How important are MBA Rankings?

To say that MBA Rankings are like an annual edition of the Old Testament, etched in stone and blessed by the supreme being, would be an overstatement. So will be the assumption that these annual rankings have no standing in the way students, educators, and even the business schools, themselves, are influenced in their decision making.

MBA Rankings have become increasingly relied upon and various publications have devised their methodologies to not only stand apart but also reflect various salient components of the scores of business schools and their respective MBA programs.

Among the main reasons that they have become so popular is the relative ease with which prospective students are able to narrow their initial conditions for selecting their choice of MBA applications. There is however, caution to be maintained with the large scale, often conflicting set of rankings available.

Even with seemingly similar ranking parameters, there seems to be contradictory surveys and results floating about, making this process more subjective than mere objective comparisons of scores.

In this article, we will talk about what makes MBA Rankings popular, what one needs to be cautious of when considering them solely for MBA program selection, how the various popular rankings are derived, and more. In essence, we will determine whether MBA Rankings are important and how much should you rely on them.
 

Are MBA rankings reliable?

MBA Rankings come with their caveats that may prevent a wholehearted submission to their conclusions. These caveats are sometimes by virtue of the methodology adopted to arrive at a gradation, or the result of questionable means attempted by some business schools to manipulate the results. Whatever be the version of inconsistency, these concerns may lend a reason to beware of what exactly one wants out of such rankings.
 
You can question the value of MBA rankings through any one of these concerns.

• If MBA Rankings are listing grades, assigned to MBA Programs, why is it that no two rankings yield the same result?
• How do the ranking methodologies ensure an accurate and complete picture for evaluating the quality of a program?
• Are business-schools immune to temptations to manipulate their data to give a false impression of grandeur for various MBA Rankings?

 
Let us understand how these concerns may dampen, or explain, the credibility of these MBA rankings.
 

• Ranking inconsistencies: The simple answer is that ranking publications use different parameters, assigned to different weights, to identify the superiority of one MBA program over another. It is also important to understand the source of the information used by the various rankings for their list.
  One can measure the same parameters but from different set of sources. Say, employer feedback can vary in the responding organizations, their type of firm (what specialization – marketing, consulting, finance, etc.), size of the firms, and even the feedback questions chosen for the responses – such as is there more emphasis on hard or soft skills.
• Methodology concerns: Almost all publications have their own recipe for evaluating MBA program rankings. The parameters that are often relied upon – B-School selectivity (number applied vs number admitted), faculty quality (research presence, international reputation), employer perception (how recruiters gauge the capability of graduates), ROI (gain of post to pre MBA salary), alumni feedback (program experience) – are represented with different weights, with some publications focusing on only a singular aspect of the MBA, such as career growth.
  However, if any of these publications use an incorrect basis for their analysis, it skews the results unfairly. For instance, if post-MBA growth is gauged only by salaries and not bonuses, benefits, or other perks. Or for that matter, surveys or feedback that are not up to date, redundant, or even comprehensive.
• Ranking manipulation: Of course, there is also the possibility of business schools employing tactics to give an inflated representation to MBA rankings. Read this article on whether MBA rankings are losing their credibility, for a better insight.
  To sum up, b-schools are vulnerable to a self-serving motivation to appear higher on rankings. More popularity generally spells more applications, more attention from recruiters, and an overall boost in the school’s earnings.

However, it is still definitely not unreasonable to rely on MBA Rankings. We cover some of the advantages for the same.
 

Why are MBA Rankings important and how to use them?

There is a strong support for the existence and relevance of MBA rankings given its usefulness in a lot of scenarios. Even with the possible caveats, they offer a lot of advantages.

The key is to understand how to interpret the rankings and perform ones’ own research before singularly relying on them for decision making.

Advocates in favor of MBA rankings argue, quite legitimately so, that these rankings play an important role in enabling both application and recruitment processes. Let’s take a look at some of the benefits of referring to these rankings.
 

• The shortlisting phase: We have already touched upon their use by prospective candidates who can sift through the endless MBA programs to make their shortlist decisions. MBA applications are an expensive, and more significantly, time consuming affair. A list of programs that have been vouched for their quality of education, ROI, and/or other factors, is the right place to begin.
  After all, MBA programs are intense and costly and for all intents and purposes, an investment. Thus, expert considerations made by publications that have experience in surveying and evaluating those factors, help.
• Gauging employer perceptions: Certain rankings like QS Global MBA Rankings, Bloomberg Businessweek and US News MBA and Business School Rankings indicate a weight gathered from recruiter surveys and feedback.
  Students may use these rankings to evaluate the program opinion that these reputed recruiters hold, from that particular ranking component. Recruiters too may use these rankings at gauging the skill-set and feedback from other giant employers like McKinsey, Bain & Co., Deloitte, and more.
• Aligning your preferences: Even for choosing schools based on MBA specializations, you can apply the methodology chosen by a ranking publication. Understand the industry specific rankings to gather employer perceptions of particular programs.
  This technique can also be utilized to gain an understanding of what kind of roles or where, location wise, various MBA graduates are placed. Thus, any of your preferences can be aligned accordingly for your B-school choice.
• Watching for consistent performance: How have certain programs been cumulatively performing over the years. Consistent performance in ranking is an assuring feature in MBA programs.
  Did any particular school suddenly jump a few ranks? If so, why? How does that affect your decision?
  Random fluctuations may be an indication of major changes in the programs or in the methodologies.

 
In summary, MBA rankings provide the higher-level view of various MBA program performances and reputations. Thus, MBA Rankings play a role at the initial level of research into MBA programs for your future. They provide a somewhat fixed baseline for comparing schools based on known factors, within constraints of measurements.

Upon shortlisting your choice of b-schools, a deeper insight is obviously gained by further research, contacting present students and alumni on their feedback, considerations such as location, specialization, your budget, and finally narrowing down the possibilities to the handful that are likely to “fit” your candidature, and vice versa. 

They are thus quite important in determining the next course of action, as far as applications are concerned (see how your profile aligns with the MBA programs and try our Profile Evaluation for MBA universities in USA, Canada, UK and India) and which ones would you be considering for the subsequent intensive research for expanding your career.
 
Meanwhile here are a few links within the purview of this topic.

• Global MBA Rankings
• Best MBA in USA and Best Business Schools in Europe
• MBA Programs with the best ROI
• And here’s our complete resource for Business Schools over the world
• Here’s MBA Crystal Ball’s MBA Rankings based on consistency in performance and popularity of B-Schools – Most Popular MBA Programs

 
Sources: 1, 2, 3, 4, 5, 6, 7, 8