Ranking Q&A with Paul Danos, Dean of Dartmouth's Tuck School of Business

Friday, 3 April 2009 | University Rankings

WHAT IS THE BEST RANKING?

The many rankings of business schools all measure different things. The ones I like the best are those that survey people who know the school well. The ones I like the least are those that survey people who don't have direct knowledge of the school, which leads to just a name recognition exercise. The Wall Street Journal, when they did a ranking of MBA programs, asked people who actually had direct relationships with the employment situation at a school. They were people with knowledge of the school and that methodology seems to work. When a survey asks about the research output of a school, it is always best if the people responding have knowledge about each school. Tuck does well when people measure actual output like professor publications per capita. And, Tuck does really well with specific questions like salary levels of alumni three years out, or when measured by the real numbers like GMAT scores or return on investment. Every ranking has parts that I like and parts that I don't like. The parts that I don't like are the ones that just revert back to name recognition, and then of course the business schools that have the highest name recognition or the parent universities that have the highest name recognition are the ones that are going to win. (picture: Joseph Mehling)

WHY SHOULD SCHOOLS WORK WITH RANKINGS/PAY ATTENTION TO THEM?

The potential applicants to a school like Tuck are usually people between 25 and 30 years old. They haven't gone to a business school before. They have to educate themselves, get familiar with the schools, and then they have to apply. But it's a big one-time purchase, and therefore a school must have a presence in the publications these applicants read initially. Therefore it would be unwise for a school to say it was not going to participate and not even be mentioned in the rankings that most applicants read. Even though one might not agree with the rankings and the specifics of who comes in first and who comes in second or third, it's still better to be on that list than not. I think there are a couple of schools that are so well known that it wouldn't make much difference if they were on the list or not, but for all the rest of the top schools, I think it makes a difference.

WHY ARE CERTAIN RANKINGS SO POPULAR, WHILE OTHERS ARE LESS SO?

I believe that the underlying publication is important. I think The Wall Street Journal ranking was considered very prestigious because it was from such a highly prestigious business journal. The other main rankings are prestigious for the same reason. Some publications make a big deal out of rankings and some don't. Some of the publications are identified with rankings - like U. S. News and World Report for undergraduate programs. However, for MBAs there are about six rankings that are important and prestigious. BusinessWeek and the Financial Times do a lot to market their ranking issues while Forbes and The Economist don't make as big a show of rankings. Many of these publications now have business education coverage all the time. Rankings may be a special issue for them, but they are really covering education as a beat now.

WHAT'S YOUR ANALYSIS OF THE METHODOLOGY OF THE RANKINGS?

The methodologies try to do good social research. They need to pick a representative respondent pool of people who are knowledgeable. I think that is where the trouble often comes in. It is hard choosing a representative sample, measuring the right variables and translating the results into valid statistics - all are very subtle and difficult tasks. Some data at every school is self reported, and not every school pays as much attention to being consistent from year to year or having a rationale for answering the questions. At Tuck we have a formal procedure for answering questions. We have a database system for gathering statistics about our school. I think that most people are sincerely filling out the forms, but that not every school pays as much attention to being consistent.

ARE THERE OTHER METHODOLOGIES THAT SHOULD BE ADDED TO THE RANKINGS?

In terms of how you measure the value of an MBA experience, there are some great ways to measure that directly. For instance, look at the alumni giving rate of any school. I think you could make a ranking on that measure alone and call it a "long term satisfaction" ranking. Alumni giving rates are a great measure of satisfaction. Another key measurement is the strength and expertise of faculty and what percentage of the faculty actually teach the MBA students, as opposed to just doing research. Of course measurement of graduates' success in obtaining jobs can be a pretty tangible number, but even on this measure, rankings can sometimes make mistakes. In the U.S. there is a bonus system on top of base salary - even for brand-new employees, and sometimes only base salary is used in some of the rankings. While that may be a valid measurement for some countries, it's not okay for the U.S. I think anyone who does these rankings should have a panel of scientists or social scientists that studies the methodology and tries to get to the real facts behind the question.

ARE RANKINGS A POISON OR A BLESSING FOR FURTHERING QUALITY BUSINESS EDUCATION

The biggest problem with rankings as a social movement is that they deal with only the elite schools. There are thousands of MBA programs in the world and only about a hundred schools are ranked and maybe only 30 to 50 are consistently in the top spots. For schools that are ranked though, it does encourage continuous reassessment of the programs.

WHAT ARE THE IMPACTS OF THE RANKINGS ON ALUMNI, CURRENT STUDENTS AND PROSPECTIVE STUDENTS?

Of course students, faculty, and alumni like their school to be highly ranked. I think that when they see a ranking that is high, it makes them feel good. If a school spirals down in the rankings and gets knocked out of the top 20, then that school won't get as many applications from a lot of circles. And so business schools need to pay attention to the methodologies of these different rankings because the rankings are talking about the quality of their programs. That's the purpose of these rankings, and I'd say 80 percent of the people who read rankings actually believe that it's a fine measure of quality. And, they're not looking at the results in the way a person who works with rankings all the time would look at the little issues or measurements in each methodology. Most people are just thinking, "Well if a ranking says you're number one then you must be a great school, or if it says you're number 50 then you must be." I think that people believe what they read, and I think the world loves rankings. People in general rely on rankings for movies, cars, restaurants, and business schools. They like to get these simple, straightforward, ordinal scales. Obviously it's a lot more complicated than that but it does have an effect on peoples' emotions, and it has an effect on peoples' choices - and therefore business schools can't ignore the rankings.

IS THERE A BIG DIFFERENCE BETWEEN THE ROLE OF RANKINGS IN THE US VS EUROPE?

There are fewer MBA programs in Europe, so it's not quite the same. The European schools all have their own pecking order within each country, and in the past until the Bologna Accord was set up they were harder to compare. Back then, if you went to school in Germany you thought about the prestige of the schools in Germany; if you went to school in France you thought about the prestige of the schools in France. You didn't think about the schools in Europe as a whole. But in the U.S., if you live in Kansas you don't just look for the best school in Kansas. There might be a great school in Kansas but you'll also think about other great schools from other states, from the Ivy League schools in the Northeast to the great schools on the the Pacific Coast, whereas in Europe you have specific country and language factors. I think that rankings are having a growing effect in Europe, and schools brag about rankings just as much in Europe as we do here in the U.S. when we get to be in the top ten.

ABOUT PAUL DANOS

Paul Danos is the ninth Dean of the Tuck School of Business at Dartmouth College and the Laurence F. Whittemore Professor of Business Administration. He was appointed Dean of Tuck on July 1, 1995. Before joining Tuck, he was Senior Associate Dean and chaired professor of accounting at the University of Michigan. Dean Danos was Chairman of the Accounting Department at the University of Michigan from 1984-1991 and he also served as the Director of the Paton Accounting Center from 1988-1991. He received his PhD from the University of Texas at Austin in 1974 and BS and MBA from the University of New Orleans. He is a CPA and a member of the AICPA.

Some of Dean Danos' current and past professional associations include: Board of Directors, BJ's Wholesale Club; Board of Directors, General Mills; Board of Directors and Secretary-Treasurer of the AACSB International; Chairman of the LEAD Council of Deans; Advisory Council for the University of Notre Dame Mendoza College of Business; GMAC Board of Directors; and the New Hampshire Governor's State Consensus Revenue Estimating Panel.

Dean Danos has led major curricular innovations at both Tuck and the University of Michigan. He is very active in reviewing and counseling business schools for accreditation in North America and Europe. Dean Danos has published two textbooks, several research monographs and over 25 scholarly articles and has made presentations at many academic and professional meetings on topics ranging from financial accounting to the future of management education. He has been extensively quoted in the press on all areas of business education. He has taught financial accounting at all levels in graduate and undergraduate programs and Philosophy of Science to PhD students. He has chaired and been a member of many doctoral dissertation committees.