New Feature Brings More Transparency to MBA Rankings

Posted by: Louis Lavelle on December 2, 2010

Over the years, Bloomberg Businessweek has been criticized for a lack of transparency concerning our ranking methodology. So in an effort to be responsive to those complaints, we recently made a change to the interactive tables we published on Nov. 11, as part of our ranking of full-time MBA programs.

The changes are in both the U.S. table and the International table. If you click on the links you’ll notice a new column of data, labeled “Index Number.” The index number represents the sum total of all the factors used to calculate the final ranking. To make it easier to understand, we’ve standardized this number, which means that the No. 1 school will always have an index number of 100 and all lower-ranked schools will have a proportionally lower index number.

The value of the index number is that it allows you to see how far apart schools are in the ranking. For example, Harvard (95.6) is a rather distant second to Chicago Booth (100) and Stanford (87.4) has a long way to go to catch up to Kellogg (92.5) But the differences between Haas (84.9) and Columbia (84.5) are negligible.

For many years, business schools have said the differences between schools are so small that a ranking of the sort that Bloomberg Businessweek and other media outlets do is misleading. They say a rating—which awards the same grade to an entire group of schools sharing more or less the same degree of excellence—would make more sense.

But the index numbers show just how difficult that would be. The minute you start drawing arbitrary lines between A and B, or between excellent and good, you run the risk of exaggerating the differences between programs even more than a ranking does. Consider Darden. Right now it’s ranked No. 11, and it’s all but indistinguishable from No. 10 Sloan in terms of their index numbers. If “excellent” is defined as the schools with the 10 highest index numbers then suddenly Sloan is “excellent” and Darden merely “good.” That doesn’t seem fair to Darden.

That’s why Bloomberg Businessweek believes the combination of a numerical ranking and complete transparency in the form of an index number is the best solution. What does everyone think?

Reader Comments

Frederick Alfredo

December 4, 2010 9:25 AM

Hmm. It doesn't hurt. But since it is standardized, you can't observe when all schools perform poorly because of a common problem (e.g. macroeconomy)

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