The Wall Street Journal's Ranking System

and the Texas MBA Program

By David Wenger
Director of Communications, Marketing and Public Affairs

The Wall Street Journal recently released its annual ranking of MBA programs at business schools across the U.S. and the world. As many know, the ranking business is flourishing, and McCombs currently participates in about 30 different rankings, providing information and statistics to a variety of publications and institutions.
 
Each year, however, the WSJ survey in particular raises questions from the UT Austin business school community. Here are the answers to a few of those questions.
 
Why is McCombs on the “regional” list?
 
There are two aspects to the WSJ ranking system that turn out to be uniquely prejudicial to our school.
 
The first is that the newspaper artificially divides all business programs into one of two categories. To the WSJ, a school is either a “national” school or a “regional” school, and the editors have decided McCombs is a regional school, ranked No. 19 on that list this year. The WSJ has designated only 19 schools in the U.S. as “national.”
 
How can a top-tier, nationally renowned business school, ranked by the WSJ in 2002 as 7th in the world, and located in the state with more Fortune 1000 corporations than any other be considered “regional”?
 
That question leads to the second important point about the WSJ rankings. The newspaper bases its results 100 percent from perceptions gathered from corporate recruiters who agree to complete a survey each year, and the national and regional labels are an attempt to group schools based on the type of recruiters they have in common.
 
Since McCombs shares recruiters with Texas A&M, Rice, Baylor, and other “regional” business schools, the WSJ has labeled McCombs regional also.
 
The fact that many national firms also recruit in Austin hasn’t dissuaded the WSJ from including McCombs in the regional category. Nor has the fact that McCombs is the only MBA program currently ranked in the top 20 by both U.S. News & World Report and BusinessWeek that is missing from the WSJ national category.  And then there’s this final kicker:  the WSJ itself confirms that McCombs had a higher recruiter perception score (one of the three main ranking criteria) than Berkeley, UCLA, or UNC, our major public competitors, all of which are “national” by WSJ standards. The WSJ survey simply does not allow for a school to be strong both regionally and nationally—which is one of our goals because Texas is a major employer for our nation.  A school can only be on one list or the other.
 
The WSJ editors don’t mean the regional designation as a pejorative. But it can easily upset the business community in Texas, which takes pride in producing some of the best business talent in the country. (Not to mention those sensitive to blatant East Coast/West Coast bias.)
 
It’s a matter of geography, not program output quality, and there is no strategic change McCombs can make to engineer a “rise” to the national list. The Journal’s methodology clusters schools into only two categories based on sharing recruiters with other schools and cannot handle the nuance of a national school in a “regional” area. As you can see on the map below, clustering with other top 20 schools is not a physical option for McCombs.

Okay. Why then doesn’t the school rank higher on the regional list?
 
The gist of this question is easy to understand. “I see schools ranked higher than McCombs that never rank higher than our school on other surveys. Why is that?” An example would be BYU, which is No. 1 on the WSJ regional list, 18 places ahead of McCombs. In the U.S. News ranking, McCombs is No. 18 and BYU is No. 41.
 
One would think that if a nationally dominant business school gets placed in a regional category, it would do very well. However, it is important to note that the WSJ survey doesn’t objectively measure anything. It is an opinion survey. And the way this one is designed sets up McCombs for an unwelcome result.
 
This is how it comes about. Most truly regional schools attract recruiters from smaller companies that tend to recruit from local favorites. These recruiters are often the same people who flock to the football games wearing the university’s colors. Those recruiters tend to give higher scores than national recruiters, a fact that has been acknowledged by the WSJ.
 
McCombs, on the other hand, attracts many recruiters from top national firms, despite its regional designation. These recruiters are not all Texas alumni and they “shop and compare” at other top schools—evaluating McCombs with those same high standards. Yes, they are satisfied, but they’re not necessarily in the university booster club.
 
Why has McCombs moved so dramatically in the WSJ’s rankings?
 
Since 2001 the WSJ has placed McCombs everywhere from No. 7 in the world to No. 35 among regional schools. In 2006 McCombs climbed back to No. 18 regionally, and we’re at No. 19 in this year’s survey. Talk about whiplash. Such volatility is par for the course in the WSJ ranking, however. Thunderbird plummeted from No. 1 regional last year to No. 11 this year. Michigan State fell from No. 5 to No. 18. These kind of dramatic changes happened to nearly a third of the regional schools this year, and last year was similar.
 
Are we to assume that business schools are riding a roller coaster in productivity and effectiveness? Practical experience says otherwise, particularly in the academic world where even significant curriculum and program changes may take years to show measurable results.
 
It’s difficult to understand what value a prospective student can place in the survey, since the rank of his or her school before admittance is very likely to change dramatically by graduation time.
 
What should a member of the McCombs community take away from all of this?
 
Dean George Gau’s main message regarding rankings has remained consistent during his tenure. We take the rankings seriously and always try to put our best foot forward when taking part, and we always consider any worthwhile feedback from surveys. At the same time we do not direct the strategy of the school to raise our ranking in one or more of these surveys, but rather to improve fundamentally the quality of our academic programs. We have been very successful over the past five years in enhancing that quality.
 
To finish on a real-world, relevant note, direct feedback from recruiters is more positive than ever. According to Stacey Rudnick, director of MBA Career Services, this year’s MBA graduates saw a 70 percent increase from their pre-MBA salary upon graduation, and students averaged more than two offers each. And twice as many companies have booked early for fall recruiting relative to the same time last year, offering jobs in New York City, Chicago and other national business centers closer to home, such as Dallas and Houston.