04 May The world’s top MBA program
In 2014, almost 250,000 prospective students took the GMAT, an entry exam required by most of the 16,000 business schools around the globe. Most apply for an MBA, the most recognized business degree. It’s not only hard to get accepted but also quite expensive (tuition at Harvard costs almost $100k). Still, an MBA usually pays off; the salary increase post-MBA is almost 100% at top schools. And exactly there’s the difference between myriads of MBA programs offered: the prestige of the business school and the corresponding post-degree salary.
The Financial Times Global MBA ranking is probably the most widespread measure of prestige of business schools. Every year a new ranking is published, and a new winner announced. Over the years, the same set of schools rotate among the top spots of the Ivy League table. Avi Gordon, author of MBA Admissions Strategy, states that reputation doesn’t change every year but is built over many years. Hence my analysis of the Financial Times ranking over time (the earliest available ranking is from 1999). I picked the schools that were consistently in the top 10, resulting in eight schools, six American and two European.
Unsurprisingly, the world’s best known names Harvard, Stanford and Wharton make up the top three of the list. Wharton was leading the list but recently floundered. Harvard dipped after the financial crisis. And Stanford’s rank is quite volatile. More interesting, however, is the rise of the two European schools INSEAD and London Business School, which, over the past two decades, moved in the top 5 (INSEAD was even crowned number one this year). This international competition is stirring up the traditionally US-heavy Ivy League and schools such as Booth, MIT and Columbia are losing out.
Ranking matters; attending a top 8 school on average leads to a 41% higher salary as compared to the top 100. (Causality is questionable since ranking is also partly determined by average salaries.) The expected salary among the top 8 ranges from $154k at LBS to $186k at Stanford, with INSEAD being somewhere in between with $167 (according to Financial Times). With its 10-month program, however, INSEAD is way more attractive than any of the other top schools, where you pay tuition and forgo salary for about 20 months on average. Other 1-year degree programs are ranked lower (e.g. Kellogg).
There are obviously many benefits of an MBA other than salary. Still, being the most international school and offering campus choices in Europe and Asia, INSEAD feels like the top choice for me. Looking forward to an awesome year!