Some of you may be too young to remember the details, but about 12 years ago, we had that big financial crisis involving mortgages and Wall Street and fancy-dancy securities called collateral debt obligations and all that jazz. The part you probably do remember is that it made the housing market melt down, and people got foreclosed on and lost their houses, and overall things were really, really rough.
One culprit at that time was the ratings agencies. These are huge firms with their corporate fingers all over hidden parts of our finance system. They are supposed to assess companies, stocks, and securities and evaluate if they are sound investments. The big names are S&P, Moody’s, and Fitch. Basically to grossly oversimplify, the role of ratings agencies is to be a neutral third party that assesses risk.
If you want to get an entertaining education into what happened in 2007 and 2008, the movie Inside Job lays it out pretty well. (It also implicates Columbia Business School’s dean emeritus Glenn Hubbard and professor Rick Mishkin in a damning way — see YouTube clip . One reason that we weren’t impressed by Columbia’s move last year in replacing Hubbard with an internal appointment, moving long-tenured Columbia professor Costis Maglaras up to the corner office, was because it just seems that perhaps CBS is due for some fresh thinking and a shake-up of the old guard. But whatever.) Wikipedia here for the synopsis, or EssaySnark’s assessment of impact to Columbia Business School in the admissions environment of the time is in our ‘snarchives here, or at the bottom of this post we’ve got a series of articles from the Columbia student paper in 2011 where they covered this event at the school and overall campus.
2008 financial crisis. Ratings agencies. Ethics. Meltdowns.
What on earth does this have to do with business schools and the MBA?
Well, let’s look at the ratings agencies in this world of graduate business education, otherwise known as rankings.
This isn’t specific to business schools; ALL colleges and universities are subject to the market pressure that comes from their respective rankings system. However, it’s keenly significant in the universe of the elite MBA.
First we have Bloomberg BusinessWeek, which we believe to have been the first publication to have launched a ranking for MBA programs.
Guess how they decide which school goes first?
The schools at the top of the BusinessWeek list are the ones whose students land the highest starting salaries in their post-MBA job.
BusinessWeek’s ranking also has weights around networking, and oh hey look! Their third most important factor is learning where they evaluate the curriculum, and their fourth primary factor is entrepreneurship.
They also do some kind of qualitative surveying asking current students and recent grads about the “climate for women; international students; people with disabilities; and people of all sexual orientations and gender identities” (from their Methodology page as of 7/18/20).
Okay, cool, cool, you wanna get more money and that’s the whole point of the MBA, we get it, that’s what Bloomberg BusinessWeek measures.
What about the others?
The behemoth in all rankings in America is probably the U.S. News and World Report system which makes big bucks out of selling thick college guides to anxious parents of high school students every year. They too have an MBA ranking. So what do they measure?
Get this folks: One significant weight in the U.S. News list is the opinions of other deans.
Yup, that’s right.
The methodology for the U.S. News MBA list puts the HIGHEST individual weight of all — 0.25 — on what other schools’ deans think of the school.
HOW ON EARTH DOES THAT MAKE ANY SENSE?!?
Basically this is outsourcing the entire ecosystem to the competition to figure it out!
It’s like saying, “Oh hey Pepsi. What do you think about what Coca-Cola is doing these days? Are they a good product?”
How does another school’s dean know details about what’s going on at all the schools in their market?
Sure other deans talk — especially right now, with this pandemic in full swing, as they’re all scrambling to figure out what to do about bringing students back on campus or not.
But how much do deans actually know what’s going on at their peer schools? It’s not like they’re industry watchers who have free time to investigate the programs, policies, curricula, whatever of these other schools in the market.
THIS IS UTTERLY RIDICULOUS!!
EssaySnark does this full time and we can barely keep up with the happenings at the 16 or so schools that we follow.
Heck, the ADMISSIONS DIRECTORS often misrepresent, misreport, and mischaracterize what they do compared to what their peer schools do — likely unintentionally, but misrepresentation nonetheless. Whenever you hear an admissions person say that their school is “the only” one that offers such-and-such, it’s probably not true.
And yet, U.S. News weights the opinion of other deans — WHICH HAVE UNTIL VERY RECENTLY ALMOST ALL BEEN MIDDLE-AGED, MALE, AND WHITE — with how they think the schools should land on this list.
And you just KNOW that these deans are all participating in their surveys — because if a dean does not participate, maybe the U.S. News people will be offended, and will penalize HIM and HIS SCHOOL! And anyway, it’s flattering to be asked your opinion; not every school’s dean is asked to talk about their opinions of other schools. His school is SPECIAL which means HE is special. So he’s gonna fill out that survey and have interviews with those folks, you betcha, and tell them everything that he thinks about those other schools. BECAUSE THE RANKINGS DRIVE HIS BUSINESS.
And oh yeah, you know what else U.S. News ranks? They rank the percent of applicants that a school admits. They rank the GMAT score and GPA.
Basically they reward schools that admit FEWER students, and also schools that have HIGHER test scores and grades in their class.
So guess what else? THAT MEANS THAT PRIVILEGED WHITE PEOPLE ARE INSTANTLY FAVORED IN THIS SYSTEM.
Talk about systemic racism. Talk about a broken system.
Here’s the loop that we have going:
- Rankings come out.
- School falls in the rankings.
- School receives fewer applications.
- Of those applicants that the school accepts, fewer candidates accept and decide to enroll.
- Schools admit percent has to go higher in order to fill their class.
- School falls further in the rankings because they attracted fewer high-scoring students and their acceptance rate increased.
So what happens?
School panics. School decides they need to boost their rankings. What do they do? In the next cycle, school selects on GMAT score because that will boost their averages. They throw fellowship money at students with high GMATs to get them to attend. The school essentially buys their position on the rankings.
If you have a high GMAT score, you might be sitting here feeling uncomfortable. “Dang, EssaySnark. I worked hard to get that score. Are you saying I don’t actually deserve to get in?!??”
No. That is not what we’re saying. We’re saying that the system is rigged. It’s not actually about you. If you do indeed have a high GMAT score, you’re likely to end up OK this year. And, hopefully, a high GMAT score won’t be mandatory for someone to get in!! Because of these changes in the world.
Traditionally, for generations now, for a school to do well on the rankings, they neeedd to focus their acceptances on a certain type of candidate. If they don’t, their school will suffer in comparison to its peers.
What does that type of candidate look like?
It’s not usually a BIPOC. It’s not someone who’s had to fight against the system their whole life just to get where they are — in a position to even consider trying for an elite MBA.
If you’ve been trying to understand what systemic racism looks like, THIS IS IT.
It’s a system set up — not intentionally — but set up nonetheless to reward those in positions of privilege and power. It perpetuates the inequality.
It comes from not thinking.
This is also known as collateral damage. Entire swaths of the American population have been collateral damage.
This is also what’s behind the good work of our Twitter friend Akil Bello in trying to get rid of standardized testing as a requirement of admission to college.
So back to where we started, and the title of this post.
Which school will go first?
Which school will throw off the oppression of the rankings, and decide to make acceptance policies based on justice and fairness?
Which business school will start to, ohidunno, RELEASE DATA ON HOW MANY BIPOC STUDENTS THEY ACTUALLY ADMIT? And how many they were able to get to apply?
EssaySnark has been pounding this drum as long as we’ve been doing this work — but clearly we’ve not been pounding it hard enough.
THE WHOLE SYSTEM NEEDS TO CHANGE.
Yes we (finally!!) have a smattering of diversity coming into the deans’ offices at some schools.
But dammit! We should not have to gush about how “forward-looking” those schools are — the schools like Wharton that were “brave enough” or “progressive enough” or whatever other ridiculous compliment we feel compelled to give to their ALMOST ALL-WHITE SEARCH COMMITTEE* who deigned it to be FINALLY the right time to select a Black person — oh look bonus points for you — who is also a WOMAN — to lead their school.
IT’S FUCKING 2020 PEOPLE! WHY IS IT THE EXCEPTION TO HAVE A WOMAN OR A PERSON OF COLOR AT THE TOP?!!? WHY IN THIS SUPPOSEDLY MODERN TIME DO WE STILL PUT THE EVENT OF APPOINTING A BLACK WOMAN INTO SOME ROLE ON THE FRONT PAGE AND FEATURE HER ON MORNING TALK SHOWS?
This should not be a major event — it should be so commonplace that we don’t even notice it. Until that time, WORK MUST BE DONE. THOSE IN POWER NEED TO CHANGE.
In our honest opinion — not that anyone asked — Wharton made a royal mistake with their previous dean appointment — not at all because he was another white man, but because of the individual, who did not in our eyes seem remotely the right fit for the opportunity that they gave him, and results after the fact back that up. They have redeemed themselves with Dean Erika James who from what we know so far is totally awesome — not because she’s Black, but because of how qualified she is, and how perfect she is for this time, to LEAD and to BRING CHANGE. It doesn’t seem like it was that hard for Wharton to find her. They just had to want to look.
Do the admissions offices of these schools want to look now? In 2020, will they look past the previous measures of achievement and success — all dripping with white privilege — and admit more candidates with true potential, regardless of college GPA or GMAT score?
Will we start to see schools be brave, and buck the rankings, and not be so obsessed about their incoming class stats on measures that have never been fair?
There are many, many moving parts in the MBA admissions landscape right now, the at-home administration of GMAT and GRE being another huge one.
THAT GIVES YOU COVER, ADMISSIONS PEOPLE.
Because of availability of test administration this year: YOU CAN CHANGE THE RULES.
The rankings will HAVE to be adjusted for this year and probably next year too — and even if they’re not, THE SCHOOLS CAN DRIVE THIS.
OK, so we’re getting off the soapbox right now.
What takeaways can you, Brave Supplicant, gain from this long post?
Basically, if all you want out of your MBA is more money: Use the BusinessWeek ranking to select your schools! (And be subject to the logical fallacy that going to a school with higher average starting salaries means that YOU will earn a higher salary! There are many, many reasons why some schools’ grads land higher paying jobs, probably the most important being the industry (read: FINANCE) and where those schools were at in their careers before the MBA.)
We’re just GrumpySnark right now.
The wheels are coming off.
What are we going to do?
How are all of us going to respond?
From whence is change going to come?
We’re going to keep yelling into the wind until it does.
In case you’re looking for ways to procrastinate on writing essays, by reading about what happened ten years ago at Columbia University in response to this documentary:
- ColumbiaSpectator – Part 1: ‘Inside Job’ prompts new look at conflict of interest policy – April 13, 2011
- ColumbiaSpectator – Part 2: ‘Inside Job’ sparks three separate reviews of disclosure policy – April 14, 2011
- ColumbiaSpectator – Part 3: After documentary, B-school rethinking ethics – April 15, 2011
- ColumbiaSpectator – B-School faculty approve tougher conflict of interest rules – May 14, 2011
* Here is the announcement in 2019 of the Wharton dean search committee (or here as PDF on our server in case that link goes dead in the future) — and here is how they should have published that information.