How do you judge the value and quality of an undergraduate business education?
In our third annual Poets&Quants‘ ranking of the best undergraduate programs, we believe that the answer to that question comes down to three core issues: the quality of the raw talent coming through the door, what a school does with that talent over four years, and finally how the marketplace responds to the graduates coming off campus. In other words, what’s the quality of the incoming students, what is their view of the academic experience, and what career outcomes are achieved by the graduating class.
And that is exactly the approach we take in what we sincerely believe is the best ranking of undergraduate programs currently available. This year, we rank 82 different business schools in the U.S., up significantly on the 50 ranked on our debut list last year.
In the world of undergraduate business education, there is only one other ranking that matters: U.S. News & World Report. The U.S. News list, however, is merely a subset of data from its overall university rankings. Largely a popularity contest, it is solely based on a poll of deans and senior faculty members, most of whom have little to no knowledge of the programs at rival schools. Asking deans to rate other schools is less a measure of a school’s reputation than it is a collection of prejudices partly based on the self-fulfilling prophecy of U.S. News’ own rankings.
SEVERAL DEANS ASKED US TO CREATE THE RANKING
In creating our 2018 ranking of undergraduate business schools, we invested considerable time and effort into putting together a well-balanced approach that was both fair and thorough. We equally weigh admission standards, the full academic experience, and employment outcomes from data is specific to each business program–not the overall university to which it is attached. That is an important distinction because gathering such information as average SAT scores and starting salaries and bonuses, among other things, is not readily available anywhere else. Admission standards, an assessment of the academic experience and employment outcomes of a business program are critical factors of the quality of the educational experience. Excluding any one of them would result in a disingenuous effort to rank the very best schools.
We made one major tweak to this year’s methodology, but nothing that would dramatically change our approach. We added last year’s alumni responses to the results and gave those responses a weight of 25% to the overall alumni results. The reason: To insure that year-over-year fluctuations don’t have an outsized influence on the results and to increase the credibility of our alumni survey by having more opinions behind it.
Of the 95 schools that completed this year’s school survey, 88 also hit the minimum 10% participation rate for their alumni. Of those 88 schools, 45,680 alums had the opportunity to provide responses to the survey about the academic and co-curricular experience of their higher education. Of those, 5,627 completed the survey for an overall response rate of 12.32%. We combined those responses with the 5,551 alums who completed the survey last year. As a result, our alumni scores are based on the perspectives of more than 11,000 recently graduated students from the ranked schools.
SOME DISAGREEMENT OVER OUR RANKING APPROACH
Although we make every attempt to rank schools fairly, rankings are highly controversial. Not surprisingly, every business school dean isn’t going to agree with our approach–especially if the school doesn’t fare all that well on our methodology. Several deans believe we should adjust starting salaries by cost-of-living in their geographic areas. But given the many far-flung locales where graduates choose to work, including many international locations, it was nearly impossible to devise a fair system of taking cost of living into account.
Besides, we discovered that contrary to popular belief, the power of a higher education brand often exceeds either geography or industry choice as a factor in compensation. Prestige also results in a degree that more effectively travels, having value far beyond a geographic region. The data backs this assertion up in one city after another from Washington, D.C., to Boston and the Bay Area. Even so, we put more emphasis on whether a student was able to get a job within three months of graduation instead of putting too much focus on starting pay.
ADMISSIONS STANDARDS (33.3%)
A vital factor in judging any higher education effort is the quality of the incoming students. After all, a tremendous amount of learning—both academic and social—occur as a result of the quality of your classmates. We agree with that old cliche about playing a sport with people who are equal or better than you. If you play with someone you can always beat, you’ll never reach a level of personal excellence.
We relied on three metrics to measure admissions: The average SAT scores for the latest entering class, given a 35% weight in the admissions category; the percentage of the entering class in 2016 who finished in the top 10% of their high school class, accounting for another 35% of the category; and finally the acceptance rate for the business school program, weighted at 30%.
In several instances, prospective students must pass two hurdles to get into a business school program: First, the university admissions standards and then the business school’s own admissions criteria. We used both acceptance rates to calculate the actual odds of admission for students entering a two-year business program in their junior year.
This data was gathered through a survey that was completed by 93 schools.
No study of undergraduate business programs would be complete without an assessment of the academic and extracurricular elements of the educational experience. So we sent surveys to alumni of each school to determine how satisfied they were on every level of that experience. Deans suggested that we choose alumni who had been away from their schools for two years. That would give them ample time to road test their education, to give an accurate assessment of how well prepared they were for the world of work.
Our survey asked a dozen core questions of graduates, each rated on a one-to-ten scale of satisfaction. For the full list of questions and the graded results, see “2018 Rankings Report Card: How Alums Grade Their Schools.” We also asked alumni whether they had a “significant experience,” defined as a major consulting project, thesis, or other program feature instrumental to their professional development, or a meaningful global immersion.
Schools that either declined to allow their Class of 2016 alumni to be surveyed or failed to meet a 10% threshold for the response rate were excluded from our ranking. As noted earlier, the most important change in this year’s ranking is the addition of the responses from our previous alumni survey. Those responses were given a 25% weight, while the latest alumni survey accounted for 75% of the weight. If a the school’s alumni was not surveyed in prior years, we relied solely on the latest survey results.
EMPLOYMENT OUTCOMES (33.3%)
Students who go to business school expect to get a job not long after graduating. Summer internships are a key way to open the door to a full-time job opportunity. So our employment outcomes category is based on three metrics: the percentage of the latest graduating class (the Class of 2018) to gain jobs within 90 days, weighted 50%; the average salary and bonus for the latest graduating class, adjusted by the percentage of graduates awarded a bonus, weighted 30%, and finally, the percentage of the Class of 2016 that had internships before their senior year, weighted at 20% for our compensation data).
THE FINAL RANKING
The results of all three categories measured were then combined equally to determine an overall ranking. In each category, index scores were created to give credit to one school’s lead over others. We publish the numerical ranking with underlying index scores so that readers can determine how useful an actual ranking could be in relationship to the other schools on the list. It’s important to note that there are nearly 700 undergraduate business programs accredited by the AACSB. The business schools singled out in our debut ranking are all extraordinary, each in the top tenth percentile of accredited schools.
Ultimately, this ranking and the mountains of data we are publishing is an effort to more fully inform prospective students and their parents to make the best educational decisions possible.