Why The Economist Should Stop Ranking B-Schools

A day after Forbes magazine released its biennial ranking of the best business schools, The Economist weighed in today (Oct. 10) with its own annual list of the top MBA programs worldwide. The University of Chicago's Booth School of Business topped the ranking for the second year in a row.

But as is often the case with The Economist's ranking of the Top 100 global schools, it's a head-scratching mess. IE Business School in Spain and Hult International Business School both did nose dives this year, plummeting 28 places to rank 50th and 59th, respectively. Yet, little if anything, has changed at these two schools.

The big three U.S. schools--Harvard, Stanford, and Wharton--all suffered declines. In the 12 different versions of this ranking The Economist has published since 2002, Harvard, Stanford and Wharton has never topped the list. Neither has London Business School or INSEAD, generally regarded as two of the very best business schools in Europe.

What gives? It’s just another peculiar, topsy-turvy ranking from The Economist, which has consistently published the most unstable and volatile ranking of business schools. This year some 34 business schools had double-digit climbs or falls in the ranking, including three newcomers and five schools that completely fell out of the Top 100.

As if it couldn’t get any worse, one business school literally came out of nowhere, climbing at least 71 places to finish at a rank of 30th. The European School of Management and Technology in Germany, which was not on The Economist’s Top 100 list last year, showed up above such world renown business schools at Cambridge, the University of Texas, Georgetown University, and Italy’s SDA Bocconi. Because ESMT failed to make the ranking in 2012, it meant that if it were the 101st school last year it would have had to rise 71 places in a single year to end up 30th.

The biggest gains by schools on last year’s list were posted by the business school at the University of St. Gallen, which zoomed ahead 29 places to rank 52, and SDA Bocconi, which climbed 23 spots to rank 47th this year from 70th in 2012. The big U.S. gainers are the University of Georgia’s Terry School, up 19 places to rank 79, and Arizona State University’s Carey School and Case Western’s Weatherhead School, both up 14 positions to rank 45th and 86, respectively.

The Economist says that its methodology for ranking MBA programs takes into account new career opportunities (35%); personal development/educational experience (35%); increasing salary (20%); and the potential to network (10%). The figures are a mixture of hard data and the subjective marks given by the school’s students who are surveyed by the magazine.

What generally causes such wide swings is a methodology where the underlying result is so close that a numerical rank for a school if more often than not statistically meaningless. The Economist does not publish underlying index numbers along with the actual rank of each school so it’s not possible to tell exactly how close one school is to another. But it would not be possible to have so many dramatic changes in a year-over-year ranking unless the differences among schools are mere slivers of fractions.

Obviously, business school MBA programs don’t change all that dramatically in a single year. So there are no explainable transformations of curriculum, student quality or MBA outcomes to justify such roller coaster results–especially when they occur to roughly a third of the sampled schools. The MBA programs at Hult and IE didn’t deteriorate since last year in any meaningful way to drop like stones. The University of St. Gallen and SDA Bocconi didn’t appreciably improve to warrant jumps of 29- and 23-places in the space of 12 months.

Losing Big Ground In The Economist's 2013 Ranking

School	2013 Rank	2012 Rank	Change
IE Business School	50	22	-28
Hult International	59	31	-28
USC (Marshall)	63	43	-20
Grenoble	89	69	-20
Boston University	73	55	-18
Lancaster	95	80	-15
EMLYON	70	57	-13
WHU (Beisheim)	99	87	-12
City University (Cass)	42	30	-12
Southern Methodist (Cox)	93	82	-11
EDHEC	62	52	-10
Wake Forest (Babcock)	60	50	-10

What's most surprising is that a publication that is as widely admired and respected as The Economist could publish a ranking so devoid of authority and credibility. Yet, year after year, the magazine cranks out its wacky list. It's time for The Economist to give it up and stop ranking business schools.

Author: 

John A. Byrne

Chairman & Editor-in-Chief at C-Change Media Inc.