At an online forum for aspiring MBA students, participants are discussing an application essay (400 word limit) for a top ten program:

Applicant 1: Quick question guys! How stringent is the word limit? I am at 423 words.

Applicant 2: I wouldn’t worry about it. I’ve been following the +10% max rule.

Applicant 3: mmm… it’s not like they count the words right? I’m thinking if you don’t push it too much, they won’t even notice.

A suggested essay topic for the above applicants: “Discuss the importance of corporate ethics, respect for the law, and sound editing skills. Compare the above applicant statements to the principles displayed in recent accounting and financial scandals.”

The actual essay topic in question: “What is your greatest example of leadership and what personal qualities helped you succeed in that role? (400 word limit).” How about a 500 word essay on thinking outside the box?

In a recent blog post, I took a tongue-in-cheek approach to the contentious topic of ranking business schools. The genesis of the post was a very different question: how to rank hospitals’ success rates with a specific operation when some hospitals only accept less risky cases while others take on more challenging ones. Accepting only less risky cases should imply a higher success rate for obvious reasons having little to do with the quality of care. Business schools endowed with brighter, more capable students likewise should see higher success among their students independent of the quality of education the students receive.

To demonstrate this point, I provided a quick and dirty analysis, completed between the hours of 1 and 3 am, restricted to data on hand, and without the careful statistical standards that would constitute "research." The point was to show that changes to the assumptions underlying rankings can significantly change the results.

Visitors on an upswing

The resulting hoopla over the post, which begot university press releases and took my blog’s traffic from a handful of loyal-reader friends into the thousands, is both enlightening and frightening. Below I offer a few clarifications.

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Rankings of business schools generally fail to evaluate the inherent quality of an institution, instead ranking the people who choose to attend it.

UPDATE: If you came here from a source that did not make clear the wry, tongue-in-cheek nature of my rankings, also read the clarification.

An MBA student from UC-Davis will graduate, on average, with a starting salary that is $30,000 lower than a graduate from nearby UC-Berkeley. Can we take from this that two similarly-credentialed students at the two schools would have such a high difference in their market values? This reasoning ignores the selection bias. A student accepted by both schools is quite likely to choose the one often ranked in the top 10.

As long as top candidates choose to go to top programs, a higher ranking confounds the quality of students and the quality of a school. The proper interpretation of Business Week’s rankings, for example, is not that Harvard is a better school than Blah College, but that the type of students who go to Harvard do better after graduating from Harvard than the type of students who go to Blah College after graduating from Blah. Thus, a high starting salary for Harvard graduates might imply that Harvard’s professors can polish rough stone into beautiful rubies, but it is also possible that Harvard has the benefit of students who could have very well succeeded anywhere. (Note: I pick on Harvard because it actually does quite well in my rankings, supporting the rubies theory).

Which schools do best with the students they have? Traditional rankings fail to tell a given student with a given skill set which schools are most likely to increase his market value. That’s the goal of these rankings, highlighting that a change in methodology significantly alters the results. Full rankings below the jump. Methodological disclaimers (and there are many) are at the very bottom.

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Jake starts school next year. Public school. In Nashville. And I’m scared.

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In order to live, man must act; in order to act, he must make choices; in order to make choices, he must define a code of values … He cannot escape from this need; his only alternative is whether the philosophy guiding him is to be chosen by his mind or by chance.

The quote, from Philosophy and Sense of Life by Ayn Rand, is a less pithy (and less fatalistic) version of Socrates: “An unexamined life is not worth living.”

From A Man For All Seasons by Robert Bolt:

Margaret: In any State that was half good, you would be raised up high, not here, for what you’ve done already. It’s not your fault the State’s three-quarters bad. Then if you elect to suffer for it, you elect yourself a hero.

Thomas More: That’s very neat. But look now … If we lived in a State where virtue was profitable, common sense would make us good, and greed would make us saintly. And we’d live like animals or angels in the happy land that needs no heroes. But since in fact we see that avarice, anger, envy, pride, sloth, lust and stupidity commonly profit far beyond humility, chastity, fortitude, justice and thought, and have to choose, to be human at all … why then perhaps we must stand fast a little — even at the risk of being heroes.

Now, back to grading essays on business ethics …