As the MBA programmes are varied and diversified, prospective
candidates are becoming picky when they are aware of their choice
as a consumer.
Today, there are well over 100 programmes of business education
in Greater China. To make a good choice of the right programme,
there are major criteria that are commonly used: reputation of
the business schools, nature of the programme, career development
and business networking opportunities.
In the West, while incorporating these critical elements, comprehensive,
systematic and fair systems of ranking have been developed over
the years by major publications to compare and rate different
MBA schools. Within the ranking methodologies, the most popular,
well-regarded and authoritative ones are six ranking methodologies,
which provided by four American and two European publications.
The American Publications:
- Business Week
- US News & World Report
- The Wall Street Journal
Different Methodologies and Different Rankings
Different Ranking Methodologies
of survey / Survey method
||Feedback from recruiters and graduates
||45% on student satisfaction surveys of recent MBA
|| 45% on surveys of corporate recruiters based on their
experiences with school¡¦s graduates
||10% on ¡§Intellectual Capital¡¨ calculated by ¡§Business
Week¡¨, which tallies points for appearance of the faculty's
research in 18 specific publications
||Ranks return on investment
||Average 5-year increase in compensation compared to
pre-MBA salary for each school¡¦s graduates
||Cost of each MBA programmes, including estimated foregone
|U.S. News & World Report
||Using quantitative and qualitative measures
||25% on ratings by business school deans and MBA programme
||15% on ratings by recruiters of the schools at which
||35% on placement statistics provided by each school
||25% on school-reported ¡§selectivity¡¨, the percentage
of applicants the school accepts for admission
|Wall Street Journal
||Survey on recruiters¡¦ perceptions
||Scores are based on how recruiters rated each business
school on 26 attributes.
||Career progression, school diversity and quality
of academic research
||25% on diversity of faculty, students and board members
and the international experience of students, by surveys
completed by the schools themselves
||20% on research
||Using quantitative and qualitative measures
||35% on opening new career opportunities
||35% on personal development and educational experience
||20% on salary increase
||10% on potential to network
Given the very different perspectives, assumptions, choice of
data, and emphasis of the 6 different ranking methodologies, the
ranking results are of course surprisingly very different. For
example, a top MBA school ranked number 1 in one ranking might
not even be top 10 in another.
For example, in one year, Stanford was ranked number 1 by ¡§US
News¡¨ and ¡§World Report¡¨, but it is rated number 11 by ¡§Business
Week¡¨. Also Kellogg School was rated number 1 by ¡§Business Week¡¨,
but ¡§Financial Times¡¨ rated the school only 17. As such this has
fueled much intense debates and arguments amongst the MBA students,
alumni, recruiters, and schools.
The reason for this difference is that different organizations
use different criteria to rank the MBA schools because there is
no such thing as the most objective and comprehensive system of
criteria for ranking. Some put more emphasis on student satisfaction
while others put more emphasis on salary and alumni data. In addition,
the ranking criteria may change from year to year in some publications.
As a result of this, it has created much confusion and worries
amongst the prospective students. At the same time, the schools
and alumni have been enraged and upset. Meanwhile the corporate
recruiters and companies have also been bewildered.
China MBA ranking systems
Following the West, a similar confusing and bewildering situation
has slowly been surfacing in China. Since the first ranking was
published in 2004, today there are two major publications rating
MBA programmes in China. They are ¡§Manager¡¨ magazine and ¡§Forbes
China¡¨. Again, they have also very different perspectives, assumptions
and orientations in their methodologies.
The rankings conducted by "Manager" magazine
In 2004, ¡§Manager¡¨ magazine was the pioneer as it was the first
major publication to rank MBA programmes in China. The ranking
was again published in 2006.
The survey was conducted by telephone interviews, questionnaire,
face-to-face interviews and collection of secondary data.
Three perspectives are adopted in the survey:
Criteria of ranking:
- From the angle of the business school: academic strength and
teaching method of the schools
- From the view point of the students: their satisfaction and
their benefits such as salary
- From the angle of the employers: the employers¡¦ evaluation
of the graduates
- Academic strength / faculty quality
- Internationalism of the student body
- Percentage of graduates with job offers upon graduation
- Reputation of the school
- Diversity of student body
- Average salary before and after graduation
- Salary increase - two years after graduation
The rankings conducted by "Forbes China"
On the other hand, ¡§Forbes China¡¨, as compared
to ¡§Manager¡¨ magazine, is the late comer to the ranking game.
It was published in 2005 and continued in 2007. Its approach is
different and the methodology utilized is presumed to be more
quantifiable and objective.
This publication selected 10 full-time and 15 part-time MBA
programmes in China. Their approach is economic, quantitative
and the ranking is based solely on ROI, the return on investment.
In particular it is the ROI of the graduate four years after his
or her graduation. However, the calculation is slightly different
for full-time and part-time programmes:
ROI = total income four years after graduation - tuition
cost of MBA - opportunity cost since the date of entrance to the
ROI = total income four years after graduation + total income
while enrolled in the MBA programme - tuition cost of MBA - opportunity
cost since the date of entrance to the MBA programme.
As they believe that the students look at the MBA experience
as an investment project, just like investing in a stock, the
paramount importance is in the return from the investment in time
and money. Furthermore, only quantifiable numerical ratio such
as the ROI would give an objective number for comparison.
Deficiencies of the two MBA ranking systems
For the ¡§Manager¡¨ publication, the strength of
the methodology is its comprehensiveness as it considers many
criteria: academic strength/faculty quality, internationalism,
percentage of graduates with job offers upon graduation, reputation,
diversity of student body, average salary before and after graduation,
salary increase - two years after graduation. However, individual
criteria such as reputation, academic strength, etc are very subjective
elements subject to debates. They are easily manipulated for the
purpose of improving a school's ranking. Moreover, even if we
believe that individual criteria are objective, the weighting
of criteria in the total measurement is still very subjective
and debatable. Should reputation of the school be weighted more
important than academic strength?
On the other hand, for the ¡§Forbes China¡¨ ranking system, the
ranking is based on ROI, return on investment. In particular it
relies heavily on total income of the graduate four years after
his graduation. As this ranking system relies heavily on total
income, the truthfulness of this data is of paramount importance.
As it is almost impossible to verify the salary figures of the
surveyed graduates, the draw back or deficiency of this ranking
is the verifiability of the salary data and have the actual ROI.
Another drawback of this ranking system is that it relies heavily
on salary gains of the graduates. Thus, an MBA school with an
emphasis in a particular high paying industry might attract more
prospective candidates and graduate more students in this area.
Also if an MBA school has an emphasis in a particular industry
which has higher than average salary increments, the ROI would
also be affected. For example, schools with more graduates in
international finance due to the school¡¦s reputation in such area
might have higher ROI as salary increase in general is more significant.
So these schools would be rated higher in the ranking.
Another important point is that more and more MBA graduates chose
to become entrepreneurs and start their own business. According
to a recent Forbes report, about 20% of the surveyed MBA graduates
have had started their own business. And as start-up companies
might not pay very much salary to top executives as the bulk of
the economic benefit accrue to stock ownership, a low reported
salary might skew the ROI ratio of the ¡§Forbes¡¨ ranking. Thus
a particular MBA school with entrepreneurial favor or orientation
might as a result report a lower ROI making their ranking lower
and less appealing.
What could happen is that finance-oriented MBA schools might
be rated higher than entrepreneurship-oriented schools and this
is surely not the purpose of any fair ranking system.
So which MBA ranking system is better?
So given the two methodologies existing in China, which is better?
Which one should prospective students choose? If there is a discrepancy
between them, how should they be resolved? Is Tsinghua University's
MBA programme better than Peking University? Can the entire MBA
experience be reduced to a ROI (return on Investment) number?
If ROI and income is the only criterion for selecting an MBA program,
then it is sufficient. But for most students, this might not be
the case. On the other hand, can we rely on soft data such as
reputation for our judgment? How would we compare a school which
is stronger in academic reputation while weaker from the perspective
of the employers?
Making the best use of the current ranking
Although neither of the ranking system is perfect,
we can still gain much benefit from them. The choice of the ranking
system depends on the aim, the perspective, the orientation, the
utility of the prospective student. If the student aims only at
the return of his investment in his education, then surely the
¡§Forbes¡¨ system would suffice. On the other hand, if other factors
or elements are useful, then we can utilize and benefit from the
¡§Manager¡¨ magazine¡¦s ranking.
Although both systems have their draw backs, together they are
useful sign posts for prospective student. With these sign posts
in mind, the students might take into account the learning experience
while at the school, the connections and friendship that they
might make, opportunity for career change and the long term career
Developing a better ranking system for
China in the future
In the future, in order to better guide prospective
students in choosing the right programme, an improved MBA ranking
system is needed. In developing a more useful and improved MBA
ranking system for China, flexible and comprehensiveness should
be important themes.
There are some elements might be considered in the future:
- Enough sample size from the survey of the students and recruiters
- Enough objective and verifiable data
- Taking into account connection or network of the alumni is
a business environment in China where connection is important
and a ranking system incorporating this element would be useful.
- Geographic location of the school which would affect future
connection and job opportunities as certain industries are more
concentrated in a particular region. (For example, financial
industry in Shanghai region as Shanghai is targeted to be the
financial centre of China.)
- Ranking of MBA schools by department or major as this would
help students with particular major in mind.
Finally and most importantly, in developing a better ranking
system for China, the Chinese government might be able to play
a major role in it. The Chinese government, with its tax and income
database, might provide valuable data for the ranking system.
With its role, the future ranking system would be viewed as less
biased, less political, more objective and authoritative.