IMD tops Economist Intelligence Unit's MBA rankings, but are the good times about to end for business school graduates?

IMD's has been ranked the first in the world in the Economist Intelligence Unit's latest survey of full-time MBA programmes. It is the first time the Swiss school has topped the annual ranking. IMD took the number one slot from the University of Chicago's Graduate School of Business, which drops to third, while Spanish school IESE claims second place. Stanford and Dartmouth College's Tuck School of Business round off the top five. The highest ranked Asian school was Hong Kong University of Science and Technology in 11th.

IMD is one of the most international business schools in the world. Ninety-seven percent of its students come from abroad—with around half of those from outside of Europe. One of the reasons for the school's triumph has been the success of its careers placement service. IMD students can expect to earn a basic salary of US$130,000 a year on their graduation—compared with pre-MBA salaries of US$79,000.

Indeed this year was a bumper year all round for MBA salaries. Columbia in New York, for example, reported an average leaving salary of US107,000, while London Business School's graduates can expect US$120,000-a-year. But with the banking crisis leading to job losses in financial centres around the world, this might be the best it gets for business school graduates for some time.

Bill Ridgers, editor of Which MBA? commented: "The financial services industry has for some time competed with consultancies to be the leading recruiter of MBA graduates, offering huge salaries along the way. But with recent failures, a lot of talented bankers are suddenly out of a job. It is likely that current students are likely to find themselves graduating into a buyers' market and salaries will start to reflect this."

Top 100 full-time MBA programmes
Rank (2007 position in brackets)	School	Country
1 (5)	IMD - International Institute for Management Development	Switzerland
2 (3)	IESE Business School—University of Navarra	Spain
3 (1)	University of Chicago—Graduate School of Business	US
4 (2)	Stanford Graduate School of Business	US
5 (4)	Dartmouth College—Tuck School of Business	US
6 (6)	University of California at Berkeley—Haas School of Business	US
7 (7)	University of Cambridge—Judge Business School	UK
8 (8)	New York University—Leonard N Stern School of Business	US
9 (15)	London Business School	UK
10 (9)	IE Business School	Spain
11 (20)	Hong Kong University of Science and Technology—School of Business and Management	Hong Kong
12 (13)	Harvard Business School	US
13 (11)	Cranfield School of Management	UK
14 (22)	Vlerick Leuven Gent Management School	Belgium
15 (24)	York University—Schulich School of Business	Canada
16 (14)	Northwestern University—Kellogg School of Management	US
17 (21)	University of Pennsylvania—Wharton School	US
18 (16)	Massachusetts Institute of Technology—MIT Sloan School of Management	US
19 (17)	INSEAD	France/Singapore
20 (10)	Henley Business School	UK
21 (18)	Columbia Business School	US
22 (12)	University of Michigan—Stephen M. Ross School of Business	US
23 (27)	Warwick Business School	UK
24 (19)	Ashridge	UK
25 (23)	University of Virginia—Darden Graduate School of Business Administration	US
26 (n/a)	Melbourne Business School—University of Melbourne	Australia
27 (31)	University of Oxford—Saïd Business School	UK
28 (28)	Cornell University—Johnson Graduate School of Management	US
29 (29)	Duke University—Fuqua School of Business	US
30 (25)	Yale School of Management	US
31 (39)	Hult International Business School	US
32 (36)	HEC School of Management, Paris	France
33 (47)	ESADE Business School	Spain
34 (32)	University of Notre Dame—Mendoza College of Business	US
35 (33)	Carnegie Mellon University—The Tepper School of Business	US
36 (26)	University of Washington—Foster School of Business	US
37 (35)	International University of Monaco	Monaco
38 (41)	University of Southern California—Marshall School of Business	US
39 (30)	Emory University—Goizueta Business School	US
40 (44)	University College Dublin—Michael Smurfit Graduate School of Business	Ireland
41 (n/a)	UCLA—The Anderson School	US
42 (n/a)	Indiana University—Kelley School of Business	US
43 (34)	Ohio State University—Fisher College of Business	US
44 (n/a)	Rice University—Jesse H Jones Graduate School of Management	US
45 (58)	Imperial College London—Tanaka Business School	UK
46 (38)	City University—Cass Business School	UK
47 (43)	Monash University	Australia
48 (45)	University of Texas at Austin—McCombs School of Business	US
49 (42)	University of North Carolina at Chapel Hill—Kenan-Flagler Business School	US
50 (46)	Rotterdam School of Management, Erasmus University	Netherlands
51 (n/a)	Mannheim Business School	Germany
52 (50)	Lancaster University Management School	UK
53 (51)	University of Maryland—Robert H Smith School of Business	US
54 (48)	Wisconsin Business School	US
55 (56)	University of Edinburgh Management School	UK
56 (49)	Washington University in St Louis—Olin School of Business	US
57 (84)	Macquarie Graduate School of Management	Australia
58 (37)	University of Hong Kong—Faculty of Business and Economics	Hong Kong
59 (60)	Brandeis International Business School	US
60 (57)	Manchester Business School	UK
61 (54)	Aston Business School	UK
62 (40)	Pennsylvania State University—Smeal College of Business	US
63 (65)	University of Bath—School of Management	UK
64 (n/a)	University of Minnesota—Carlson School of Management	US
65 (59)	Durham Business School	UK
66 (55)	Vanderbilt University—Owen Graduate School of Management	US
67 (63)	University of Birmingham—Birmingham Business School	UK
68 (71)	University of California at Davis	US
69 (78)	Audencia Nantes School of Management	France
70 (64)	University of Strathclyde—Graduate School of Business	UK
71 (74)	Boston University	US
72 (70)	University of Pittsburgh—Joseph M Katz Graduate School of Business	US
73 (91)	Chinese University of Hong Kong	Hong Kong
74 (66)	E.M. Lyon	France
75 (68)	Purdue University—Krannert Graduate School of Management	US
76 (61)	University of Iowa—Henry B Tippie School of Management	US
77 (52)	Leeds University Business School	UK
78 (75)	University of Glasgow—Business School	UK
79 (98)	Newcastle University Business School	UK
80 (86)	Bocconi University—SDA Bocconi School of Management	Italy
81 (72)	Nanyang Business School—Nanyang Technological University	Singapore
82 (77)	International University of Japan—Graduate School of International Management	Japan
83 (67)	University of South Carolina—Moore School of Business	US
84 (89)	University of British Columbia—Sauder School of Business	Canada
85 (81)	Wake Forest University—Babcock Graduate School of Management	US
86 (83)	Southern Methodist University—Cox School of Business	US
87 (69)	University of Illinois at Urbana-Champaign—College of Business	US
88 (82)	University of Rochester—William E Simon Graduate School of Business	US
89 (94)	National University of Singapore—The NUS Business School	Singapore
90 (73)	TiasNimbas Business School	Netherlands
91 (92)	Indian Institute of Management - Ahmedabad	India
92 (85)	University of Georgia—Terry College of Business	US
93 (62)	Nottingham University Business School	UK
94 (80)	Curtin University Graduate School of Business	Australia
95 (95)	Temple University—Fox School of Business	US
96 (100)	Thunderbird—Garvin School of International Management	US
97 (96)	Universiteit Nyenrode—The Netherlands Business School	Netherlands
98 (88)	Sheffield University Management School	UK
99 (93)	Bradford School of Management	UK
100 (n/a)	McGill University - Faculty of Management	Canada

Ratings by category
When surveyed, students consistently tell us that the most important reason they chose to take an MBA was in order to open new career opportunities. Given the emphasis that full-time students put on schools’ careers services it is no surprise to find that this is one of the strong points of most of the top schools in the ranking. It is perhaps the area that receives the most vocal criticism from students when it does not meet their high expectations, but when managed well it can set a school apart. At IMD, for example, 99% of students were in a job within three months of graduating, a fact that no doubt helped the careers service receive a very high rating from students. It was a similar story at IESE and Chicago, both of which score highly in the open new career opportunities category.

One reason that the top-rated schools have impressive careers statistics is that they are well resourced. However, it is also true that the students from the schools with the highest academic standard will automatically draw the attention of the best employers. What sets the top-rated schools apart is that they do not rely merely on their reputation to place students, but couple this with a tireless quest to bring the best employers to the school.

Bringing together the top companies and the brightest students inevitably leads to some impressive salaries. European schools have recently had the upper hand when it comes to the salaries of their graduates. This is partly because their students are generally older with more work experience. However, despite a tough economic climate, many US schools have seen an increase in the salaries of their graduates. Twelve schools now boast average salaries over US$100,000, with Stanford leading North America at US$112,000.

But this is still well behind Europe’s tally of 21 schools. At IMD, for example, graduates can expect to earn a basic salary of US$130,000. Even at some lower-ranking European schools, such as Strathclyde or Audencia, students can expect to out-earn their more prestigious counterparts at Stanford or Harvard.

Top 10 programmes by category
	Open new career opportunities	Personal development and educational experience	Increase salary	Potential to network
1	Chicago	Henley	Ashridge	Henley
2	Indian Institute (Ahmedabad)	Monash	Henley	Thunderbird
3	Hong Kong UST	Curtin	HEC Paris	Vlerick Leuven
4	California at Berkeley	Bath	IESE	New York (Stern)
5	New York (Stern)	Cambridge (Judge)	Warwick	HEC Paris
6	Dartmouth (Tuck)	Hong Kong UST	IMD	IE
7	IE	Melbourne	Oxford (Saïd)	Notre Dame (Mendoza)
8	IESE	INSEAD	Bath	Cambridge (Judge)
9	Virginia (Darden)	Hong Kong University	Hult	EM Lyon
10	IMD	York (Schulich)	London	Northwestern (Kellogg)

European schools also do well in the networking stakes, often because their alumni are more international. IE, for example, has alumni associations in 49 countries. Even relatively young European schools, such as Cambridge, already have an impressive reach across the world. In contrast, many US schools’ alumni are yet to open a single overseas branch.

What the US schools are generally much better at, though, is keeping their alumni active once they have left the programme. In this they are helped to some extent by having graduated more MBAs each year for a longer time, meaning they have a bigger alumni base. But it is still an impressive achievement to keep so many involved. Wharton, for example has over 80,000 active MBA alumni and Stern (New York) has over 50,000.

The ranking’s distinctive features and methodology
Over the past 20 years, the Economist Intelligence Unit has regularly surveyed MBA students about why they take an MBA. Four factors consistently emerge:

• to open new career opportunities and/or further current career;
• personal development and educational experience;
• to increase salary;
• the potential to network.

These factors are the basis for the ranking. The Economist Intelligence Unit ranks full-time MBA programmes on their ability to deliver these elements to students. It weights each element according to the average importance given to it by students surveyed over the past five years.

The Economist Intelligence Unit ranking differs from other rankings in several important areas. It is:

• More student-centric. It measures the way schools meet the demands students have of an MBA programme.
• All-embracing. It is based on detailed questionnaires completed by business schools and around 20,000 current MBA students and graduates around the world. Key numerical data (such as average GMAT scores) are combined with subjective views from students and graduates (such as their assessment of a business school’s faculty).
• Global. It allows direct comparison of MBA programmes around the world.
• Regional. It compares MBA programmes in three regions: North America, Europe, and Asia and Australasia.
• Flexible. Programmes may be ranked in many ways, producing, for example, tables of the top ten US or Asian and Australasian schools by GMAT score or the top ten US and European school by percentage of foreign students. This facility is available at www.which-mba.com.

To qualify for inclusion in the Economist Intelligence Unit rankings, the schools with full-time MBA programmes that responded to our survey had to meet various thresholds of data provision, as well as attaining a minimum number of responses to a survey gauging the opinion of current students and alumni who graduated within the last three years. These were set as a proportion of the annual intake of students to the programme as shown below.

Proportion of responses required from students and recent graduates
Student intake	Minimum responses required
Up to 43	10
44–200	25% of intake
More than 200	50

Data were collected during spring 2008 using two web-based questionnaires, one for business schools and one for students and recent graduates. Schools distributed the web address of the latter questionnaire to their own students and graduates. Around 20,000 students and graduates participated. All data received from schools were subject to verification checks, including, where possible, comparison with historical data, peer schools and other published sources. Student and graduate questionnaires were audited for multiple or false entries.

Memory has been built into the rankings by taking a weighted average of 2008 (50%), 2007 (30%) and 2006 (20%) data to provide a rounded picture of the school. Sudden changes in the situations at a school, which might not produce an immediate increase in MBA quality, are thus reflected gradually, much as the improvement would affect students.

The table below summarises the measures used to calculate the rankings together with their respective weightings. Student and alumni ratings make up 20% of the total ranking and 80% is based on quantitative data provided by schools. The statistical methodology adopted for the ranking gives each business school a unique score (known to statisticians as a z-score). Unlike some other rankings, the Economist Intelligence Unit does not include any “equal” schools (for example, four schools ranked equal sixth followed by one ranked tenth). However, it should be noted that differences between some schools might be very slight.

Summary of ranking criteria and weightingsa
Measure	Indicators	Weighting as percentage of category
A. Open new career opportunities (35%)
1. Diversity of recruiters	Number of industry sectors	25.00
2. Assessment of careers services	Percentage of graduates in jobs three months after graduation	25.00
3. Jobs found through the careers service	Percentage of graduates finding jobs through careers service	25.00
4. Student assessment	Meeting expectations and needs	25.00
B. Personal development/education experience (35%)
1. Faculty quality	Ratio of faculty to studentsb	5.00
	Percentage of faculty with PhD (full-time only)	10.00
	Faculty rating by students	10.00
2. Student quality	Average GMAT score	12.50
	Average length of work experience	12.50
3. Student diversity	Percentage of foreign students	8.33
	Percentage of women studentsc	8.33
	Student rating of culture and classmates	8.33
4. Education experience	Student rating of programme content and range of electives	6.25
	Range of overseas exchange programmes	6.25
	Number of languages on offer	6.25
	Student assessment of facilities and other services	6.25
C. Increase salary (20%)
1. How much did your salary increase after graduating?	Salary change from pre-MBA to post-MBA (excluding bonuses)	25.00
2. Leaving salary	Post-MBA salary (excluding bonuses)	75.00
D Potential to network (10%)
1. Breadth of alumni network	Ratio of registered alumni to current students	33.33
2. Internationalism of alumni	Number of overseas countries with an official alumni branch	33.33
3. Alumni effectiveness	Student assessment of alumni network	33.33
a A minimum threshold of data was required for each category. Weightings for schools meeting the category threshold but not providing all data were distributed evenly within the category.
b Only faculty teaching on the full-time MBA programme were included. Faculty were weighted as follows: full-time 100%; part-time 50%; visiting 25%.
c Variance from 50%

Which MBA?
2008 edition
www.which-mba.com

Editorial queries:
Joanne McKenna +44 (0)20 7576 8188 or joannemckenna@eiu.com
Bill Ridgers: +44 (0)20 7576 8236 williamridgers@eiu.com

About the Economist Intelligence Unit
The Economist Intelligence Unit, the business information arm of The Economist Group, publisher of The Economist, is the world's leading provider of country intelligence, with over 500,000 customers in corporations, banks, universities and government institutions. Our mission is to help companies do better business by providing timely, reliable and impartial analysis on market trends and business strategies.