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Hang onto your hats, things are about to get  wild around here.  Bloomberg released its newest ranking of MBA (and undergraduate B-school) programs this week.  We can see the headlines now -- Death of HBS?  Duke ascendant?  Take it easy.  Let's look at this more closely.

 

 By Ben Feuer

The first thing to consider when evaluating any ranking of schools is the methodology.  Bloomberg relies primarily on surveys of students and employers, and secondarily on faculty article publications.  This method has some obvious flaws -- there will be a tendency by students to rank their school more highly to try to make their school appear more prestigious, and since the methods of the ranking are publicly known, it would be completely conceivable for a lower ranked school to 'game' the rankings.  Bloomberg claims to correct against this by having psychologists evaluate the data.  The survey of employers seems more reliable, but ultimately basically amounts to a 'who is best known' contest.  Finally, the ranking by article publications is naturally going to favor schools with more prominent journals, since it is easier for Harvard professors to get published in Harvard Journals, Duke professors in Duke journals, et cetera.

So with those caveats in mind, what conclusions can we draw from the striking changes in the 2014 rankings?

In a post-online world, will Harvard's name brand dominance finally be challenged?  The most striking jump is HBS, from 2 down to 8.  Is this the beginning of the end of HBS's rankings dominance?  Hold your horses there, cowboy.  In their description of this year's ranking methodology, Bloomberg explains that this year’s ranking will show more change than previous rankings have done because previous years of data weigh less heavily on the current scores -- A LOT LESS.  This year's student evaluation counted for 75 percent up from 50 percent, and the 2010 survey was eliminated completely from the ranking.  The reason Bloomberg used to incorporate multiple years was to prevent 'outlier years' -- of course, this new methodology seems destined to create many outlier years (and many headlines).  Ultimately, it is far too soon to ring a death knell at HBS based on this survey alone.  All of what we just said for HBS also applies to MIT, and in almost precisely the same manner.

Holding Steady ... In some ways, given the radical difference in methodology, it's more striking to note what did NOT change.  Three of the top four -- Booth, Wharton and Stanford -- are materially identical to last year, with slight changes.  Wharton continues to hold a higher place in Bloomberg's ranking than Stanford.  Lately some pundits have been quick to bury Wharton as outdated -- not the trendiest of top MBA hotspots.  I think this ranking shows that from an employment and student satisfaction standpoint, at least, Wharton is still a top three school, year after year.

Up and Coming?  Duke and Yale have long had well regarded MBA programs, but this might mark a watershed moment for both schools.  Duke is probably benefiting from its exceptional regional reputation, since the methodology of the employer survey this year incorporates regional and industry-specific recruiting more effectively than past surveys, and also devalues pure 'name brand recognition' somewhat (a battle HBS, Stanford and Wharton will win every year).  Yale's ascendancy is the most striking -- a quantum leap from 21 to 6 -- and could mark the beginning of a big two years for Yale's business school.  Given the strong name brand recognition of the undergraduate program, it's hard not to feel optimistic about Yale's chances for climbing higher in future US News rankings.

Conclusion.  Overall, it would be a mistake to read too much into Bloomberg's biannual rankings.  They change a lot every time they're done, and this year in particular, the major shifts in methodology produced a lot of upheaval.  The healthiest approach would be to look at this as one more data point in a long line.  Perhaps it will make some students reconsider strong programs they might otherwise have overlooked, like Tepper, Yale and UCLA Anderson.  That alone would be a fine outcome for this ranking.

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