Posts Tagged ‘admissions’

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.

MBA Starting Salary

Attending a highly ranked business school does not guarantee a high starting salary.  There is a relationship between a schools’ average salary and its position in the popular rankings (US News, BusinessWeek); however, a schools average salary is not a good predictor of an individual’s expected salary.  Take Wharton for example.  The employment webpage reports that starting salaries for 2007 MBA graduates averaged $110K with a range of $28K to $392K.  Someone expecting to earn the $110K average at Wharton would probably be a little disappointed with $28K.

Now don’t throw the baby out with the bath water.  In the right context, salary data can be useful in selecting a business school.  To help build this context, you may want to consider the following elements when analyzing salary data:

Compare salaries at the industry level – average salaries vary across industries and the mix of industry placement varies by school.  Consider a student interested in investment banking who is deciding between Darden and Harvard.  At first glance, the average overall salary at Darden is $100K (data) compared with $115K at Harvard (data), indicating that the student may prefer Harvard.  However, the average salary for investment banking jobs is the same for both schools: Darden – $95K, Harvard – $95K.  One contributor to the difference in overall salaries is the larger portion of students who enter into investment banking at Darden than at Harvard (15% vs. 11%), which effectively lowers Darden’s average overall salary.  Therefore, salaries should always be compared at the industry level to factor out the effect of dissimilar industry mixes between schools.

Account for geographic trends – in much the same way that a student body’s industry mix will affect average salary, the geographic mix of jobs will impact a schools average salary.  For example, international jobs tend to have a lower salary and can pull down the overall average.  While probably not a major factor, looking at where students accept jobs will provide a better understanding of the schools’ salary data.

Consider student demographics – a student’s work experience can significantly influence their starting salary.  For example, someone who worked in consulting for 5 years before returning to business school will probably secure a higher starting salary than someone with 3 years experience in an unrelated industry.  Business school can help equalize differences in past experience; however, employers will still offer higher salaries to candidates with more relevant experience.  Thus, attempts should be made to identify the impact of a student body’s work experience on the schools’ average salary.  In light of the qualitative nature of work experience, reviewing a school’s class profile and thinking in terms of directional influences might be the most practical approach.

In consideration of these factors, it seems that marginal differences between businesses schools in average starting salaries (less than $10K) could be fully attributed to differences in student body demographics.  Perhaps a research study could attempt to isolate and quantify the impact of ‘MBA brand value’ on starting salary.  In the meantime, we seem to have overemphasized the importance of business school selection in determining an individual’s starting salary.

Invitation-Only Interviews

Several prospective students have asked me why Darden switched to an invitation-only interview policy.  Since I was also curious, I began asking faculty members and admissions staff what drove the decision. Given the complexity of the admissions process it was no surprise that a wide range of factors came into play.  Some of the considerations I have heard include:

Increasing number of applicants – Last year the number of applicants increased by 35% and the prior year saw an increase of 14%.  Meeting the increased demand for interviews without sacrificing quality in the interview process presented a challenge.  By switching to an invitation-only format the admissions office can limit the number of interviews and therefore ensure that the interview quality and consistency remains high.

Increasing cost and environmental impact of travel – Before Darden switched to invitation-only interviews every domestic applicant was required to visit Charlottesville for an interview.  With rising airline fares and a better understanding of how travel impacts global warming, it is in everyone’s interest to reduce the travel requirements of the application process.   The new policy has addressed these concerns as only individuals with the necessary credentials and essays are required to visit Charlottesville.

Alignment of the US and international application process – Since Darden already used an invitation-only policy for international applications, applying the same policy to domestic applications provides for a more consistent and uniform evaluation of all applicants.

While understanding the factors that went into this decision may be interesting, the impact of the policy on prospective students is a little less complicated.  With the new policy applicants only need to visit Charlottesville after the admissions office has determined their credentials and essays meet the requirements for admissions.  This policy offers a huge benefit for students who are unsure of their admissibility, as they can now apply without visiting the school and then travel to Charlottesville if the admissions officers determine their credentials and essays meet the requirements.  On the other hand, I personally found it helpful to visit Darden before writing my essays.

With regards to the acceptance ratio of candidates that are invited to interview, there doesn’t seem to be a hard number available at this point.  By using a little inference, it is logical that only applicants with the potential to be admitted would be invited to interview.  From another angle, inviting applicants to interview who lack the credentials and essays required for admission defeats the whole purpose of invitation-only interviews.  I checked with Darden’s admissions staff on this point last week and they confirmed that every applicant invited to interview has the potential to be accepted.