The ranking decoded

The FT Masters in Management report ranks the top 65 programmes in general management for students with no prior work experience. Established in 2005, the ranking aims to give a thorough assessment of the programmes submitted by business schools worldwide. It also looks at the schools themselves and their alumni.

Two sets of online surveys are used to compile the results, once business schools have shown they meet the criteria for participation. The first survey is completed by the schools themselves, and the second by alumni who graduated from the respective programmes three years previously. So, this year, the targeted alumni were those who graduated in 2007.

For schools to remain eligible, a 20 per cent response rate is required from alumni, with a minimum of 20 responses for schools with fewer than 100 alumni in the graduating class.

Schools are asked to alert alumni to the ranking prior to the start of the process. However, once the process is underway, schools are not allowed to contact their alumni directly or encourage them to participate in any other way.

Competition is fierce for the top spot. In total, 71 programmes were submitted for evaluation this year, eight of which were new participants. Meanwhile, a total of 4,567 responses were received from alumni.

The alumni survey also allows students to evaluate the Cems MiM (masters in management) degree, if they have participated in this. The Cems degree is awarded to students through a global alliance of 27 business schools, in addition to the degree of their alma mater.

The data from the alumni questionnaires are used to determine six of the 16 criteria: weighted salary (US$), value for money, careers, aims achieved (per cent), placement success and international mobility.

The figures in the first column, titled “Salary today (US$)”, are also based on the data from alumni questionnaires, but these figures are published for information only.

To calculate the figures in the “Weighted salary (US$)” column, data supplied by alumni working in the non-profit and public service sectors, or who are still full-time students, are excluded first. Then purchasing power parity (PPP) rates supplied by the International Monetary Fund are used to convert the remaining salary data to US dollar figures.

PPP rates are currency conversion rates that iron out differences in purchasing power between different currencies.

After this conversion, the very highest and lowest salaries are excluded before the average salary is calculated for each school.

For larger schools (those with more than 50 alumni responses) there is one further stage in the ranking process: the average salaries are weighted to reflect variations in salaries between different employment sectors.

The weights are derived from a breakdown of the sectors in which alumni are working. Average salaries within sectors are calculated for each school. The overall sector weights are then used to calculate the proportion that each sector salary average will contribute to the total average figure for a school.

The remaining 10 criteria are calculated using data from the school questionnaires.

After all calculations have been applied to the data for each of the different ranking criteria, the results are ranked using Z-scores on a column-by-column basis. That is, for each criterion on the table, a separate set of Z-scores is calculated. Z-scores take into account the differences between each school and the spread of scores between the top and bottom school.

The Z-scores in each field are then multiplied by the column weights (see online table key) and these results are added to give a final score for each school. This final score is presented as the school’s overall rank for 2010.

Criteria that contribute to the ranking have underlying Z-scores, but in the table the data are shown as US$ equivalents, ranks, percentages or, in the case of languages, the number of additional languages required on graduation.

The five columns at the end of the table – “Course fee (local currency)”, “Course length (months)”, “Number enrolled 2009/10”, “Relevant degree” and “Company internships (%)” – do not contribute to the ranking. The data are supplied only to inform readers.

Our interactive online ranking shows this year’s results alongside tables dating back to 2007. For more detail, go to: http://rankings.ft.com/businessschoolrankings