League tables for MBA programs have grown in popularity over recent years. However, as Melinda Finch writes, some findings need to be taken with a grain of salt
League tables for MBA programs have grown in popularity over recent years. However, as Melinda Finch writes, some findings need to be taken with a grain of salt
League tables for MBA programs are a popular and persuasive method of comparing business schools and courses. Of the international rankings undertaken every year the US Forbes MBA survey and the UK Financial Times global MBA survey are regarded as the most authoritative.
These measure aspects, such as aims achieved (the extent to which alumni fulfilled their goals or reasons for doing an MBA), career progress rank (the degree to which alumni have moved up the career ladder three years after graduating), employment after three months and international mobility.
Some, such as the Forbes survey, measure the financial return on investment (ROI). Forbes typically surveys graduates from 85 schools in North America, Europe, Asia and Australia. Factors such as five-year salary gain, tuition fees and foregone salary are considered in calculating ROI.
The Financial Times global MBA ranking calculates the percentage salary increase (calculated from the beginning of the MBA to three years after graduation) and value for money (a short-term indicator calculated using the salary earned by alumni three years after graduation and course costs).
In both the Forbes and the Financial Times surveys, the top positions are heavily dominated by American business schools such as Harvard, Columbia, University of Pennsylvania and Stanford. UK and European schools such as The London Business School, Insead in France and Iese Business School in Spain trail in their wake.
Australia’s top programs, offered by Melbourne Business School and Australian Graduate School of Management (AGSM), perform fairly consistently in the rankings appearing in the middle to lower part of the group.
However, criticism of league tables centres around the fact that they try to compare apples and oranges. League tables also try to quantify the unquantifiable, such as alumni recommendations or staff quality. Other factors such as resources, student to staff ratios, salaries and value for money are easier to calculate but still require subjective analysis.
As one of the premier business schools in Australasia the AGSM has performed well in the international rankings over the years. Yet some don’t see survey results as the ultimate indicators of what an MBA program has to offer.
“I’m a bit cautious about league tables for a few reasons,” says Roger Collins, professor of management, AGSM. “Although we refer to the Financial Times UK and The Forbes rankings, they don’t always measure the right things. The Forbes MBA survey for example, emphasises salary on graduation. This isn’t necessarily the best indicator of long-term manager and leadership potential.”
“Graduate salaries are not the best indicator of what is the best experience for a young MBA graduate,” he says. Upon graduation, finding a great mentor to work for over a few years can help with salary scope in the longer term, he adds.
Research and other knowledge-based criteria that really matter, such as the quality and relevance of what students learn, are often not assessed properly in these tables.
“Some of the other evaluations such as The Good Universities Guide focus less on research, and research is what gives you the leading edge,” Collins says. “New knowledge gives a competitive advantage so you must evaluate any business school in research terms: whether it creates and teaches new knowledge.”
These rankings can sometimes distort what business schools do, and they can force deans to make “short-term decisions to get into the rankings in the first place, yet long-term decisions are more important to the ultimate success of a business school,”Collins says. “The real issue is perhaps less the credential per se, and more about what has that business school done to keep you up-to-date and keep you employable since you graduated?”
Can an MBA boost HR’s reputation?
When considering an MBA it’s important to ask how effective and relevant it is to what you want out of your career. Certain employers regard them very highly whereas others will see short-term, specific business study as more beneficial to their organisation.
Linda Price, director of organisation development for Fairfax, regards MBAs very highly for a number of reasons. “Firstly, an MBA from a university with a solid reputation for delivering a quality program certainly assists an HR professional to hone their business skills – especially with regard to increased understanding of a commercial environment,” she says. “For people who already have quite well developed skills and lots of experience, the MBA provides a set a frameworks to order and better operationalise their knowledge.
“Secondly, especially when recruiting an HR professional, having an MBA sends a message. It says that this person is managing their career and that they are prepared to invest time, money and energy to their personal development. Lastly, and very importantly it demonstrates a level of persistence. To hold down a day job – and perhaps have a partner and children – and to stick with the sometimes gruelling aspects of gaining this qualification shows a dedication that I value.”
MBA’s aren’t necessary, but they can be important for an ambitious HR professional. “An MBA is by no means mandatory but they are certainly a good idea …And they are increasingly important when recruiting staff,” Price says. “When all other things appear equal, it would be the candidate with the MBA that would present as the better candidate.”
Fairfax provides financial support for staff wishing to undertake an MBA via the company’s Study Assistance Policy and appropriate levels of study leave. “There are also instances of special support being provided to candidates under our succession management strategies. However, we do not advocate MBAs to the exclusion of driving undergraduate qualifications for those who do not have them,” Price says.
Like Price, Kelvin Milroy, general manager of HR for CSL, has an MBA which he completed at Charles Sturt University via distance learning. Since finishing the course, the nature of his role has changed due to growth of business.
“The main reason for any HR person to do an MBA is that they have to be part of the business and that means understanding what the drivers of the business are,” he says.
In terms of putting theory into practice, Milroy says, “some of what you learn in an MBA program comes into play straight away, such as the ability to understand a balance sheet, accounting terms and other financial statistics. Some other skills are implemented in various situations over time.”
An MBA is also not the be all and end all and should set you up for future professional development. “An MBA is a very general degree, and it only really touches the surface of the subjects it engages you in … HR professionals need to pursue further study for some aspects.
“For HR people looking to get ahead, I’d recommend getting good experience, understanding your business and getting involved in things outside the HR function,”Milroy says.
