Second Annual MBA Rankings - A Summary for AMBAC

Second Annual MBA Rankings - A Summary for AMBAC Second Annual MBA Rankings Ten Schools Grads Have Far Higher Job Prospects, That s What MBA Graduates Care Most About, But Many MBA Graduates and Recruiters Are Disappointed A Summary for AMBAC 1

Cross-National Survey of University Recruitment and Marketing Officers COMPAS Inc. Public Opinion and Customer Research October 7th, 2014 2

1.0 Profile of AMBAC Members The study of the reputation of Canadian MBA Programs included 125 members of the Association of MBAs in Canada (AMBAC). In terms of geographical representation, the majority of respondents (43%), were employed in Ontario and there were no respondents from the Atlantic region. 45% of AMBAC respondents reported being involved in the hiring process with 9% mainly involved in hiring and 36% providing advice in the hiring process. MBA is the highest level of education for the absolute majority of AMBAC respondents. Finance and accounting, management consulting, as well as mining, quarrying, oil and gas are the top three sectors of economy, in which AMBAC respondents are employed. Slightly more than a half of the AMBAC sample work in large organizations with 500 and more employees. Half of the sample are recent graduates report graduating in 2014 or 2015. Table 1: Region of Work 1 % Atlantic Canada - Quebec 18 Ontario 43 Prairies 28 B.C. 11 Table 2: Role 2 % Not involved in the hiring process 55 Providing advice to the hiring process 36 hiring. 1 Do you work mainly in: 1) Atlantic Canada, 2) Quebec, 3) Ontario, 4) Prairies, 5) B.C.? 2 Would you describe your role as: 1) not involved in the hiring process, 2) providing advice to the hiring process, 3) mainly hiring, 4) only 3

% Mainly hiring 9 Only hiring - Table 3: The highest level of education % High school graduate or less - Some post-secondary - College degree or equivalent - Bachelor s degree 2 Master s degree 2 MBA 90 Doctorate 6 Law degree, medical degree, or equivalent 1 Table 4: Sector 3 % Real estate, rental, and leasing 2 Manufacturing 2 Mining, quarrying, oil and gas 12 Construction 2 Healthcare and social assistance 9 Public administration (government) 3 3 For statistical purposes, please indicate the sector of the economy in which you work primarily. 4

% Finance and accounting 14 Insurance 1 Education 5 Wholesale 1 Retail 3 Professional, scientific, and technical services 10 Transportation and warehousing 1 Information and cultural industries 1 Waste management - Utilities - Accommodation and food services - Agriculture, hunting, forestry, and fishing - Arts and entertainment 2 Advertising and public relations 3 Legal - Human Resources 1 Management consulting 14 Other 14 Table 5: Size of organization 4 % 500+ employees 54 300-499 employees 4 100-299 employees 6 4 Please indicate the size of organization in which you are employed. 5

% 20-99 employees 14 Fewer than 20 22 Table 6: Year of Graduation Year % 1972 1 1983 2 1987 1 1991 1 2001 1 2002 2 2005 1 2006 4 2007 2 2008 2 2009 4 2010 2 2011 3 2012 10 2013 17 2014 40 2015 10 6

2.0 The Top Ten Toronto, Western, Queen s, York, McGill, UBC, HEC, McMaster, Alberta, Calgary In alphabetical order, McGill, Queen s, Toronto, Western, and York retained their top five positions in the Canadian Business/COMPAS MBA reputation survey. The reputation of each program was measured in terms of the propensity of the graduates to be hired for jobs nationally and, separately, for jobs in the regions. The main changes in the rankings since last year are the rise of HEC Montréal, Alberta, and Calgary into Top Ten national positions. Laurier, Dalhousie, and Ryerson edged down while remaining among the top 15. 5 Like other university programs, MBA schools may benefit from the halo effects of their home universities and home provinces. We don t know to what extent the rise of Calgary and Alberta MBA schools reflect their own brand achievements and/or to what extent their MBA schools benefitted from the halos of their home campuses and provinces. The top 4 or 5 are close enough in scoring that one cannot be absolutely sure of the relative position of each. Even the top 10 are somewhat close to each other in scores. But there is no doubting that the top scoring programs whether top 5, top 10, or top 15 are dramatically ahead of the bottom 5, 10, or 15 among Canada s 41 MBA schools. The bottom eleven MBA programs score less than 3.0 on the 7 point COMPAS reputation index. 6 The vast differences in scores between high and low scoring programs probably help explain why job recruiters and MBA graduates both say that brand matters a lot, as discussed below in section 3.0. The reputation scores are constructed from the responses of HR recruiters who are members of the Association of Executive Search Consultants (AESC), including BlueSteps, plus MBA graduates who are members of the Association of MBAs in Canada (AMBAC). Rankings exclusively based on evaluations by HR recruiters showed only few slight differences: Western and Toronto shared the leadership position, McGill outranked York, McMaster scored slightly higher than HEC Montréal and Calgary was slightly ahead of Alberta. 5 The survey asked respondents the following question: Imagine that you have to construct a scoring card for a nation-wide employer in your sector shortlisting recent MBA graduates. On a 7 point scale where 1 means low ranking and 7 means high ranking, what score would you assign for candidates from each of the following MBA programs? Please skip over programs with which you have no familiarity. 6 Reputation is defined as the score given by respondents for their willingness to hire graduates of the given program. Respondents provided a score for each university on a scale from 1 to 7 with 7 being the highest or best score. 7

Table 7: Rankings of MBA Programs by HR Recruiters Rank MBA Programs 1-2 University of Toronto (Rotman School of Management) 1-2 Western University (Ivey Business School) 3 Queen's School of Business 4 McGill University (Desautels Faculty of Management) 5 York University (Schulich School of Business) 6 University of British Columbia (Sauder School of Business) 7 McMaster University (DeGroote School of Business) 8 HEC Montréal 9 University of Calgary (Haskayne School of Business) 10 University of Alberta 11 Concordia University (John Molson School of Business) 12 Dalhousie University (Rowe School of Business) 13-17 Royal Military College of Canada 13-17 Ryerson University (Ted Rogers School of Management) 13-17 Simon Fraser University (Beedie School of Business) 13-17 Université Laval 13-17 Wilfrid Laurier University 3.0 Recruiters and MBA Graduates Insists that School Brand Means a Lot The reputation of a program matters immensely for the career prospects of MBA graduates. The value of an MBA from a top branded program is perceived to be much higher than the value of an MBA in general. Therefore, obtaining a Respondents were asked to score the value of an MBA in general having and, separately, the value of a MBA from a top branded program on a 7 point scale where 7 means very high and 1, the opposite. The average scores emphasize the difference in the value: 4.0 for MBAs in general vs. 6.0 for top branded MBAs. 8

MBA may not result in much added value in terms of better employment opportunities unless it is received from one of the top ranked institutions. 4.0: The Big Four Queen s, Toronto, Western, and York Are Both National and Regional Leaders 4.1. National Leaders Tend Also to Be Regional Leaders MBA programs from the Big Four Queen s, Toronto, Western, and York are not only national but also regional leaders. In addition to excelling nationally, they made it into the Top Five when respondents scored university MBA programs for the suitability of their graduates for being hired in each region. 7 4.2. Home Turf Advantage Everywhere Compared to their national rankings, MBA programs tend to do better on home turf than nationally. The phenomenon of Favourite sons appears to be a pattern almost everywhere. For example, HEC and McGill s business school do especially well in Quebec while UBC does especially well on the west coast. The University of Calgary s MBA School does well on prairies, as does those of UBC and SFU. 4.3. York and U of T as Possible Exceptions York and the University of Toronto may be the major exception to the tendency of recruiters and MBA graduates to score more highly home turf universities than those from out of province. York did less well in its home province of Ontario in the competition for reputational lead in the province than did York in every other region. York s MBA graduates were among the top five schools graduates to be hired for provincial jobs in Atlantic Canada, Quebec, the Prairies, and BC but not Ontario. TOP FIVE IN REGIONS ATLANTIC: McGill, Queen s, Toronto, Western, and York (in alphabetical order). QUEBEC: HEC Montreal (#1), McGill (#2), followed by Queen s, Western, and York (in alphabetical order). ONTARIO: McGill, Queen s, Toronto, Western (in alphabetical order) and Ryerson (#5). PRAIRIES: McGill, Queen s, Toronto, Western, and York (in alphabetical order). BRITISH COLUMBIA: Queen s, Toronto, UBC, Western, and York (in alphabetical order with a slight possible edge of UBC). 7 The sample of respondents was divided randomly in five equal parts and the subsamples were randomly assigned the questions about a candidate placement in different regions: Suppose you were shortlisting MBA candidates for a post in Atlantic Canada [Quebec Ontario Manitoba, Saskatchewan, or Alberta BC], what score on a 7 point scale would you give to each of the following? 9

We do not know to what extent respondents focusing their minds on Ontario saw York MBAs as not quite as less suitable in an Ontario than a national setting. We do not know what York would do better out regional settings outside Ontario. Our only thought is that York s business school may suffer slightly from possibly greater awareness in Ontario of the University s somewhat turbulent recent past. We likewise have difficulty explaining why the University of Toronto s School of Management would do less well in a Quebec setting. Perhaps historical inter-city rivalry is a factor. 5.0 Job Opportunities a Disappointment but Not a Total One Although Recruiters and AMBAC Members both see real job and long-term income value for MBA graduates, they also express disappointment with MBA programs. They feel strongly about needs for improvement. All respondents place the highest expectations into better understanding of business environment, enhanced business networks, better and more job opportunities, as well as long-term income improvement. They indicate the same features as priorities for improvement. In terms of actual delivery, MBA programs underperform on all features with AMBAC members being slightly more negative than recruiters. Table 8: Expectations, Delivery, and Priorities for Improvement Expectations 8 9 Priorities for Delivery Improvement 10 HR AMBAC HR AMBAC HR AMBAC Better understanding of business environment 6.1 6.1 5.4 5.4 6.3 6.3 Long-term income improvement 6.0 6.2 5.2 4.9 6.3 6.3 Better job opportunities 6.0 6.0 5.3 4.7 6.3 6.3 More job opportunities 5.8 6.0 4.9 4.5 6.2 6.1 Enhanced business networks 5.8 6.1 5.2 5.2 6.1 6.3 8 The question: To what extent do you expect MBA programs to deliver on each of the following features? (Expectations). On a 7 point scale where 7 means expected a lot and 1, the opposite. 9 To what extent do you think that MBA programs deliver on these features? (Delivery) 10 To what extent should MBA programs deliver on each of these features? (Priorities) 10

Expectations 8 9 Priorities for Delivery Improvement 10 HR AMBAC HR AMBAC HR AMBAC Better econometric or other methodological tools 5.7 5.6 5.3 4.9 6.1 6.1 Greater effectiveness at work 5.3 5.2 4.9 4.8 6.0 5.7 Better understanding of the industry 5.2 5.3 4.9 4.7 6.1 5.7 Immediate income improvement 4.7 4.9 3.8 3.7 5.0 5.2 The largest discrepancies between what respondents expected and how they perceive MBA programs to be delivering include more and better job opportunities and immediate and long-term income improvement, as well as better understanding of business environment for recruiters. AMBAC members show comparatively higher level of disappointment. 11

Job opportunities were sources of the greatest disappointment and were also areas where respondents believed that MBA schools needed major improvements. These and other disappointments are evident in the verbatims below. 12

VERBATIMS FROM MBA GRADUATES ON THEIR OWN PROGRAMS Almost everything, but most of all job prospects after completion. Canadian MBA job market is really tiny. Employers outside of consulting and a few financial services jobs do not care about the MBA degree. I was so surprised when we did not have a career placement for MBAs. we had to compete with other BBA and other graduates. Company recruitment. There are some really skilled students in the MBA but companies focus on BComs with zero experience due to costs. The gap in terms of the knowledge that company recruiters have about the difference that an MBA could make to their organization. Queens is a top tier university so I expected that employers would jump at the opportunity to hire me as a result of being an MBA from Queens. That was not the case. The career services office was not strong and I feel needs to be improved with all the money we pay. Essentially, the MBA programs need to invest more [to] support their grads in getting jobs more! Worst part of the university is their employment department. College doesn t take responsibility for low jobs placement post MBA.... No connections with employers to increase job placements. [a lack of] networking with professionals. [a lack of] relationships with business community. Practical skills training e.g. negotiation. Generally, too theoretical, doesn't adequately teach how to operate in the politics of a real business environment. Too many people pass the MBA programs who should not. Too easy to buy an MBA and lean on classmates if lazy. Too many people in the program. MBA is starting to feel like a secondary undergrad. Too many people are getting theirs. Would have been nice to be able to specialize my MBA. It was a general, same for everyone. Need more case studies and real world examples. Lack of hard skills - i.e. strategic planning, business case development, etc. Lack of lateral thinking, lack of focus on values and creativity. In such a competitive market, I think tuition fees could be more affordable. They are way too high nearly eliminating the potential for a quick rate of return. 13

VERBATIMS FROM RECRUITERS ON PROGRAMS IN GENERAL Career and development office falls short. [a lack of] Career focus. They (MBA), do not increase earning power. Majority of the programs lot fall short in networking and alumni recruitment support for the post-graduation job search. If it is all theory-based or individuals don't come with practical experience along with the MBA, it just seems like another degree. I feel the way they are becoming increasingly intense on individuals family life, there also needs to be some better options for individuals to complete courses and not be fully consumed by work/study. They don't have enough students with work experience prior to going to B school. In many cases, lack of meaningful practical experience and, often, an inability to move beyond analysis and argument. Too much theory, and no sense of business practicality. Some repetition in the material taught between courses. [a lack of] Real time management expertise. Focus too much on marks, and not on experience. They have become commoditized and the research component (by dissertation) rarely has any real life value in the true business sense. [a major lack of] Connection to business community, low involvement in community events. Lack of understanding on impact of corporate culture on decision making, and the general lack of empathy with colleagues at work. Not enough place for sustainable development and sound financial practices. [a lack of] International-ness of the courses. It's a for-profit business so everyone passes. It looks bad if they don't. 14

6.0: Recruiters Support AMBAC s Accreditation Initiatives 6.1. Work Accomplishments vs. Knowledge Testing Recruiters are supportive of the accreditation scheme with a focus on individual work accomplishments, as the verbatims, below, show. VERBATIMS FROM RECRUITERS ON LAUNCHING THE ACCREDITATION SCHEME THAT FOCUSES ON INDIVIDUAL WORK ACCOMPLISHMENTS AS OPPOSED TO KNOWLEDGE TESTING This would provide an additional benchmark outside of your standard metrics. It would provide a consistent baseline to measure prospective candidate against. Viewing their accomplishments would be extremely helpful. Experience, not GMAT scores. I know people with 750+ GMAT scores. They could memorize anything, but they were also dumb as rocks. The relative success of each candidate in their post-mba role. Whether they are a good representation of their schools high or low reputation. It can focus more on the growth trajectory in the careers, as well as individual contribution to their company and society. It will better align work experience with practical MBA knowledge rather than learning without any basis or grounding in the real world. It would help specialization for individuals and would show where a candidates strength lies. The ability to identify area of expertise. Look at experience and maturity versus age. There should be different thresholds set for admission. MBAs are prolific and the admission criteria is not uniform. By acknowledging experience over knowledge. As an executive search firm, we don't examine MBA candidates, per se. We evaluate executives, some of whom have MBA degrees. 15

6.2. Recruiters See the Value of MBA Accreditation along Two Career Tracks Recruiters are positive about MBA accreditation along both career tracks, i.e. the leadership track and the specialist career track. 11 The majority of respondents find the accreditation valuable. The average scores are the same for the value of accreditation in leadership and specialist career track: 5.3 on a 7 point scale, as shown in Table 9 below. Table 9: The Value of MBA Accreditation Mean (average) Percent scoring 5-7 on a 7 point scale Accreditation in leadership 5.3 73 Accreditation in specialist career track 5.3 69 11 Respondents were asked to score the value of accreditation from the MBA Association: Imagine that recruiters are comparing two seemingly identical MBAs except that one has accreditation from the MBA Association and the other does not. On a 7 point scale where 1 means no possible value and 7, much potential value for recruiters, what score might you give for the value of 1) accreditation in leadership, 2) accreditation in specialist career track. 16