MBA Rankings: A Better Way

To say that MBA programs have undergone significant changes over the past three decades is an understatement. There have been dramatic shifts in approaches, curricula, and the overall MBA experience, all with a decidedly student-centric focus. Media rankings, such as those published by Bloomberg Businessweek, have played an influential role in this transformation by shining a light into an insular academic world, opening it up to scrutiny and increased accountability. In particular, rankings have shown business schools they must operate within a larger environment, one in which multiple stakeholders (students, businesses, society at large) have a vested interest in the educational process. To be certain, business schools now understand this message and have set a course to work on improving their MBA offerings.

Yet for all the good that has come from the rise of rankings, our research suggests that ranking systems fall short of achieving their primary objective, which is to summarize comprehensively educational or academic quality—the most fundamental product of any MBA program. Despite decades of discussion, a complete understanding of MBA program quality has yet to be achieved. Accordingly, we recently completed a project to define MBA program quality exhaustively (read a short summary here). Put simply, our findings suggest that MBA quality is multifaceted, and although rankings capture some important aspects of academic quality (e.g., student economic outcomes), they fail to assess adequately a number of critical features of the educational process, such as the quality of curricula, educational environment, and student learning, to name a few.

What our research implies most significantly is that if we are truly concerned with continuous improvement of educational quality, we must not only recognize the complex and multifaceted nature of MBA program quality, but also build a system that adequately captures and presents these features. One promising way of accomplishing this is to develop a more complete rating (as opposed to ranking) system built on a comprehensive set of quality indicators. Rating systems are as commonplace as rankings (e.g., Standard & Poor's, Consumer Reports, Zagat, etc.), but they function in a very different way. A central advantage of a rating system is that it can supply data to end users on a broader range of quality factors. Further, unlike rankings in which weightings are predetermined, rating systems allow users to apply their own weighting based on the criteria they view as personally important or relevant to their concerns.

Investing in Strengths

A positive by-product of a rating system is that it more clearly highlights differences among programs and implies that one criterion isn't necessarily better than any other. This aspect of ratings is likely to encourage MBA programs to identify their key values and subsequently invest in their strengths in order to serve their mission more fully. Unfortunately, rankings all too often encourage schools to chase the same small set of heavily weighted criteria regardless of their educational mission. A rating system, however, would make it perfectly apparent when schools possess equivalent levels of quality on any given criterion, whereas a rank, by its very nature, forces even the most miniscule of differences to appear significant.

Because ratings are not concerned with declaring a "winner," the end result is a system that provides flexibility, transparency, and increased usability to all stakeholders. With more than 700 programs now accredited by AACSB or Equis, it is hard to see the value of continuing to provide such limited information to consumers on a narrow set of factors typical of most rankings. A rating system could be used to establish distinctive sets of schools that achieve high levels of quality on different indicators, where the number of schools able to achieve such levels of quality is limited only by their own efforts and accomplishments. Finally, a rating system would serve all business school stakeholders better by providing the types of information that can truly shape decision-making, within and outside business schools. End users could query a rating system to address their particular needs, such as recruiters interested in programs that have high-quality international internships or applicants who want a program that emphasizes the development of team skills.

We know that MBA program stakeholders care deeply about educational quality, and they deserve to know more about the variety of factors that contribute to it. But we must also recognize that providing transparent information about MBA program quality is not a zero-sum proposition. There is certainly room in the marketplace for alternative systems to co-exist with present ones. It is crucial that any new system fully capture the nuances of quality and be administered by independent and objective groups. We hope our research in comprehensively defining MBA quality will help bring this new alternative to life.