In 2023, the Financial Times adapted its methodology to represent the evolving business education landscape better, leading to significant changes in the ranking of MBA programs. Leo Cremonezi, Rankings Manager at the FT, discusses the recent changes and their impact on prospective students and business schools.
In February 2023, the Financial Times released its 25th annual Global MBA ranking. There were major changes in the MBA rankings from the previous year. On the one hand, this is because more MBA programs qualify to be ranked as time goes on. But on the other hand, FT made significant changes to its ranking methodology, emphasizing diversity and social impact.
As Leo Cremonezi, Rankings manager at the Financial Times, explained, “The business education industry is changing, and the rankings should reflect these changes.” (01:26)
Checking an MBA program’s rankings is often the first step prospective students take in deciding where to apply. It’s a fact that’s well known to business schools and ranking institutions.
The motivation is clear for business schools to invest in the aspects of their programs that raise their place in the ranking. That puts tremendous responsibility on the ranking institution to ensure they measure the qualities necessary for quality business education.
In the 2002 article “Being Good Versus Looking Good” by Dennis A. Gioia and Kevin G. Corley, the authors argue that there is a detrimental effect of business school rankings. As a result of the increasing importance of business school rankings, institutions shift their focus from providing a quality education that emphasizes substance to emphasizing their image and perception in the eyes of stakeholders.
The rankings, the authors claim, have become the driving force behind many decisions made by business schools, leading to a “Circean transformation” – a reference to the enchantress Circe from Greek mythology who transformed humans into animals.
The focus on salaries, for instance, has come at the expense of other outcomes of graduate education. Of course, the focus on salaries is understandable, given the high tuition fee, students want guidance on the return on their investment.
The concerns raised 20 years ago are still relevant today, as the influence of rankings on business schools continues to grow. The Financial Times acknowledged this when it began the years-long process of updating its ranking methodology. The result was to incorporate more diverse and holistic criteria that capture the experience of getting the degree and the impact on wider society.
Measuring the societal impact of business schools is a complex task due to the challenge of quantifying the added value of education.
Accreditation bodies like the Association to Advance Collegiate Schools of Business (AACSB), the EFMD Quality Improvement System (EQUIS), and the Association of MBAs (AMBA) emphasized the importance of societal impact in their most recent criteria. However, they evaluate schools individually instead of the standard system employed by ranking institutions.
Some approaches, like The Higher Education Impact Rankings, hold universities accountable across the UN’s Sustainable Development Goals (SDGs). In this regard, the MBA ranking has been updated to emphasize diversity, sustainability, and ESG factors. (01:43)
The explicit ESG factor, ESG and net zero teaching rank, measures the proportion of hours in an MBA program dedicated to teaching ESG and solutions for net-zero organizations.
A new factor in the methodology is the Carbon footprint rank at 4%. It is calculated using the school’s target year for being net-zero and if the school has a publicly available carbon emissions audit.
Chief among the changes was reducing the weight for salary and salary increase from 40% to 32%. In addition to freeing up space, this will benefit schools in countries where extreme MBA salaries are uncommon.
The importance of the international dimensions was also adjusted from a total of 19% to 15%. This reflects that while the world is internationalizing, being someplace physically is less critical. To balance the benefits of travel with the environmental costs, they’ve also changed what counts for International course experience.
“The average length of a full-time MBA program is two years,” Leo says, “to align it with the importance we are giving to ESG, we believe that foreign study visits and placements should last at least a month to be considered in the ranking.” (02:04)
The MBA ranking changes take advantage of schools paying attention to the rankings to push them to be more responsible and sustainable. The FT isn’t pushing an agenda as much as it’s listening to the new generation of students entering MBA programs. (05:47)
Program rankings are a tool for students to make the best decision for their education. Rankings must adapt themselves to continue to be the right tool for the job.
The Financial Times has tried maintaining consistency and transparency in its ranking methodologies while adapting to changing demands. The FT will adapt the methodologies for its other rankings based on the reception of the changes to the MBA ranking.
For example, Masters in Management programs are often only one year, so requiring month-long study trips would be burdensome.
As the FT continues to refine its ranking methodology, Leo encourages feedback from students and schools to improve the process. Everyone is welcome to message business.eudation@ft.com with their feedback. (12:47)
While it’s impossible to please everyone, he is confident the rankings will continue to reflect the evolving priorities of business education.
