Should You Trust the Financial Times MBA Rankings?

Choosing the right MBA program is one of the most important decisions in your professional career. Before you start using rankings to make this decision, shouldn’t you learn a little bit about how they work?

The Global MBA 2020 ranking by the Financial Times goes beyond US business schools to compare some 156 MBA programs from all over the world. This broad perspective is welcome, especially by international applicants. Unfortunately, it is this same global focus that poses problems for the objectivity of the ranking, and any applicant looking to the Financial Times for guidance should keep the following observations in mind when consulting the list.

And meanwhile, if you want a stable list of the long-term leaders in MBA education, see our directory of top MBA programs, which doesn’t focus on a ranking formula, but on the factors that make each program valuable to students.

How the Financial Times Creates Their Global MBA Rankings

The Financial Times gathers its data according to the following breakdown:

  • Student Survey – 61%
  • School Data- 29%
  • Research – 10%

From this breakdown, one might conclude that this ranking is mostly based on qualitative data instead of quantitative data, but that is not the case. A large part of the student survey consists of questions about pre- and post-MBA salaries and only a small percentage (9% of the total ranking) is qualitative. This qualitative part consists of three questions:

  • Have the alumni fulfilled their stated goals or reasons for doing an MBA?
  • How effective is the school’s careers service in terms of career counselling, personal development, networking events, internship search and recruitment, as rated by their alumni?
  • From which three schools would the alumni recruit MBA graduates?

The student survey is filled out by graduates three years after they obtained their MBA; the responses from 2020, 2019, and 2018 were used in the most recent ranking. The school data portion of the ranking measures how well the school does on gender equality, how international the school is, and what percentage of the faculty has a doctoral degree.

The Research category is unique to the Financial Times ranking, measuring the number of articles published by faculty-staff in 50 selected academic and practitioner journals, corrected for the size of the faculty. The quality or importance of the publications is not taken into account.

General Observations

Although the qualitative component of the Financial Times ranking makes up only a small portion of the overall score and does not exert too strong of an influence on the final result, it is still worth noting that the results of any student survey will always be arbitrary.

Consider this: when asking students to rank their school, they will have nothing to compare their school against. After all, they are not attending multiple programs at once! And not only are they unable to grade their program relative to another, but their feedback is also relative to their expectations. A student at a top 5 school, for example, expects an amazing experience based on the prestige of the program. If their experience turns out to be “great” instead of amazing, the student might give their school a lower score than someone who expects a “good” experience but receives a great one.

The student survey is also complicated by the fact that the group of respondents is very diverse. The final rankings contain many non-US schools, meaning that the survey is filled out by graduates from schools in Europe, Asia, and Australia. Imagine the response when the Financial Times asks a graduate from the Melbourne School of Business to rank their top three business schools and the schools from which they would recruit: isn’t that alumnus going to name their own school and two other Australian business schools, rather than taking the objective, global perspective?

Financial Times MBA Rankings, 2020
1.Harvard
2.Wharton
3.Stanford
4.INSEAD
5.Ceibs
6.MIT Sloan
7.LBS
8.Columbia
9.HEC Paris
10.Booth
11.Kellogg
12.Haas
13.IESE
14.Yale
15.NU Singapore
16.Tuck
17.Fuqua
18.Darden
19.Cambridge
20.HKUST
21.Oxford
22.Stern
23.Cornell
24.Esade
25.IMD
25.UCLA

In terms of quantitative data, the Financial Times treats various metrics differently than other ranking bodies. Instead of focusing on GMAT scores and GPAs, the Financial Times looks at diversity, both in gender and in nationality. It’s a fresh approach, and rewarding the international character of a school might make this ranking interesting for some. But in general, it will favor non-US schools, as they tend to have a more diverse student- and faculty-set–especially the European schools.

Non-US schools are favored in a more significant way by how the Financial Times factors compensation into their ranking. The Financial Times corrects the average salary of the alumni using the US$ purchasing power parity (PPP) equivalent. Schools that have a high number of alumni in lower income countries (typically non-US schools) are therefore disproportionally favored.

All in all then, it isn’t a surprise that INSEAD ranks fourth on the full Financial Times Global MBA 2020 ranking, where it does not achieve this feat on any other list.

Financial Times vs. The Economist

When consulting rankings, the potential MBA applicant may be struck by the dramatic differences between each list. How can a school rise and fall so markedly across rankings that are presumably measuring the same thing?

By analyzing specific entries from different rankings, we see how these lists do not measure the same thing at all: wildly inconsistent methodologies lead to wildly inconsistent results. We also begin to see how, for each ranking, the arbitrary decision to highlight one aspect of the MBA experience will favor certain programs and penalize others.

The Financial Times is not the only internationally focused list; every year, The Economist also releases a list of the top 100 international business schools. The two are often read against each other. A full analysis of the methodology used by The Economist can be found on The Economist MBA ranking page. In summary, the methodologies do not differ much, except that the research category found in the Financial Times ranking is not a component of The Economist ranking.

This difference in approach has led to some very interesting discrepancies with the Financial Times listing:

Financial Times rankingThe Economist ranking
MIT4th16th
UCLA15th5th
Ross16th8th
McDonough17th34th
Foster27th17th
**Note: Rankings adjusted to compare only US schools

These differences in ranking can mostly be attributed to the strange and secretive methodology of The Economist, rather than to significant differences between these two rankings. MIT is ranked quite high by the Financial Times, especially when compared to other rankings, but at 16th place in The Economist is absurd.

Financial Times MBA Rankings: Key Takeaways

While it is a laudable goal to publish a list of international business schools, giving all programs an equal opportunity to compete for top positions, the reality is that the Financial Times favors non-US programs through an unfair and out-of-context salary metric. For this reason, we do not feel that all entries in the “top 25” have truly earned their position. However, for reasons touched on here and in The Economist MBA rankings analysis page, we recommend that any applicant interested solely in diversity or in the international quality of a school consults the Financial Times ranking over that of The Economist.

So How Can You Find the Best MBA Program (Without Rankings)?

Once you determine roughly which schools you are qualified to attend–and the rankings can definitely factor into this initial list–we encourage you to leave the rankings behind and instead focus on the practical questions that will help you figure out which MBA program will provide value to your career. These are simple, practical questions:

Answering these questions will help you find an MBA program that can enhance your career.