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When Rankers Cause Rancor: Which Rankings Rule, and Which Are Rank11 min read

Tom Hamnett, MBA Class of 2014

A recent post by Benjamin (“Benji”) Pelled on the NYU Stern Class of 2014 Facebook page generated a Kloutastic 41 comments from fellow classmates. [Comments on posts in private groups do not generate K+ – Ed.] The topic?  A Forbes MBA ranking of NYU Stern at #23 among U.S. business schools.  What earned us such a low ranking?  Was Forbes upset that NYU had bought their 5th Avenue headquarters back in 2010?  Did Dean Henry turn their Boardroom into a personal half-court basketball gymnasium?  Perhaps, but the ranking that caused such rancor had nothing to do with those issues.  The madness was in the methodology.

This article examines the good, the bad, and the ugly of five major business school ranking publications: U.S. News and World Report, The Economist, Forbes, Businessweek, and the Financial Times.  Each varies in the consideration set of business schools, and more importantly, varies in the methodology in assessing business schools.  Why, you may ask, are so many different and varied methodologies needed to rank business schools?  The short answer, is eyeballs.  If everyone agreed on the best ranking methodologies, publications wouldn’t sell magazines or get those sweet, sweet clicks.  Sex may sell, but so does dissent.

The Methodologies

Each examination of the methodologies will include the following: Publication Name, Summary of Publication, NYU Stern Rank, Detailed Methodology, The Good, The Bad, and How to Help Stern Improve.  Please note one or more of each category may contain statements not intended to be factual.

Publication: U.S. News and World Report

Summary: Largely considered the Gold Standard of U.S. business school rankings (, U.S. News and World Report rankings rated 140 US.S business schools in its latest release.

NYU Stern Rank: 10

Methodology: U.S. News generally breaks down its rankings into three categories – Quality Assessment (40%), Placement Assessment (35%), and Student Selectivity (25%).

  • Quality Assessment (40%)
    • Peer assessment (25%): Business school deans and directors of accredited master’s programs ratings of programs on a scale of 1 (marginal) to 5 (outstanding)
    • Recruiter assessment (15%): Corporate recruiters and company contacts from MBA programs previously ranked by U.S. News were ratings of full-time programs on a scale from 1 (marginal) to 5 (outstanding)
    • Placement Assessment (35%)
      • Mean starting salary and bonus (14%): Average starting salary and bonus of 2012 graduates of a full-time master’s program in business
      • Employment rates for full-time master’s program in business graduates (21%)
        • Employment rates at graduation (7%)
        • Employment rates three months after graduation (14%)
        • Student Selectivity (25%)
          • Mean GMAT and GRE scores (16.25%): Average Graduate Management Admission Test score and average GRE quantitative and verbal scores of full-time MBA students entering in fall 2012
          • Mean undergraduate GPA (7.5%): Average undergraduate grade-point average of those students entering the full-time program in fall 2012
          • Acceptance rate (1.25%): Percent of applicants to the full-time program in fall 2012 who were accepted

The Good: Thorough analysis of perception in the higher education and recruiter communities, fact-based ranking of post-graduation employment prospects, student aptitude, and demand for MBA spots

The Bad: Ignores student satisfaction, does not adjust for potential lower salaries of graduates entering start-up or social enterprise fields (skewing towards I-Banking and consulting feeders)

How to Help Stern Improve: Convince other deans that we’re “cool,” graduate with jobs that pay $1m base plus $3-5m bonus, do better on your undergraduate GPA (note: time travel required), reduce full-time class size to one student (lowering acceptance rate to 0.035% and improving selectivity score)


Publication: The Economist

Summary: The Economist lists its top 100 global MBA programs in its rankings.  We are not sure if they are the Gold Standard of global rankings, but we’ll say they are since they rank us highly.

NYU Stern Rank: 7 (in THE WORLD!)

Methodology:  The Economist uses four major categories in its ranking – Open New Career Opportunities (35%), Personal Development/Educational Experience (35%), Increase Salary (20%), Potential to Network (10%).  Additionally, The Economist builds in “memory” to the rankings by taking a weighted average of 2013 (50%), 2012 (30%) and 2011 (20%) data.

  • Open New Career Opportunities (35%)
    • Diversity of Recruiters (8.75%): Number of industry sectors recruiting students
    • Assessment of Career Services (8.75%): Employment rates three months after graduation
    • Jobs Found Through Career Services (8.75%): Percentage of graduates finding jobs through career services
    • Student Assessment (8.75%): Student assessment if career services met expectations and needs
    • Personal Development/Educational Experience (35%)
      • Faculty Quality (8.75%)
        • Faculty to Student Ratio (1.75%)
        • Percentage of Faculty with PhD (3.5%)
        • Faculty Ratings by Students (3.5%)
  • Student Quality (8.75%)
    • Average GMAT Score (6.56%)
    • Average Length of Work Experience (2.19%)
  • Student Diversity (8.75%)
    • International Diversity Score (2.92%)
    • Percentage of Women Students (2.92%)
    • Student Rating of Culture and Classmates (2.92%)
  • Education Experience (8.75%)
    • Student Rating of Program Content and Range of Electives (2.19%)
    • Range of Overseas Exchange Programs (2.19%)
    • Number of Languages on Offer (2.19%)
    • Student Assessment of Facilities and Other Services (2.19%)
    • Increase Salary (20%)
      • How Much Salary Increased After Graduating (5%): Salary Change from pre-MBA to post-MBA (excluding bonuses)
      • Leaving Salary (15%): Post-MBA graduating salary (excluding bonuses)
      • Potential to Network (10%)
        • Breadth of Alumni Network (3.33%): Ratio of registered alumni to current students
        • Internationalism of Alumni (3.33%): Number of overseas countries with an official alumni branch
        • Alumni Effectiveness (3.33%): Student assessment of alumni network

The Good: Assesses student satisfaction across a number of areas, fact-based assessment of student salaries and scores

The Bad: Focus on internationalism may hurt U.S. schools, does not adjust for potential lower salaries of graduates entering start-up or social enterprise fields (skewing towards I-Banking and consulting feeders)

How to Help Stern Improve: Award all non-PhD faculty honorary PhDs, hire temps as faculty to boost up faculty-to-student ratio, graduate with job that pays $5m base salary (no bonus), be extremely satisfied with all aspects of Stern life – from alumni network to career services


Publication: Forbes

Summary: Forbes takes a utilitarian stand on business school – with a singular focus on ROI.  This, in turn, generates significant ROI for Forbes, since it can drive significant clicks and eyeballs with minimal research effort invested.  Some may call it lazy – I call it lazy as a fox! (Note: a different fox from the quick brown one that jumps over the lazy dog)  NYU purchased the Forbes headquarters in 2010, with a five-year lease-back provision included.  After 2015, Dean Henry plans on turning it into the Institute of MBA Salsa and Related Dancing, replacing the current foyer with a Root Beer fountain (source:

NYU Stern Rank: 23 🙁

Methodology: “ROI”-based methodology comparing pre-MBA salary to post-MBA salary of graduates over a five year period.  (OK, it’s a bit more complicated than that, I’ll let Forbes explain – “We compared the alumni earnings in their first five years out of business school to their opportunity cost (two years of forgone compensation, tuition and required fees). We adjusted the median ‘5-year M.B.A. gain’ for cost of living expenses and discounted their earnings gains using a rate tied to money market yields. We also discounted tuition to account for students who pay in-state rates and for the non-repayable financial aid that schools dole out. We did not deduct taxes from the earnings gains. We assume that compensation would have risen half as fast as their post-M.B.A. salary increases had these alumni not attended business school. The 5-year M.B.A. gain represents the net cumulative amount the typical alumni would have earned after five years by getting their M.B.A. versus staying in their pre-M.B.A. career.”)

The Good: Easy to understand methodology and results, based on a few numbers

The Bad: Focuses largely on salary, punishes pre-MBA success, punishes post-MBA chasing your dream

How to Help Stern Improve: Work a minimum wage job pre-MBA, found the next Facebook during your MBA, IPO upon graduation and give yourself a juicy salary


Publication: Businessweek

Summary: Businessweek, owned by Bloomberg, for the past twenty-plus years has been judging global business schools on how well they serve their two main constituencies: students and corporate recruiters.

NYU Stern Rank: 16


Businessweek uses surveys of students (45%) and recruiters (45%) to determine its rankings, and also assesses a school’s intellectual capital (10%).  The current year survey is weighted 50%, the survey from two years ago is 25%, and the survey from four years ago is 25% (applies to both employer survey and student survey).

  • Employer Survey (45%)
    • Top 20 schools they’re familiar with (at which they have actively recruited, on- or off-campus)
    • Perceived quality of grads and the company’s experience with MBAs past and present

Each No. 1 rating earns a school 20 points, each No. 2 rating gets it 19 points, and so on. Using each school’s point total—along with the information on where the company recruits and how many MBAs it hires—constitutes a school’s recruiter score.

  • Student Survey (45%)
    • Teaching quality
    • Career services
    • Other aspects of the B-school experience

Each aspect of the student experience is assessed on a 10-point scale.

  • Intellectual Capital (10%)
    • Number of articles published by each school’s faculty in 20 publications that range from the Journal of Accounting Research to the Harvard Business Review
      • Longer articles given more points than shorter ones

The Good: Seeks to address the primary consumers of MBA programs – students and recruiters, reduces year to year anomalies by taking multiple years into account

The Bad: Excludes fact-based indicators such as test scores and salary information, low results in one year will continue to affect the two iterations of surveys

How to Help Stern Improve: Be extremely satisfied with all aspects of Stern life, convince recruiters that Stern is “cool,” tell professors to “publish or perish” (and make it a credible threat)


Publication: Financial Times (FT)

Summary: Financial Times ranks 155 business schools from 28 countries that meet strict entry criteria: for example, schools must be internationally accredited and the MBA must have run for at least four consecutive years.  Rankings are based on two surveys, one for the schools and one for alumni who completed full-time MBAs in 2009.  Alumni responses account for 59 per cent of the ranking’s weight.  School data accounts for 31% of the ranking’s weight.  Data for the most recent year and one-two years prior (where available) are included.  (Note: Financial Times website provides inconsistent weightings – the reporting weightings are included below, but do not add up correctly.)

NYU Stern Rank: 19


  • Alumni survey (59%)
    • Weighted salary (20%): Average alumnus salary three years after graduation, with adjustment for variations between sectors
    • Salary increase (20%): Average difference in alumnus salary before the MBA to now
      • Absolute salary increase (10%)
      • Salary percentage increase (10%)
  • Value for money (3%): Calculated using salary today, course length, fees and other costs, including lost income during MBA
  • Career progress (3%): Calculated according to changes in the level of seniority and the size of company alumni are working in now, versus before their MBA
  • Aims achieved (3%): The extent to which alumni fulfilled their stated goals or reasons for doing an MBA
  • Placement success (2%): Effectiveness of the school careers service in supporting student recruitment, as rated by their alumni
  • Employed at three months (2%): Percentage of the most recent graduating class who had found employment or accepted a job offer within three months of graduation
  • Alumni recommend (2%): Calculated according to selection by alumni of three schools from which they would recruit MBA graduates
  • School survey (31%)
    • Women faculty (2%): Percentage of female faculty
    • Women students (2%): Percentage of female students on the full-time MBA
    • Women board (1%): Percentage of female members on the school advisory board
    • International faculty (4%): Calculated according to the diversity of faculty by citizenship and the percentage whose citizenship differs from their country of employment
    • International students (4%): Calculated according to the diversity of current MBA students by citizenship and the percentage whose citizenship differs from the country in which they study
    • International board (2%): Percentage of the board whose citizenship differs from the country in which the school is based
    • International mobility (6%): Calculated according to whether alumni worked in different countries pre-MBA, on graduation and three years after graduation
    • International course experience (3%): calculated according to whether the most recent graduating MBA class completed exchanges, research projects, study tours and company internships in countries other than where the school is based
    • Languages (1%): number of extra languages required on completion of the MBA
    • Faculty with doctorates (5%): Percentage of full-time faculty with a doctoral degree
    • FT doctoral rank (5%): calculated according to the number of doctoral graduates from each business school during the past three years. Additional points are awarded if these doctoral graduates took up faculty positions at one of the top 50 full-time MBA schools of 2012
    • FT research rank (10%): Calculated according to the number of articles published by a school’s current full-time faculty members in 45 selected academic and practitioner journals between January 2010 and October 2012

The Good: Assesses the success of alumni in the field and the diversity and quality of faculty

The Bad: Ignores current student satisfaction, highly weights salary increase hurting those who were successful prior to business school, gives weight to doctoral graduates despite a greater focus on the MBA for most business schools

How to Help Stern Improve: Work a minimum wage job pre-MBA then make bank after business school, include a free PhD with every MBA degree, tell professors to “publish or perish” (and make it a credible threat), be extrem
ely satisfied with all aspects of Stern life when you become an alumnus, obtain dual citizenship en masse prior to graduation


Closing Thoughts

Although every ranking has its flaws, there is no denying that rankings are influential in attracting the best applicants and the best recruiters to any MBA program.  While we here at NYU Stern interact every day with our smart, interesting, thoughtful classmates, a strong ranking helps reflect that to the outside world.  Among the most thorough and most respected ranking systems, NYU Stern generally fares well.  And the strategic direction Dean Henry and the rest of the administration has laid out for Stern represents a promising indicator of continued strength.  Despite any ill will Forbes has for Dean Henry’s Salsa dreams for their current headquarters, the current caliber of Stern students, faculty, and alumni positions it well to maintain and improve its brand, prestige, and ranking into the future.

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