Only One Non-U.S. School Makes The New Global Businessweek MBA Ranking - Poets&Quants

The IMD campus in Lausanne, Switzerland

For the first time ever, Bloomberg Businessweek today (Dec. 11) published a global ranking of the best full-time MBA programs but the results still favor U.S. business schools. The only non-U.S. player to break into the top 20 global list is IMD, the Switzerland-based school with a small, one-year MBA offering.

On the global ranking, which follows the publication of the magazine’s U.S. list on Nov. 8, IMD is in tenth place behind nine U.S. schools led by Stanford University’s Graduate School of Business. In contrast, the Financial Times ranking, which has been global from its start in 1999, has eight non-U.S. schools in its top 20 and IMD doesn’t even make it that high on the FT list. Instead, it was ranked 24th by the Financial Times earlier this year.

After IMD, London Business School is ranked 23rd in the world, INSEAD comes in at 25th, IESE in Spain at 28th, Cambridge at 34th, SDA Bocconi in Italy as 39th, ESADE in Spain as 44th. That makes seven non-U.S. schools in the top 50 on the Businessweek global ranking, compared to 26 in the rival FT survey. Of the 124 ranked MBA programs by Bloomberg Businessweek, 30 are at schools outside the U.S.

REAL SHOCKERS: HEC PARIS, CEIBS & IE FAIL TO MAKE THE TOP 50

The global ranking, using the same updated methodology to rank U.S. schools last month, contains some real shockers. HEC Paris, ranked 21st by the FT, failed to make Businessweek‘s top 50. Instead, HEC finished 31 sports lower, in 52nd place. CEIBS in Shanghai and IE Business School in Spain also didn’t fare that well on the new list, ranking 81st and 83rd, respectively.

The FT had ranked CEIBS as having the eighth best MBA program in the world in 2018, while IE was dropped from the FT list this year due to “irregularities” in the school’s submission of information to the FT  (see Why IE Business School Lost Its FT Ranking). But IE had been ranked eighth by the FT in 2017.

There are also several notable omissions. The global list does not include a single school in India. The University of Toronto’s Rotman School of Management is also not on the list, helping to make Western University’s Ivey School, with a global rank of 56th, the best MBA program in Canada, according to Businessweek.

The results will likely cause an uproar of sorts among non-U.S. business schools. In recent years, many of the deans of those schools have claimed that they have caught up in quality with their U.S. counterparts as evidenced by their improved performance in the FT ranking. However, many U.S. B-school deans say the FT survey tends to favor non-U.S. players. Undoubtedly, deans of international MBA programs will now make the same claims about the Businessweek global list.

BW’S DECISION NOT TO ADJUST PAY DATA BEHIND THE BIG DIFFERENCES

Before this year, Businessweek would publish separate U.S. and international rankings in the belief that its methodology was not easily transferable across vastly different cultures and regions. Last year, when BW produced its separate ranking for MBA programs outside the U.S., INSEAD was first, followed by London Business School, and IESE. IMD was ranked fifth best, just behind Oxford, which now ranks 51st on the combined global list.

The major reason for the comparatively poor showing by non-U.S. schools has to do with the way Businessweek crunched compensation data which is heavily weighed in the new methodology. For non-U.S.-based schools, local compensation figures were converted into U.S. dollars on or near the data collection cutoff date, but salaries were not adjusted for purchasing power parity. The FT adjusts MBA pay for PPP which tends to inflate compensation, particularly in nations where poverty is high.

Of the four indexes used to rank MBA programs, Businessweek places a 38.5% of the weight on compensation. That compares with 27.9% on a so-called networking index, 23.1% on learning, and 10.5% on entrepreneurship. Each of these categories include multiple metrics. For compensation, the editors place a 25% weight on survey questions and the remaining 75% on figures provided in surveys and year-old employment reports from business schools.

ACCORDING TO BW. MBAS FROM IMD HAD HIGHER STARTING SALARIES IN FINANCE THAN WHARTON MBAS

The 75% component consists of median salary after graduation (weighted 30%), median alumni current salary (22.5%), percentage of students seeking employment who were employed within three months of graduation (11.25%); percentage of students reporting salary information who received a bonus (5.625%), and median sign-on bonus (5.625%).

IMD’s placement on the ranking was almost certainly helped by the heavy weighting put on compensation. At IMD, where MBAs tend to be a bit older and more experienced, graduates typically pull down higher starting salaries. In finance, for example, IMD grads had among the highest median starting salaries for any MBAs, including Wharton.

According to Businessweek, MBAs who went into finance from IMD last year had median starting salaries of $132,000, $2K more than Wharton and significantly higher than London Business School where the equivalent salary was $106,000. Only Harvard and Stanford, where the median for finance was $150,000 in 2017, did better than IMD.

IMD is nestled near the mountains of Switzerland but also has a campus in Singapore

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