on the comparator tool may be misplaced. When I have spoken to admissions committee members about the GRE we spoke in terms of percentile scores. I would love to see this data and the comparison between the GMAT and the GRE comparing percentile scores. I think that would be more worthwhile. I suspect it would still show similar results, but perhaps with smaller gaps.

Regardless of the validity of the comparator tool, this article suggests that the GRE may not only be cheaper, it may in a way take your score out of the public eye. And if you don’t need a high GMAT to snag an interview at an elite bank or consulting firm, and you’re struggling with the GMAT, the GRE may be a better test for you.

Although I can’t locate the blog post, soon after schools started accepting the GRE in greater numbers, I suggested that those of you with other evidence of academic ability who are struggling with the GMAT should contemplate applying with the GRE. I felt that because the GRE is not reflected in the published GMAT averages that applicants, alumni, and employers use as a quick-and-dirty reflection of student “quality,” submitting a GRE score instead of the GMAT would give admissions officers wiggle room to focus on other aspects of your application. It would allow them to consider your application without worrying about a hit to their GMAT average.

On the other hand if you can do well on the GMAT, go for it. Schools want GMAT bragging rights.

Got GMAT Questions? Visit GMAT 101 for advice.

Linda Abraham By , president and founder of Accepted.com and co-author of the new, definitive book on MBA admissions, MBA Admission for Smarties: The No-Nonsense Guide to Acceptance at Top Business Schools.

Where Does Wall St. Hire: U.S. B-Schools Sending Grads into Financial Services

According to GMAC’s just released Prospective Students Survey Report, 37% of prospective MBA students hope to go into finance after they earn their degree, making it the most popular post-MBA destination. If you fall into this crowded category, then you’ll be interested in knowing which b-schools prepare the most grads for jobs in financial services.

As you’ll see below, we’ve created two charts (based on data from U.S. News’ top 25, which happens to have 26 schools because of a tie for 25th place) that display the U.S. schools with the highest percentage of grads going into financial services and those with the highest number of grads reporting financial services jobs. We did not include non-U.S. programs because U.S. News doesn’t rank them, and we wanted the data to be consistent. There are definitely financial powerhouses outside the U.S.

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For more information about the top MBA programs, check out our B-School Zone pages.

The top names on this list, in terms of absolute numbers, are the standard bearers in finance, known as Wall St. breeding grounds. I was a little surprised at how low MIT Sloan came out on both totem poles. It has very prominent faculty in finance, including Nobel Prize winner Robert C. Merton. Perhaps those smaller schools known for entrepreneurship, like Stanford, MIT Sloan, and Haas, are sending more of their graduates into non-traditional fields. Consequently they will not do as well in this kind of a ranking even though they have the curricular, co-curricular, and placement ability to support financial services goals.

Can you put less weight on attending schools at the top of the list even though you may want to go into financial services when you graduate? You can if you’ve already worked in financial services and are looking to get a broader understanding of business, management and leadership through the MBA. Those of you with that background already have valuable skills and a relevant network. Those of you looking to get into financial services for the first time, however, will probably want to look more closely at the programs higher up this list.

Realize that these lists don’t reflect the class profile of the programs or the typical credentials of admitted applicants. You need to know that information too to assess your competitiveness when choosing where to apply. Washington Olin (2nd in percentages) has an average GMAT of 696. UNC Kenan-Flagler (ranked #4 in percentages) has an average GMAT of 683. Both schools send 32% and 28% of their grads respectively into financial services. For those of you without GMAT bragging rights or other qualifications to get into Chicago (average GMAT 723), Columbia (716), and Wharton (average GMAT 725) — the leaders on this list in absolute numbers and overall USN ranking – Olin and Kenan-Flagler may be a good alternative and at least start you down your desired career path.

Much as I did with the similar data we compiled on consulting I must issue a warning: This list or ranking is valuable, but it doesn’t tell the whole story. “Financial services” is a very broad category covering everything from private equity and venture capital, to investment banking, money management, corporate financial analyst positions, and even good old bean counting (AKA accounting). Clearly your specific area of interest is critical, and you have to dig deeper into the employment reports at your target schools to confirm strong placement in your particular area of interest. Also understand how the curriculum and co-curricular activities, events, and clubs will help you do what you want to do after your MBA.

You want to attend a b-school that will help you realize your career goals. Identifying schools with exceptional track records for students with similar goals – especially for those of you seeking to change industries and enter financial services – is an excellent place to start when choosing which MBA programs to apply to, and ultimately, deciding where to attend. This list helps you focus your research. It is the starting gate, not the finish line.

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Linda Abraham By , president and founder of Accepted.com and co-author of the new, definitive book on MBA admissions, MBA Admission for Smarties: The No-Nonsense Guide to Acceptance at Top Business Schools.