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28 Jan 2018, 22:45
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FT Rankings and the Joke that their methodology is
So today FT just released its annual MBA rankings. Although there are a few shockers, I am not surprised one bit. While U.S. News entirely U.S.-centric ranking has become the most influential in the MBA game, FT still is a followed by the candidates from Asia and Europe.
There is a major flaw in there methodology ->
In there own words ->
Quote:
The FT’s methodology is based on 20 different metrics, including several that tend to favor non-U.S. schools. Among other things, metrics that add score points to a school’s standing include the percentage of students, faculty and trustees who carry passports from a country where the school is not located, whether students and alumni worked in foreign countries, whether students had an international course experience and whether the school requires students to learn extra languages prior to graduation. What any of these criteria have to do with the quality of an MBA degree is a matter of opinion.
Often, an even greater impact on a school’s rank can be the result of the FT’s decision to use a purchasing power parity (PPP) formula to convert and count actual salary data–the most heavily weighted metric in the methodology. Such currency gymnastics favor schools that supply graduates to countries with high rates of poverty. With the PPP adjustment, for example, it’s probable that CEIBS would not have finished in the top ten. The school’s latest employment report shows that the median base salary for MBAs was $67,282. The FT’s adjusted salary figure for CEIBS alumni is $162,858.
This adjustment has an especially negative impact on all U.S. schools because the vast majority of international students who get an MBA in America want to live and work in the U.S. where their compensation would not be inflated by the PPA filter. Although 34% of this year’s graduating class at Harvard Business School were international, for example, only 13% of the class took jobs overseas and that percentage includes some U.S. citizens. At INSEAD, in contrast, nearly 70& of the MBA students from Asia Pacific (67%), Africa and the Middle East (57%), and Latin America (63%) returned home to regions where a PPP adjustment would inflate their actual compensation.
What’s more, even though the FT is putting a 40% weight on these pay numbers, they fail to account for total compensation—just salary. In the U.S., a good many MBAs from elite schools often get stock options (at Stanford, 32% of the newly minted graduates last year reported stock compensation) and significant annual bonuses that would put their schools well ahead of many of the institutions that are routinely ranked higher by the Financial Times.
Unlike U.S. News, moreover, the FT pays no attention at all to incoming student quality in its ranking–another reason why U.S. schools do less well on this list. GMAT and GRE scores and undergraduate grade point averages, all key components of a business school admission decisions–are ignored. So are acceptance rates which also tend to be lower at many of the best U.S. schools. At Stanford, for example, only 5% of the candidates who apply for admission get into its MBA program. At INSEAD, which does not report this number, the acceptance rate is routinely above 30%, according to insiders.
Another issue with the FT ranking is that the newspaper fails to reveal the underlying index scores that allow it to crank out the numerical rankings. Those scores show whether a school’s rank is statistically different among other schools ranked nearby. In most rankings, these index scores tend to cluster in close bands and often show that there is no meaningful statistical difference between a school ranked 45th and one ranked 50th. The FT concedes that clustering is a reality and that there are four different groups of schools on its list of the top 100. In a footnote, the newspaper points out that the top 14 schools, starting with Stanford and ending with Hong Kong University Science and Technology, are in a top group. The second cluster, headed by Yale SOM, spans the schools ranked 15th to 44th. “Differences between schools are relatively small within this group,” the FT admits. The 48 schools in the next group are “similarly close together.” Just how close is unknown because the FT won’t publish the index numbers for each school.
Plus, I dont trust a rankings methodology which puts Krannert over Kelley; Rice over Emory; Lancaster university (Whatever that is) over Madison and Olin freaking Babson (I mean common) over Carlson!
Nah. I am not buying it.
Article used -> FT and P&Q .
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stonecold
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28 Jan 2018, 22:56
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I am no fan of DJT but I would like to use his quote -> FT is just fake news!
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Aaliyah537
Joined: 17 Nov 2016
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30 Jan 2018, 10:54
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Its interesting that the analysis focuses on how US schools are supposedly disfavored. Yet 12 of the Top 20 in the FT 2018 are US schools. The US has by far more schools in the top 20 than any other country. Would you prefer that all top 20 are American?
If anything, I would argue that Canadian schools are the most highly disadvantaged because Canadian salaries are lower than in the U.S. in general, regardless of how strong the school is considered by employers, and the lower salaries are in Canadian dollars.
If anything, I would argue that Canadian schools are the most highly disadvantaged because Canadian salaries are lower than in the U.S. in general, regardless of how strong the school is considered by employers, and the lower salaries are in Canadian dollars.
