Do Business School Rankings Matter?

Quick, give me the name of the best hospital in the country. Now write that name on a piece of paper. If you have done that, let me ask you about the factors you have used in coming up with that name. You may have gone by your brand perceptions of the hospitals and may have been influenced by very positive or very negative experiences you may have personally had (even if that makes it a statistically insignificant number) with that hospital or a doctor. You may have been influenced by opinions that people may have shared with you. You may have been biased by the “recency effect” – the most recent horror story that someone shared with you last evening is going to affect your choice. That is how decisions are made by real people in real life.The Paradox of ChoiceFor some strange reason we think that to decide on B School rankings, we need objective criteria and some numerical values to create spreadsheets. Can you decide better if you have data? That is highly unlikely. This time I will give you data about different B Schools. You have numerical scores about five factors: the learning experience, the living experience, the brand value, the return on investment and a strange factor called future orientation. The factor called learning experience is further broken down into five factors called: pedagogy, internship, quality of faculty, innovative teaching method and “resource on learning”. Populate the table for each of them and you have a spreadsheet that only a super computer can understand. So having these spreadsheets does not help you make a better more informed choice.Psychologist Barry Schwartz has come up with what he calls the “paradox of choice”. Too much of choice produces paralysis, rather than liberation. With so many options to choose from, people find it very difficult to choose at all. Even if we manage to overcome the paralysis and make a choice, we end up less satisfied with the result of the choice than we would be if we had fewer options to choose from.Lists Don’t Make Decisions – So Why Make ThemEvery now and then, listings of B-schools are released in the country. Every survey has widely contradictory rankings of the same B-school ranging from the fifth rank in one survey to seventh, 13th and 15th rank in other surveys. This does not help either the MBA aspirants or the managers. The B-schools will use whichever ranking to their advantage and plaster it all over the media. The schools and their alumni will hotly contest the rankings where they show up lower than their rivals. I have never seen a B-school question the rankings where they show up more favorably than what they deserve.Every survey has widely contradictory rankings of the same B School ranging from the 5^th rank in one survey to 7^th, 13^th and 15^th rank in other surveys.The B Schools will use whichever ranking is to their advantage and plaster it all over the media. The Schools and their alumni will hotly contest the rankings where they show up lower than their rivals. I have never seen a B School question the rankings where they show up more favorably than what they deserve.Is this list mania just an obsession in India? Not at all.Businessweek magazine has drawn up rankings (http://www.businessweek.com/bschools/rankings) for B Schools in USA. They have ranked the top ten “Schools for Geniuses” and another list of “Good Schools If You Didn’t Ace the GMAT”. Then there is a list of “Best Schools in the East Coast” and yes, you guessed it, ten more listed for the West Coast. They list the favorite B Schools of firms like BCG, Goldman Sachs, Bain and McKinsey. They have a list of “Schools That Produce the Highest-Paid Investment Bankers”. They even have a list of “Schools for People Who Like to Sleep in Class”.The lists don’t help the students at all. Everyone writes the admission tests that are accepted by the largest number of schools. That limits which schools they will get admission to. People need to make decisions based on the schools they have got admission to. The lists that the publications draw up are not useful after someone has the firm admission letter in hand anyway.Placements Matter – That’s AllImagine that the school that has offered you admission shows up poorly in one publication’s ranking and favorably in another. You simply choose to flaunt the ranking that is more favorable. That is what your B School is doing anyway.The majority of the people who go to a B School go there to get a jump start in their career. The only criteria that students care about, is how much better off they are after an MBA than what they were before. Imagine you have studied in the most aspirational B School and happen to be the only student who did not get a job offer. Would you console yourself saying that since everyone else in the class got high paying jobs, you at least got the same high quality education, the campus life, the interaction with the professors that the others classmates had? You won’t.In a sluggish business environment, the best of B Schools have students who do not get job offers. At the time of going to press 15% of students from IIM were left without job offers. That is a real tragedy. So the student is left to his or her network to find a job. This process is heavily tilted in favor of the elite and leaves everyone else at a disadvantage. Yet, when the students do manage to get a job with their own effort, they will mysteriously get added to the list of students who have been “successfully placed”. This is one list that we need to see – percentage of students who had to use their network to get placed. That is also one list you will never see.The penultimate yardstick of the MBA program is the placement. The more choices for placement options the school offers, the more attractive it is to the students. You don’t need any lists and rankings to know that.———————Written for my column in People Matters magazine May 2013Join me on Twitter @abhijitbhaduri