How to evaluate business school rankings?

In the past couple of weeks we’ve been following Business Week’s admissions forum heated debate on the fall of Wharton’s MBA rating from 3rd place in 2009 to 5th place in 2010. We believe that the reason for the decrease can be explained by their mediocre recruiting statistics. Only 65.8% of Wharton students were employed by graduation in 2009. This is not a very encouraging number. However, does this mean that Wharton has become a worse choice for you? Not necessarily. While it was a rough year for finance oriented business schools, we believe that recruiting numbers will come back as the economy improves. The volatility of ratings is not a new phenomenon and quick changes over short periods of time have happened before. For example, Stanford GSB was ranked 7th by FT in 2004, 3rd in 2006, 6th in 2009 and 4th in 2010. Does this mean that the quality of a Stanford education or the opportunities it offers students changed over these years?

We at ZoomInterviews don’t think so.

However, doubts expressed by many applicants about the quality of Wharton programs deserve a separate discussion about the place of rankings in the admission process.

According to the Association to Advance Collegiate Schools of Business (AACSB) report from 2005, Deans have always believed that ranking measures do not accurately reflect the quality of business education. Measures used in media rankings are often arbitrary, selected based on convenience and controversial. Characteristics that are of little importance are often included, while important characteristics are excluded because they are more difficult to measure. For example, while...

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Women MBAs - Why do they lag behind the Men Counterparts?

Recently I read a Wall Street Journal article titled “Women MBAs Continue to Lag in Pay, Promotions”.

The article is based on the “Pipeline’s broken promise” research by Christine Silva published in Catalyst, a New York City-based nonprofit focused on women in the workplace,  and argues that despite having similar educational backgrounds and experience, female MBA holders are still not getting the same pay, positions, or promotions as their male colleagues.

The study, which had more than 9,000 respondents who graduated from 26 MBA programs between 1996 and 2007, found that starting from the first job post-MBA women lagged behind male respondents. For example, 60% of women respondents reported that their first job was at an entry-level position, as opposed to 46% of male respondents.

First Salary:Women also earned an average $4,600 less than men in their first job, even if they had the same amount of previous work experience, the study found.

According to the article, Ilene Lang, president and chief executive officer of Catalyst, attributes the disparity to something she calls “bad first boss syndrome.” The experience sours the potential for raises and promotions later on, Ms. Lang says.

“From the start, women start in lower positions, and they aren’t getting the right support from their management,” the study results indicate, she says.

Ann Bartel, an economics professor at Columbia Business School who studies labor economics and human resource management, says women may lag behind men for two reasons. In some cases, companies anticipate female employees will...

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Do you need an MBA to become an entrepreneur?

Categories : Entrepreneurship, MBA

MBA EntrepreneurshipRecently I conducted an admission mock interview for MBA applicant who targeted one of the top business schools. At the end of the interview the applicant had an opportunity to ask me questions. One of the questions was if entrepreneurship can be learned in business school.

I believe that entrepreneurial classes taken during an MBA at a premier school will definitely add value to someone who has entrepreneurial spirit but lacks more formal analytical skills. In entrepreneurship classes students learn useful business concepts, create business plans, and acquire finance and marketing tools. It is just as important that they also learn how to analyze the viability of ideas.

Empirical research supports this conclusion as well. Researcher Donald Kurato (2004) argues that it is now definitively evident that entrepreneurship can be taught. Gorman, Hanlon, and King’s study (1997) states that “…most of the empirical studies surveyed indicated that entrepreneurship can be taught, or at least encouraged, by entrepreneurship education.”

The recent research paper ”Toward Effective Education of Innovative Entrepreneurs in Small Business: Initial Results from a Survey of College Students and Graduates” made by Summit Consulting, LLC for the Small Business Administration (SBA) presented some interesting findings:

- Graduates who have taken entrepreneurial courses are significantly more likely to select careers in entrepreneurship, which are defined as ever having...

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Second Tier B-Schools - Higher ROI than Ivy League Schools?

According to a recent study, the highest rates of return were found for the second-tier public business schools. The rate of return for Michigan State (Broad) was 42.72 percent. For Illinois (Urbana-Champaign), it was 42.33 percent, and for Iowa (Tippy), it was 39.7 percent.  Contrast this with the rate of return for Harvard Business School, which was only 19.7 percent. The University of Chicago (Booth School of Business) was in the last place with only a 13.4 percent rate of return.

How the Study was conducted?

The new study estimated the rate of return for the top 30 MBA programs and 15 second-tier MBA programs in the United States by comparing the cost of degree acquisition with the incremental post-MBA income over an expected work life of 40 years. Tuition and fees and two years of foregone income were used as the cost of the investment. The incremental salary was calculated and used as the investment’s cash inflows.

Reasons for high ROI for Second Tier Public Business Schools

According to the study, these high returns can be credited to two distinct aspects of their programs.

First, the tuition and fees are generally less than their private counterparts. For instance, Michigan State’s in-state tuition and fees are $29,359 for two years, and only $58,365 for a non-resident. Chicago and Harvard, on the other hand, are $97,165 and $101,660, respectively – for the same two-year period. The median tuition for Business Week’s top 15 programs is $93,568, while the median tuition for the fifteen second-tier schools is $72,184. The higher required investment reduces the rate of return for a common cash flow. But all MBAs...

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Why Business Schools are looking for less experienced MBA candidates?

Categories : MBA, MBA Admission Trends

Recently, business schools such as Carnegie Mellon, Harvard and Stanford started to reduce their work experience admissions requirements. One of the most renowned examples of this trend is Harvard Business School’s 2+2 program for college juniors.

While it seems that the main reason for the change is increased competition for the students and business school’s desire to increase their application pools, HBS argues that the main goal is to attract applicants who would not enroll to the business school otherwise. According to an interview with Deirdre “Dee” Leopold, HBS Dean of Admissions, published on the Poets & Quant’s website, the program is meant to attract people to business school at a time when they are making other decisions — thinking about law, medicine or engineering, for example.

There are two main advantages of going to business school without significant working experience.

First, students enrolling to MBA programs shortly after college will have an opportunity to graduate younger and potentially improve their ROI.

Secondly, younger students with stronger stamina could be more attractive for specific categories of employment such as investment banking. Younger students could also be more attractive for the employers who are trying to attract MBA students with lower expectations for post MBA salaries.

While these considerations could be relevant in some situations, there are several significant advantages of having meaningful work experience prior to MBA.

Advantages for the applicants

1) Students with significant pre-MBA work experience have a better idea about what they want to do post MBA career-wise and have fewer chances for...

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