American investor Warren Buffett, CEO of Berkshire Hathaway Inc. and Eitan Wertheimer, Chairman of of Israeli company Iscar, visited the IMD business school campus in Lausanne, Switzerland, in May 2008, to celebrate 20 years of family business research and education at IMD. Warren Buffett explained how a 1¼ page letter was enough to convince him to open up investments outside the US by making a deal with ISCAR - - “I usually know within five minutes if I’m going to make a deal. The letter gave the basic facts and told me something about the person who ran it – I could see in my mind a man with a passion for his business.”

IMD of Switzerland has been ranked the first in the world in the Economist Intelligence Unit's latest survey for full-time MBA programmes. It is the first time the Swiss school has topped the annual ranking. IMD took the number one slot from the University of Chicago's Graduate School of Business, which drops to third, while Spanish school IESE claims second place. Stanford and Dartmouth College's Tuck School of Business round off the top five. The highest ranked Asian school was Hong Kong University of Science and Technology in 11th. Dublin's Michael Smurfit Graduate School of Business gets a 40th ranking.

IMD is one of the most international business schools in the world. Ninety-seven percent of its students come from abroad—with around half of those from outside of Europe. One of the reasons for the school's triumph has been the success of its careers placement service. IMD students can expect to earn a basic salary of US$130,000 a year on their graduation—compared with pre-MBA salaries of US$79,000.

Indeed this year was a bumper year all round for MBA salaries. Columbia in New York, for example, reported an average leaving salary of US107,000, while London Business School's graduates can expect US$120,000-a-year. But with the banking crisis leading to job losses in financial centres around the world, this might be the best it gets for business school graduates for some time.

Bill Ridgers, editor of Which MBA? commented:"The financial services industry has for some time competed with consultancies to be the leading recruiter of MBA graduates, offering huge salaries along the way. But with recent failures, a lot of talented bankers are suddenly out of a job. It is likely that current students are likely to find themselves graduating into a buyers' market and salaries will start to reflect this."

Ratings by category
When surveyed, EIU says students consistently tell say that the most important reason they chose to take an MBA was in order to open new career opportunities. Given the emphasis that full-time students put on schools’ careers services it is no surprise to find that this is one of the strong points of most of the top schools in the ranking. It is perhaps the area that receives the most vocal criticism from students when it does not meet their high expectations, but when managed well it can set a school apart. At IMD, for example, 99% of students were in a job within three months of graduating, a fact that no doubt helped the careers service receive a very high rating from students. It was a similar story at IESE and Chicago, both of which score highly in the open new career opportunities category.

One reason that the top-rated schools have impressive careers statistics is that they are well resourced. However, it is also true that the students from the schools with the highest academic standard will automatically draw the attention of the best employers. What sets the top-rated schools apart is that they do not rely merely on their reputation to place students, but couple this with a tireless quest to bring the best employers to the school.

EIU says bringing together the top companies and the brightest students inevitably leads to some impressive salaries. European schools have recently had the upper hand when it comes to the salaries of their graduates. This is partly because their students are generally older with more work experience. However, despite a tough economic climate, many US schools have seen an increase in the salaries of their graduates. Twelve schools now boast average salaries over US$100,000, with Stanford leading North America at US$112,000.

But this is still well behind Europe’s tally of 21 schools. At IMD, for example, graduates can expect to earn a basic salary of US$130,000. Even at some lower-ranking European schools, such as Strathclyde or Audencia, students can expect to out-earn their more prestigious counterparts at Stanford or Harvard.

European schools also do well in the networking stakes, often because their alumni are more international. IE, for example, has alumni associations in 49 countries. Even relatively young European schools, such as Cambridge, already have an impressive reach across the world. In contrast, many US schools’ alumni are yet to open a single overseas branch.

What the US schools are generally much better at, though, is keeping their alumni active once they have left the programme. In this they are helped to some extent by having graduated more MBAs each year for a longer time, meaning they have a bigger alumni base. But it is still an impressive achievement to keep so many involved. Wharton, for example has over 80,000 active MBA alumni and Stern (New York) has over 50,000.

The ranking’s distinctive features and methodology
Over the past 20 years, the Economist Intelligence Unit has regularly surveyed MBA students about why they take an MBA. Four factors consistently emerge:

• to open new career opportunities and/or further current career;
• personal development and educational experience;
• to increase salary;
• the potential to network.

These factors are the basis for the ranking. The Economist Intelligence Unit ranks full-time MBA programmes on their ability to deliver these elements to students. It weights each element according to the average importance given to it by students surveyed over the past five years.

The Economist Intelligence Unit ranking differs from other rankings in several important areas. It is:

• More student-centric. It measures the way schools meet the demands students have of an MBA programme.
• All-embracing. It is based on detailed questionnaires completed by business schools and around 20,000 current MBA students and graduates around the world. Key numerical data (such as average GMAT scores) are combined with subjective views from students and graduates (such as their assessment of a business school’s faculty).
• Global. It allows direct comparison of MBA programmes around the world.
• Regional. It compares MBA programmes in three regions: North America, Europe, and Asia and Australasia.
• Flexible. Programmes may be ranked in many ways, producing, for example, tables of the top ten US or Asian and Australasian schools by GMAT score or the top ten US and European school by percentage of foreign students. This facility is available at www.which-mba.com.

To qualify for inclusion in the Economist Intelligence Unit rankings, the schools with full-time MBA programmes that responded to the survey had to meet various thresholds of data provision, as well as attaining a minimum number of responses to a survey gauging the opinion of current students and alumni who graduated within the last three years. These were set as a proportion of the annual intake of students to the programme as shown below.

Data were collected during spring 2008 using two web-based questionnaires, one for business schools and one for students and recent graduates. Schools distributed the web address of the latter questionnaire to their own students and graduates. Around 20,000 students and graduates participated. All data received from schools were subject to verification checks, including, where possible, comparison with historical data, peer schools and other published sources. Student and graduate questionnaires were audited for multiple or false entries.

Memory has been built into the rankings by taking a weighted average of 2008 (50%), 2007 (30%) and 2006 (20%) data to provide a rounded picture of the school. Sudden changes in the situations at a school, which might not produce an immediate increase in MBA quality, are thus reflected gradually, much as the improvement would affect students.

The table below summarises the measures used to calculate the rankings together with their respective weightings. Student and alumni ratings make up 20% of the total ranking and 80% is based on quantitative data provided by schools. The statistical methodology adopted for the ranking gives each business school a unique score (known to statisticians as a z-score). Unlike some other rankings, the Economist Intelligence Unit does not include any “equal” schools (for example, four schools ranked equal sixth followed by one ranked tenth). However, it should be noted that differences between some schools might be very slight.