Reputation and efficiency: A non-parametric assessment of America’s top-rated MBA programs

Abstract

Widely publicized reports of fresh MBAs getting multiple job offers with six-figure annual salaries leave a long-lasting general impression about the high quality of selected business schools. While such spectacular achievement in job placement rightly deserves recognition, one should not lose sight of the resources expended in order to accomplish this result. In this study, we employ a measure of Pareto-Koopmans global efficiency to evaluate the efficiency levels of the MBA programs in Business Week's top-rated list. We compute input-and outputoriented radial and non-radial efficiency measures for comparison. Among three tier groups, the schools from a higher tier group on average are more efficient than those from lower tiers, although variations in efficiency levels do occur within the same tier, which exist over different measures of efficiency.Journal of Economic Literature Classification: I2, D6, N3

Efficiency in education: a review of literature and a way forward

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How Variances in Business School Rankings Affect Enrollment Trends and Practices

“…Reputation supposedly reduces stakeholder uncertainty about the value of their investments (and the value of future exchanges); therefore, a more favorable reputation is likely to entice buyers to pay a premium for the services of these institutions, or even employers' services (Ray & Jeon, 2008). Both prominence and perceived quality reduce buyer uncertainty, even if it is through the "faux belief of quality" (Rindova et al, 2005).…”

“…Safon expanded on this by explaining that reputation at the business school level is mainly driven by a combination of three factors: size, student quality, and media rankings. Ray and Jeon (2008) diminished the concept of value added post business school because they argued using empirical data that most top-rated schools only admit students with high GMAT scores; therefore, most graduates are preselected for a successful post-MBA career, and thus the extent of value added post-business school can be broadly overstated. As of 2012, graduates with no experience (less than 3 years) had a median pay of $53,900, which represents a 4.6% decrease since 2007-08, according to an analysis conducted for The Wall Street Journal by PayScale.com.…”

“…But as outlined by Simon, what can truly be extracted from these numbers is that being an MBA graduate, with little experience or from a less recognized program does not remunerate an individual in the way he or she expects. The employers who are willing to pay top dollar for graduates often do not recruit far down the "prestige ladder" or far down the rankings ladder (Ray & Jeon, 2008). Media rankings have become an important factor in determining the reputations of business schools (Gioia & Corley, 2002;Martins, 1998).…”