Read an Excerpt
By Ronald J. Alsop
Most people return to business school for an M.B.A. degree for one simple reason -- to increase their marketability in a highly competitive business environment. How well they achieve their goal depends in large measure on how the business world views the schools they attend.
Now, for the first time ever, The Wall Street Journal, the world's most respected business publication, and Harris Interactive, the developer of the well-known Harris public-opinion poll, tell you exactly what 1,600 corporate recruiters think and say about the M.B.A. programs they know intimately. In this groundbreaking volume, you will discover how recruiters rated 50 U.S. and international M.B.A. programs, as well as read some of their observations about 35 more business schools. Brief profiles of an additional 70 schools are also included.
The Wall Street Journal/Harris Interactive study of M.B.A. programs is the only major survey that focuses exclusively on the opinions of recruiters -- the buyers of M.B.A. talent -- and as a result, our rankings look quite different from those in other business-school guides.
This e-book is aimed at a number of audiences: prospective and current students, M.B.A. alumni, business school deans, professors, admissions directors and career-services directors -- and not least of all, recruiters themselves.
There is no doubt that applicants to M.B.A. programs pay close attention to business-school rankings. The Graduate Management Admission Council (GMAC) found that "formal rankings by a major publication" are the No. 2 reason for choosing a specific M.B.A. program. The top factor is the school's reputation, and that is partly shaped by the various rankings.
Students especially value information on how the business world views M.B.A. programs. "About 98% of our students are here to make a career change," says Glenn Sykes, director of M.B.A. Career Services at the University of Chicago's Graduate School of Business. "So what recruiters think is highly important to them."
Recruiters, facing constant competition for the best M.B.A. candidates, will find this study useful in identifying schools they might want to add to their list of "suppliers." For example, they may find some surprises in the list of "hidden gems" -- lower-profile schools that sparkle for some recruiters. "It's great to have inside information about business schools because it's a big risk trying a new school we've never visited before," says Gretchen Garstka, manager of college relations at Johnson & Johnson. "We invest so much time and money at each school that we need to get results."
Finally, The Wall Street Journal/Harris Interactive survey will give business-school deans, admissions directors and career-services officers valuable insights about the strengths and shortcomings of their M.B.A. programs and their graduates. Each school was rated on 27 variables that drive a recruiter to select a particular school and hire a particular graduate. Among the attributes: a company's long-term success with a school's M.B.A. graduates, students' communication and interpersonal skills, their analytical and problem-solving abilities and their leadership potential. In addition to the recruiters' perceptions of the schools on such attributes, a school's final score and ranking also took into account its "mass appeal," based on the number of recruiters who rated it.
All of the schools in our study offer quality M.B.A. programs. What the rankings show are which schools enjoy the best relationships with recruiters. A business school may turn out superb managers, but many of its graduates may not appeal to certain recruiters because they lack a teamwork orientation, for instance, or they are weak on communication and interpersonal skills.
The rankings also don't necessarily reflect how recruiters view the school's academic performance. Indeed, the survey respondents said faculty and curriculum aren't among the most important factors in their assessments of where to recruit.
Our study, however, does include a measure of academic reputation. Separate from their ratings of individual M.B.A. programs, recruiters named business schools that they believe excel in certain academic concentrations or are especially good sources for hiring minorities, women and students with a strong international perspective.
We expect this study to significantly affect many of the ranked programs. Other M.B.A. studies have proven highly influential in driving applicants and recruiters to particular schools. Schools hire public-relations firms to polish their images and secure better rankings. Students have tried to influence classmates to give their M.B.A. program high marks. Even business-school officials' job security may depend on the results of such studies. Although business-school ratings -- including this one -- are based on people's perceptions and are meant to be only a guide, career-services directors have actually been fired over disappointing rankings.
"Achieving a good ranking is the most powerful thing that can happen to a school," says Cynthia Shore, the assistant dean at the University at Buffalo and the former president of the M.B.A. Career Services Council. A high rating allows a school to be more selective in whom it admits because it attracts more applicants; more recruiters visit the school; it's easier to hire distinguished professors; and alumni give more money and become involved with the school.
For all those reasons, this study has been nearly two years in the making. We knew at the outset that to be of maximum value to all its intended audiences, the study would have to be carefully designed and comprehensive. Because of the survey's recruiter focus, we included only full-time programs. Part-time M.B.A. programs attract few, if any, recruiters because most of their students are already employed.
We also knew that the methodology by which we ranked schools would have to be rock solid and crystal clear to students, school administrators and recruiters. We asked business schools for information about their admissions process, their curriculum and their graduates' success in the job market, and we surveyed students about their M.B.A. experiences. But only people making hiring decisions rated specific schools -- and only schools they knew from firsthand experience. We didn't want the evaluations to be based purely on the buzz about the school. And we surveyed the people out in the field doing the actual recruiting -- the heads of business units, line managers and others -- not just the executives at corporate headquarters. Our online survey included recruiters from a variety of organizations, including nonprofit groups and government agencies. We also made sure we surveyed recruiters from new Internet-related companies such as NetZero and netLibrary.com, along with the General Electrics, McKinseys and Goldman Sachs Groups of the world. And when we convened a focus group of recruiters, we included an executive from the iVillage.com Internet site for women.
Focus groups and interviews with recruiters, business-school deans and career-services directors added to the survey's richness and depth. Everyone had a unique perspective. For example, Carlos Cavalle, dean of IESE, the graduate school of management of the University of Navarra in Spain, recommended that the survey include students' international perspective and their general-management point of view as rating variables. Jeanne Hamway, vice president for recruiting at Johnson & Johnson, stressed the importance of a demographically diverse student body and schools that foster a teamwork approach to business. And Randy Bangs, who recruits for about two dozen packaged-goods companies, advised us that most companies are not very interested in students' personal satisfaction with their M.B.A. programs.
The Wall Street Journal/Harris Interactive study of M.B.A. programs comes as demand for the degree is growing. Early this year, the number of people taking the Graduate Management Admission Test (GMAT) was running about 10% ahead of the same period in 2000. And some of the largest M.B.A. programs report growing interest for the next school year, at least partly because of the cooling economy.
Applications for the 20002001 school year were down about 10% at the Massachuchusetts Institute of Technology, but they're up 3% to 4% for next fall. A higher percentage came during the second round of applications, which ended Feb. 7, suggesting that the uncertain economy prompted more people to think about business school, says Margaret Andrews, executive director of M.I.T.'s M.B.A. program.
Columbia University's business school sees an "enormous increase" in attendance at receptions and on-campus events for prospective M.B.A. students, and fewer admitted students are asking to delay their studies. "Last year, companies were offering employees enticements to stay rather than go to business school," says Linda Meehan, assistant dean and executive director of admissions and financial aid at Columbia. "We had so many calls for deferrals that we had to start saying 'no.' This year, the phones are quiet."
The M.B.A. degree's renewed appeal follows a tumultuous time for both schools and recruiters. In 1999 and 2000, some students were dropping out of M.B.A. programs, and other potential students were bypassing them altogether, lured by the many job opportunities in the robust economy or the get-rich-quick promise of dot-com start-ups. That left recruiters scrambling to meet their M.B.A. quotas.
But the sagging fortunes of many Internet-related companies have revived interest in traditional M.B.A. employers, particularly financial-services companies and consulting firms. Mr. Sykes of the University of Chicago, for example, observed that nearly one-quarter of all the full-time M.B.A. students recently showed up at an investment bank's recruiting presentation, about double the turnout for such sessions last year.
About 25% of Yale University's M.B.A. graduates took jobs in information technology and entrepreneurial ventures last year at the expense of consulting firms. But this year, with so many dot-coms going bust, more Yale graduates have their sights set on traditional consulting and financial-services firms.
Compensation is still rising for M.B.A.s, but the offers aren't as outrageous as in the past two years in terms of stock options and fringe benefits. A major technology company even offered an eye-popping $100,000 signing bonus last year to one hot grad.
"I called last year the silly season," says Regina Resnick, director of M.B.A. career services at Columbia. "Now, recruiters have reasserted themselves and are in the driver's seat again."
While some companies certainly will be hiring fewer M.B.A. graduates this year because business isn't as strong, most experts expect demand to remain robust overall. Maury Hanigan, who runs a talent-management firm in New York, believes we have entered a period she calls "the post-dot-com glow." Many large companies "are still hungry for M.B.A.s because they couldn't hire enough over the last few years and lost the best talent to the 'new economy' companies," she says. "By next year, you won't see such aggressive recruiting because the economy will have cooled and talent will be more plentiful."
But students are still interested in new technology and entrepreneurship and are looking for Internet job opportunities with major corporations, if not with fledgling dot-coms. "Interest in information technology and entrepreneurial ventures is constant and there may even be an uptick at Yale," says Mark Case, director of career development at the Yale School of Management.
So, many big companies are pushing their internal opportunities for entrepreneurship and technology. American Express Co. has started promoting the Internet opportunities within its many business units, and Johnson & Johnson created a new recruiting advertising campaign with the theme, "Small-company environment, big-company impact." J&J also began a "targeted school" program to maximize its recruiting efforts at 13 universities, including Duke, Northwestern, and M.I.T. And because of continuing competition for talent, the company is filling some jobs with M.B.A. students at second-tier schools and even undergraduate business majors.
Some schools have benefited from the voracious appetite for M.B.A.s and hope they remain on corporate recruiters' lists as the economy slows. The dot-com "phenomenon was great for us because more companies were sampling our product," says Fallaw Sowell, deputy dean at Carnegie Mellon University's Graduate School of Industrial Administration, which for the first time drew recruiters from such companies as J.P. Morgan Chase & Co. and Morgan Stanley Dean Witter & Co.
Likewise, the Robert H. Smith School of Business at the University of Maryland popped up on the radar screen of more Wall Street firms in 2000, partly because they couldn't find enough M.B.A. graduates at such traditional recruiting sites as Columbia University, New York University and the University of Pennsylvania. "It was a tremendous year for us in terms of placement and salaries," says Dean Howard Frank. Average salaries and signing bonuses rose 20% to about $90,000 for the Class of 2000.
Some students question whether traditional recruiters matter as much these days. E-recruiting is catching on, as more students contact corporate Web sites on their own rather than wait to hear company pitches on campus. Lucent Technologies Inc., for example, is hiring more of its M.B.A. graduates through online connections, and the company is helping schools direct students to its recruiting Web site. Nevertheless, recruiters say the Web won't put them out of business, because after students make the online connection, they still want the personal touch.
This is the first edition of what we expect to be an annual survey of M.B.A. programs. It certainly won't make everyone happy. And given the rapid changes occurring in business and education, it will be a continuing challenge to keep subsequent editions abreast of all the changes. But we believe that The Wall Street Journal/Harris Interactive survey of M.B.A. programs is the single best resource on graduate business education published today, and we intend to keep it that way.
Copyright © 2001 by Dow Jones & Company, Inc.