the business school rankings dilemma

The Business SchoolRankings Dilemma

A Report from a Task Force of

AACSB International’s Committee on

Issues in Management Education

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Ranking Report cover 8/16/05 10:44 PM Page FC1

The Business SchoolRankings Dilemma

A Report from a Task Force of

AACSB International’s Committee on

Issues in Management Education

AACSB International – The Association to Advance Collegiate Schools of Business

777 South Harbour Island BoulevardSuite 750Tampa, Florida 33602-5730 USATel: 1+ 813-769-6500Fax: 1+ 813-769-6559www.aacsb.edu

© 2005 AACSB International

Contents

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Business school rankings have been around since the late1980s, when a couple of general business publications real-ized that “best of” lists were a powerful sales tool. Since

then, they have mushroomed. The rankings have consistentlycaused concern among AACSB International accredited schoolsand members. For instance, across various rankings differentmethodologies and data collection produce wide variations inresults. Students and others often do not realize that usually onlyMBA programs are being evaluated. Nonetheless, most businessschools continue to participate even though the cost in manpowerand resources is high because the rankings garner so much atten-tion from prospective students, alumni, and major donors.

A rankings task force of AACSB International’s Committee onIssues in Management Education (CIME) has created the followingreport to the Board of Directors that marks the beginning of along-term initiative to place rankings in perspective and to expandaccess to students and employers to additional, relevant data theyneed to make decisions. The report contains four critical recom-mendations.

Most important among the recommendations, we must communi-cate with all of our stakeholders as often and as effectively as possi-ble about the limitations of rankings. Consumers of this informationneed to know that the variables are constantly changing and arenot proven as a measure of quality. There’s no doubt it’s gratifyingto a school when it receives a high ranking or climbs significantlyfrom one year to the next. But the public must be educated aboutrankings and the availability of additional information. At the sametime, AACSB must assist schools in influencing the media toimprove the methodologies and measures used.

Foreword


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I urge you to read the report and pass it along to your con-stituents. Add your voice so that we may work together to fosterawareness about the rankings. With appropriate action, we canimpact the rankings process and provide the public with more balanced, accurate information about business schools and theirprograms.

Richard E. SorensenChair, Board of Directors, AACSB InternationalDean, Pamplin College of Business Virginia Polytechnic Institute and State University

August 2005


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Concerned by the proliferation of media rankings and

their potential for negative impact, The Committee on

Issues in Management Education appointed a task force to

explore the effects on business schools as well as AACSB

International’s role in defining quality in MBA pro-

grams and assisting prospective students to decide among

program alternatives. This report articulates the task force

findings and offers several recommendations.

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Submitted by the Media Rankings Task Force:

Chair

Robert B. Duncan, The Eli & Edythe L. Broad Dean, The EliBroad College of Business & Eli Broad Graduate School ofManagement, Michigan State University

Members

Dan R. LeClair, vice president and chief knowledge officer, AACSB International

Sung Joo Park, dean, KAIST Graduate School of Management

Andrew J. Policano, dean, Graduate School of Management,University of California, Irvine

Sharon J. Smoski, assistant vice president, Learning andDevelopment Department, State Farm Insurance Companies

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Since arriving on the scene in the late 1980s, media rankingsof business school activities have grown in number andimportance. Almost every major business news publication,

including BusinessWeek, Financial Times, The Wall Street Journal,The Economist, and U.S. News & World Report, ranks full-timeMBA programs. Other publications rank programs by special inter-est (e.g., top techno-MBAs) or by region (e.g., best in Asia).There also are a limited number of rankings that focus on areasbeyond the MBA, such as undergraduate programs, executive edu-cation, and research quality in some countries or regions.

Each ranking has its own methodology and collects its own data,sometimes with assistance from contract or partner organizations.Some rankings are based on surveys of constituent groups, such asgraduating students (e.g., BusinessWeek) or corporate recruiters(e.g., The Wall Street Journal). Others apply at least some weightto data reported directly by schools (e.g., U.S. News & WorldReport, Financial Times). Despite these methodological differ-ences, all rankings share a number of characteristics. By definition,rankings collapse quality into a single dimension—a number. Theyalso limit the number of ranked programs, and apply the same formula regardless of a program’s mission or orientation.

Publications that rank MBA programs claim to assist decision makers in selecting programs and making schools more responsiveto the expectations of students and corporations. Although it isnot clear that any single ranking has achieved these objectives, as a whole, media rankings have raised the overall visibility of MBAprograms and business schools. Unfortunately, the impact of mediarankings on business schools haven’t been completely positive.

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The Impact of Media Rankings


Deans have always believed that rankings measures do not accu-rately reflect the quality of business education. Measures used inmedia rankings are often arbitrary, selected based on convenience,and definitely controversial. Characteristics that are of little impor-tance are often included, while important characteristics areexcluded because they are more difficult to measure. Even whenthe measures do correlate with quality, media attempts to draw significant differences among similar programs are inappropriate.Indeed, weights that are applied to different characteristics todetermine ranks are subjective and generally not justified.

Two additional problems plague the rankings data. First, the dataitself can be expensive for schools to provide. Schools can’t affordnot to participate, and many have had to hire additional staff torespond to the increasing number of media requests for data.Although there is substantial overlap in the types of MBA data collected, each media survey requests some unique data andapplies different definitions. The end result is that schools spendan extraordinary amount of time preparing data for media surveys.

Second, the data reported to and published by the media areinconsistent. The lack of formal definitions and verificationprocesses, combined with the highly visible and influential role ofdata in rankings, has been a recipe for highly implausible data.

This task force believes that media rankings have had other moreserious negative impacts on business education. Because rankingsof full-time MBA programs are commonly presented under thelabel of “best b-schools,” the public has developed a narrow defi-nition about the breadth and value of business education. Thisdiminishes the importance of faculty research, undergraduate

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programs, and doctoral education and compels schools to investmore heavily in highly-visible MBA programs. Many schools havereallocated resources to activities that can enhance its ranking, suchas marketing campaigns, luxurious facilities for a small number ofMBA students, and concierge services for recruiters; but these ges-tures have little to do with quality. The result is an increase in thecost of delivering an MBA program, which generally translates tohigher tuition for students. Rankings that rely on student orrecruiter satisfaction can favor surface-level changes over substan-tive improvements. Similarly, rankings based on formulas thatinclude student “selectivity” motivate schools to shrink enteringclasses and reduce diversity to “pump-up” statistics, such as average GMAT scores.

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In the past, AACSB International has not taken an active position regarding the media rankings of business schools.However, recent changes in the business school environment

and mission of AACSB have converged to force and enable action.Intensifying competition for students has caused accredited schoolsand schools seeking accreditation to insist that the association takesteps to increase the external recognition of its accreditation brand.Historically, the value of AACSB accreditation has been mostlyinternal—relying on schools’ innate desire to excel and improve.As market power in education has shifted from providers to con-sumers, however, the external focus of rankings has increased inimportance over accreditation. Without intervention, rankedschools may begin to question the need for AACSB accreditation.

AACSB’s investment in a business school database has created newopportunities to address problems associated with media rankings.With its new infrastructure, the association’s Knowledge Servicesdepartment can efficiently capture and disseminate data and infor-mation, including data normally collected by the media rankings.This investment also has enabled AACSB to publish searchableprofiles of member business schools on its Web site. It is the onlysource of information about the whole business school and, withdata on more than 600 institutions, it already is the largest busi-ness school data resource available. As the database expands anddeepens, AACSB can eventually offer a better alternative to themedia rankings as a source of information about business schoolsand programs.

The AACSB International Board of Directors recently introducedthought leadership and advocacy as priorities in the association’simmediate future. Successfully achieving these ends will requireAACSB to develop clear messages about important issues facingbusiness schools, including media rankings.

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The Role of AACSB International


This task force concludes that the media rankings of MBAprograms have had serious negative impacts on businesseducation. Moreover, AACSB now has the opportunity,

ability, and mandate to assist schools in addressing these impacts.Several recommendations to address the current issues are offeredbelow. The recommendations are neither exhaustive nor mutuallyexclusive.

Recommendation 1: Communicate to engage and influence

Consistent with its emerging thought leadership and advocacyroles, AACSB should develop and implement a comprehensiveglobal communication program to engage and influence themedia, educate the public about the limitations of rankings, andassist business school leaders in dealing with issues and concernsrelated to rankings. AACSB should directly engage the media in adialogue about the negative impacts of the rankings and serve as achannel for accredited schools to influence the media to: (a) labelMBA rankings accurately, (b) convert from rankings to ratings,which assign programs of similar quality to the same level, and (c) improve the methodologies and measures used in the rankings.

A key objective of the communication initiative would be to educate the public (e.g., prospective students and employers)about the limitations and risks of MBA program rankings, whilesimultaneously promoting the value of accreditation. The initiativealso should provide tools for deans and other business school lead-ers to communicate effectively about rankings to program stake-holders, especially alumni, advisory board members, and centraladministration.

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Summary and Recommendations


Recommendation 2: Expand AACSB’s role in defining and collectingMBA data

AACSB should define and collect better indicators of programquality, such as academic qualifications of faculty and research. Itshould continue to clarify definitions of MBA admissions and post-graduate employment data, improve the consistency and accuracyof publicly available data, and reduce the data reporting burden tobusiness schools. With involvement from AACSB, the MBA CareerServices Council (MBA CSC) and Graduate ManagementAdmission Council (GMAC) have already developed workable definitions for a large portion of the admissions and post-graduateemployment data requested in media surveys. AACSB has agreedto apply the definitions to its own data collection and should workclosely with GMAC and MBA CSC to encourage the media to dothe same.

A central repository or warehouse of data has the potential toimprove data consistency and accuracy, as well as reduce data col-lection costs to the media and schools. GMAC already has takeninitial steps to develop a central warehouse of data. More than 100schools have signed on to provide MBA admissions data andagreed to a random check of data using a set of agreed-upon pro-cedures. One goal of the project is for schools to submit data tothe warehouse once each year and refer any external data requeststo GMAC. AACSB Knowledge Services also has plans to expandits data collection to include more detailed information aboutMBA admissions and post-graduate employment. While these dataare too important for AACSB to rely on other organizations tocollect on its behalf, AACSB should seek collaborative opportuni-ties to improve data accuracy, ensure global applicability, andreduce the reporting burden to schools.

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Recommendation 3: Strengthen the external value of accreditation

AACSB must enhance the external value of its accreditation brand.Accredited schools must be motivated to consistently and continu-ously promote accreditation as an important differentiator of quali-ty. A soon-to-be-launched “value of accreditation” campaign willtake major steps in this direction.

The Accreditation Quality Committee also recently approved a setof “Responsibilities of Institutions with AACSB InternationalAccreditation.” In addition to representing accreditation andreporting accurately, institutions are expected to “promote AACSBInternational accreditation in catalogs, Web sites, and promotionalmaterials.” If successfully implemented along with recommenda-tions 1 and 2, the value of accreditation campaign can establishAACSB and its accredited schools as the most credible source ofinformation about MBA programs.

The current strength of media rankings also presents an opportu-nity to promote the value of accreditation. AACSB could advertisethe fact that nearly 100% of the institutions whose programs areranked are AACSB accredited. The value of accreditation couldalso be enhanced if the rankings included measures of quality thatare consistent with the standards.

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Recommendation 4: Conduct research on rankings and quality

A dearth of meaningful research has hampered AACSB’s ability toinfluence the media and public. AACSB should commission studiesabout (a) the methods, validity, and impacts of media rankings, (b) the link between research, teaching, and practice, and (c) clus-ters of schools that are similar in quality. This research may assistAACSB to convince the media to “rate” rather than “rank” programs,revise measures to include research productivity, and educate thepublic about the limitations of rankings. Results could be publishedin BizEd, (the association’s bimonthly magazine), education-ori-ented journals, or major media publications, such as magazines andnewspapers.

This research will have additional benefits to AACSB. In additionto enhancing other thought leadership initiatives (e.g., doctoralfaculty shortage, value of management education), the researchmay lead to new services or changes in current services. For exam-ple, what we learn might cause AACSB to reconsider a tiered formof accreditation or to provide benchmarking services related toresearch.

In summary, AACSB International has the mandate and ability toprovide leadership to overcome problems associated with themedia rankings of MBA programs. To be sure, improvementsprobably won’t happen overnight. Implementing the recommen-dations presented in this report will provide a solid foundation forchange and for the future of AACSB International.

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Chair

Richard E. SorensenDean, Pamplin College of BusinessVirginia Polytechnic Institute and State University

Members

Amelia MaurizioDirector, Education Alliances, Global CommunicationsSAP America, Inc.

Angel CabreraPresident, ThunderbirdThe Garvin School of International Management

Robert B. DuncanThe Eli and Edyth L. Broad DeanThe Eli Broad College of BusinessThe Eli Broad Graduate School of ManagementMichigan State University

Fred EvansDean, College of Business and EconomicsCalifornia State University, Northridge

John FernandesPresident and Chief Executive OfficerAACSB International

Anne GrahamExecutive Vice President and Chief Operating OfficerAACSB International

Stuart I. GreenbaumDean, Olin School of BusinessWashington University in St. Louis

Committee on Issues in Management Education


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Yash P. GuptaDean, Marshall School of BusinessUniversity of Southern California

Daniel R. LeClairVice President and Chief Knowledge OfficerAACSB International

Patrick R. LiverpoolDean, School of ManagementDelaware State University

Patricia W. MeyersDean, School of Business AdministrationUniversity of Dayton

Sung Joo ParkDean, KAIST Graduate School of ManagementKorea Advanced Institute of Science and Technology

Andrew J. PolicanoDean, Graduate School of ManagementUniversity of California-Irvine

Sharon J. SmoskiAssistant Vice President, Management Planning and InformationState Farm Insurance Companies

Jerry TrapnellExecutive Vice President and Chief Accreditation OfficerAACSB International

Stephen R. WatsonPrincipal, Henley Management College

Doyle Z. WilliamsDean, Sam M. Walton College of BusinessUniversity of Arkansas


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Notes

Mission Statement

AACSB International advances management education worldwidethrough accreditation and thought leadership.

For more information about this report, contact:

Roxanna Strawn, Assistant Vice President, Communications: 1+ 813-769-6509. E-mail: [email protected] or,

John Polis, Manager, Public Relations: 1+ 813-769-6516. E-mail: [email protected].


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the business school rankings dilemma

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