Thursday, January 2, 2014

Is Your Business School a Rankings Underachiever?

NYU Stern School of Business building in Green...
NYU Stern School of Business (Wikipedia)
by John A. Byrne, Fast Company & BusinessWeek Former Editor, LinkedIn:

You can’t put a price on a good reputation. That’s true in business … and even more so in academia.

Take business schools, for example. Prospective employers and partners often make assumptions based on where you graduated.

List an MBA from a top tier and doors magically open. Fellow alums give you the secret handshake.

Your superiors bother to learn your name. And your peers listen more intently when you speak (at least at first).

A business school’s reputation carries that kind of weight. Question is, how much of that reputation is based on quantitative data over carefully-calibrated branding?

U.S. News and World Report recently attempted to answer that question for undergraduate programs. As the proverbial “gold standard” for postsecondary rankings, U.S. News conducted its second annual analysis of schools whose rank doesn’t match its reputation.

Using a methodology developed by Bob Morse, the director of research atU.S. News, undergraduate programs were broken into two categories: “overperformers” and “underperformers.”

Here’s how it worked: U.S. News bases its undergraduate rankings on factors like “admissions selectivity, financial and faculty resources, graduation and retention rates, alumni giving, and graduation rate performance.”

Each of these indicators is given a particular weight in a formula used to calculate a school’s overall rank. However, U.S. News also factors in “peer assessments,” where administrators and tenured faculty rate other schools using a 5 point scale, with 1 being “marginal” and 5 being “outstanding.”

After ranking schools from highest to lowest on peer assessment, U.S. News subtracts a school’s overall rank from its peer assessment rank. A positive number indicates that a school is an “over performer,” while a negative number reflects an “underperformer.”

In Morse’s words, an overperforming school has a “reputation among its academic peers [that] has not kept pace with what it has achieved in the underlying academic indicators. This could be because academic reputation is a lagging indicator - it can take time for a school’s academic peers to understand the real progress of a university.”

Conversely, an “underperforming” school’s ranking may be artificially inflated based on the subjective peer assessments of the academics who were polled.

Impressed with this formula, we wondered what it might reveal about MBA programs. In the 2014 U.S. NewsBusiness School Rankings, peer assessment scores were derived from “business school deans and directors of accredited master’s programs in business.”

According to U.S. News, 43% of the deans and directors surveyed responded, with these peer assessments accounting for 25% of each school’s weighted ranking.

As a result, a fourth of a business program’s ranking is based on the opinions of experts who may not necessarily be basing their ratings on empirical data.

The only loser in the Top 20 appears to be the University of Michigan's Ross School of Business which is viewed as a top 10 school by business school deans and directors, yet shares 14th place with UCLA in the overall rankings.

Conversely, Emory University's Goizueta School of Business and New York University's Stern School are slightly undervalued by their peers. Emory, in particular, is a school to watch.

The more interesting results appear further down the rankings hierarchy. The biggest under-performer, for example, is the Thunderbird School of Global Management.

The deans think of Thunderbird in rather lofty terms, giving it a rank of 31. But the school's underlying stats are only good enough for U.S. News to award the school an overall rank of 88th.

To see the full results of our rankings analysis, check out Poets&

Is Your Business School a Rankings Underachiever?
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