Archive for November, 2008

MBA Rankings Management

The level of rankings management varies dramatically across business schools.  Since improving a schools rank and quality of education are not 100% aligned, each dean must balance these objectives and set an agenda for the organization.  My thinking is that deans who move up through the academic community are probably more biased towards quality of education than deans who are recruited from industry (e.g., previous CEOs).  There is no clear answer on which philosophy is better for students in the long run, and the best practice is likely some combination of the two philosophies.  For now, I’ll hold off on discussing the pros and cons of rankings management and instead use this post to share some of the practices I have observed at schools focused on rankings.

First, in most instances a school can improve its rank and quality of education with the same action.  Take the IT department as an example.  By providing students with excellent service, the students will provide favorable feedback on the BusinessWeek survey which will in turn improve the school’s rank.  The tough decisions come about when an effort to improve a school’s rank has negative consequences on the school’s quality of education.  Below is a list of such practices that I have observed at different business schools.  To the best of my knowledge, most of these methods are not being aggressively pursued at Darden.

Increase marketing – this is an easy way to improve a school’s selectivity metric, which is a key component for several rankings.  With an effective marketing effort many schools are able to increase the number of applicants.  One school has had recent success with a targeted marketing campaign in India.  My understanding is that the school received significantly more applications from the country yet still accepted the same number of applicants – thus improving selectivity.  The downside of this approach is that by spending more money on marketing there is less money available for other uses.

Increase scholarship money – offering scholarships is an effective way to increase yield.  In addition to the direct rankings improvement from a higher yield, there is a secondary effect from the increase in selectively necessary to maintain a specific class size.  Spending more money on scholarships is one way to increase yield.  Another consideration is how to distribute scholarships.  One top ranked business school provides around 90% of accepted students with a small scholarship of around $5k to $10k.  This is well received by applicants and gives them an additional reason to attend the school.  Another top 25 school has been known to bid for students by increasing the value of scholarship offers as the decision deadline approaches.

Increase focus on research – well published research faculty can significantly improve a schools ranking.  Unfortunately, excellent teaching ability and excellent research ability don’t often go together, and there are very few professors with both skills.  Thus, schools with a strong emphasis on research sometimes suffer in teaching quality.  Some schools relieve their best researchers of the teaching ‘burden’ by providing teaching assistants for use both inside and outside the classroom.

Train students to answer surveys – all rankings use surveys and in some cases they survey current students and recent alumni.  It’s generally against the rules for schools to directly advise students on how to complete these surveys.  However, schools can influence the surveys by helping student groups ‘teach’ other students how to best respond to questions.

Modify class demographics – most rankings consider elements of the class demographics and these elements can be easily altered by admissions.  Some approaches that come to mind include 1) increasing average GMAT, 2) increasing international diversity, and 3) increasing share of students interested in consulting.  While these measures are easy to change, there is often a subsequent negative effect from each initial improvement.  For example, a school might reject a ‘well rounded’ applicant in order to accept an applicant with a higher GMAT score.  This decision may come back to haunt the school if the high GMAT student has trouble finding employment and thus negatively affects the placement statistics at gradation.  Increasing the share of students interested in consulting is an interesting opportunity because this is one of the highest salary industries (bankers have lower salaries and higher bonuses) and the rankings do not adjust for differences in industry preferences between schools.  (I’ve written more on this topic in my MBA starting salary post.)

Schools that focus on rankings management may use these and other techniques to improve the school’s position.  One area worth consideration is how each of these techniques aligns with ones’ goals for an MBA program.  There may be vastly different consequences for someone interested in a top ranked MBA degree compared to someone interested in the quality of their education.

Fall Colors

Charlottesville’s fall colors are exceptionally vibrant this year.  Kristy and I hiked up Old Rag (trail details) with another Darden couple two weekends ago and captured the following photos.

Old Rag is a 10 mile circuit hike located about 30 miles northwest of Charlottesville.  We left for the hike at 9:30am and arrived just in time to grab the last parking space at the trail head.  Apparently we weren’t the only people thinking this was a good weekend to enjoy the colors.  It took us about three hours to hike the four miles leading up to the summit and another two hours to hike the six miles back to our car.  The summit approach was fairly slow going  as the last mile is a rock scramble and we frequently had to wait for other people at points where hand-over-hand climbing was required.

Our weather was perfect and the hike provided some much needed exercise.  We all returned to Charlottesville physically tired and mentally refreshed.