This is the seventh FT MBA ranking. As in previous years the number of alumni respondents remains high – this year 7,900, 35 per cent of eligible alumni.
The initial stage was to contact 147 business schools that fulfilled entry requirements for the ranking. Of these, 127 were ranked and 20 excluded because too few alumni completed the questionnaire. For valid data analysis, a minimum of 20 per cent of the class is required to respond. If schools have fewer than 100 alumni, then at least 20 have to complete the questionnaire.
Data was compiled from two main sources – from the business schools and their alumni who graduated three years ago. Therefore, data from two respective sets of questionnaires were collated.
The data obtained and criteria used in these rankings give an overview of three main areas:
● The alumni’s career development and purchasing power.
● The diversity of the school and its programme.
● Each school’s research capabilities.
Of the 20 criteria used to determine the rankings, the first eight, from “Weighted salary (US$)” to “Alumni recommend rank,” are based on responses by course participants and relate to the first of the three main areas mentioned above. These eight criteria carry 55 per cent of the weighting, of which the salary data counts for the largest proportion.
The salary data and weighted salary figures are standardised by conversion to US dollars using Purchasing Power Parity (PPP) rates estimated by the World Bank. PPP rates reflect the cost of standard goods in each country.
By applying PPP rates to the alumni salaries, one can measure respondents’ purchasing power and the standard of living enjoyed. Extraordinarily high salaries are omitted before calculating the averages, as well as salary data from alumni working in the non-profit sector and from students.
Salaries from each school are then weighted to reflect the variation in salaries between different sectors. The weights are derived by calculating the breakdown of sectors in which the alumni are working today.
It is assumed that for the most recent sample each school has 29 per cent of alumni employed in finance/banking; 14 per cent in consultancy; 12 per cent in the industrial sector; 11 per cent in IT/telecommunications: and so on – a reflection of the response from alumni.
Final figures also incorporate, where available, salaries from the previous two surveys.
The second main area on which the ranking focuses is the business schools themselves. The nine fields, from “Women Faculty (%)” to “Languages,” are based on the business schools’ survey and measure the diversity of their students, faculty and board members.
The third component of the table, represented by the final three fields, measures the schools’ performance in research and accounts for 20 per cent of the weighting.
Once the relevant data has been compiled from the questionnaires, data points within each field are converted to z-scores. Z-scores take into account the differences between each business school and the spread of scores between the top and bottom school in a single criterion, thus accurately positioning a school relative to all the others in the ranking list. The last task in the chain of processes needed to arrive at the final ranking involves weighting each category in the table.
The questions on the questionnaires have remained the same as previous years. However, on the table, the presentation of the “Aims Achieved” field has been changed this year, from a rank to a percentage, due to the fact that there is a very narrow margin between the highest percentage score and the lowest. It seems that this year, most alumni achieved most of their goals and were happy with their MBAs and their schools.
Key to the tables
Alumni Survey (weights in brackets)
Salary Today: An average of salaries – three years after graduation – from the 2003, 2004 and 2005 surveys. The figure is in US dollars and is NOT used in the ranking.
Weighted Salary (20): The average ‘salary today’ with adjustment for salary variations between industry sectors. A weighted average of salaries three years after graduation from the 2003, 2004 and 2005 surveys and in US dollars.
Salary percentage increase (20): The percentage increase in salary from the beginning of the MBA to three years after graduation. A weighted average of the increases from the 2003, 2004 and 2005 surveys.
Value for money (3): The value for money criterion is a short-term indicator calculated using the salary earned by alumni three years after graduation and course costs, including the opportunity cost of not working for the duration of the course.
Career progress (3): The degree to which alumni have moved up the career ladder three years after graduating. Progression is measured through changes in level of seniority and the size of company in which they are employed.
Aims achieved (3): The extent to which alumni fulfilled their goals or reasons for doing an MBA. This is measured as a percentage of total returns for a school.
Placement success (2): The percentage of 2001 alumni that gained employment with the help of career advice. The data is presented as a rank.
Alumni recommendation (2): Alumni of 2001 were asked to name three business schools from which they would recruit MBA graduates. The data is presented as a rank.
Employed at three months (2): Percentage of the most recent graduating class that had employment within three months.
Business School Survey (weights in brackets)
Women faculty (2): Percentage of female faculty.
Women students (2): Percentage of female students.
Women board (1): Females on the advisory board, percentage.
International faculty (4): Percentage of faculty whose nationality differs from country of employment.
International students (4): Percentage of international students.
International board (2): Percentage of board whose nationality differs from country of employment.
International mobility (6): Rating that measures the degree of international mobility based on employment movements of alumni between graduation and today.
International experience (2): Weighted average of three criteria that measure international exposure during the course.
Languages (2): Number of additional languages required on completion of the MBA. Where a proportion of students required another language due to an additional diploma or degree chosen that figure is included in the calculations but not presented in the final table.
Faculty with doctorates (5): Percentage of faculty with a doctoral degree.
FT Doctoral rating (5): Number of doctoral graduates from the last three academic years with additional weighting for those graduates taking up a faculty position at one of the top 50 schools in MBA 2004.
Research Survey (weights in brackets)
FT Research rating (10): A rating of faculty publications in 40 international academic and practitioner journals. Points are accrued by the business school at which the author is presently employed. Adjustment is made for faculty size.