Why most prestigious business schools are in the US?

Obviously, the UK and some other European countries have pretty good business schools but none of them are close to the prestige of M7.
In Europe, the most prestigious business schools would be; LSE, LBS, HEC, INSEAD, Bocconi, and some others, but as far as I know other than LSE and LBS none of them are prestigious as M7.
Why is that? Why does a whole continent have less prestigious business schools than the US? and what makes M7 this prestigious and special? is it the networking it provides? maybe the name? or is the education really that different?
Please, share your knowledge.

Comments (16)

Feb 18, 2022 - 12:03pm
hq_life, what's your opinion? Comment below:

This is my personal opinion on how I view these schools*

I look at prestige and the overall rankings based on the school's location/placement/program/overall Uni. But most of this is also impacted by the overall job market. 

For me all 4 of these criteria's play a big role, so if one specific criteria is lacking, the other better is good!

Location/Placement
This goes hand in hand with the job market. U.S. in general is a hot job market. You can find (i.e. MBB) roles in any major city. You want to stay in the South? Well they are available in Austin/Atlanta/Miami/Dallas/etc... Want to stay on the West Coast? LA/SF/SV/Seattle/etc... Want to stay in the Mid-West? Chicago/Detroit/even Cleveland! Atlantic? DC/Philly/Boston/NY!
U.S.A is a huge country and so a lot of companies have offices all over. Even IB - even though mainly in NY has options of Chicago/Houston/SF. 
This is can also be the case with European schools - as long as you know the regional language. Want to work in France? Better know French. Want to work in MBB/IB in Switzerland? Better know German. If you know English - your options are very limited to U.K. and some offices here and there in Europe that make an exception. So, this creates a competitive nature for jobs in the U.K. Now this is another topic! While you can get an MBB role in any location in the U.S., U.K. attracts all english speaking candidates and mostly only has one location! London! The job markets are very competitive. For me - I can't imagine graduates for Msc program from LSE/LBS/HEC-P/INSEAD/Oxbridge/etc... aiming for the same location. I would rather have the peace of mind that the job market is open and that I can land a job. 

Also - Placement depends on a lot of factors. Individuals attending Unis in USA are mostly taking the risk of large tuition & fees costs so they can work in USA. While quite a bit of European markets differ from this. While London is a big target for all European Unis - you see schools like INSEAD/IESE that also place in the Middle East/Asia. So it all depends on your prefer on where do you want to work. Are you willing to go to USA and pay 30-40% tax? More so - Europe with low compensation? Or similar salaries but no tax and hot weather in Dubai? All depends on your preference. 

Program/Overall Uni
You have to look at the schools in M7 vs. Europe
M7 = Harvard/Stanford/Wharton/Booth/Kellogg/Sloan/CBS. 
Main European B-Schools:
MBA: LBS/INSEAD/IESE/HEC-P
MiM/Msc: St Gallen/Grande Ecole schools/HEC-P/IE/Oxbridge/Bocconi/etc.. (Many other great schools).

If you carefully look at this list - Harvard has a great MBA program, but it also has a great overall University name. Same with ALL M7 schools.
Can we say the same about European B-Schools? LBS is mainly a B-school only with no undergrad/other programs/same with HEC-P/INSEAD. So these schools are only known by "Business Students/Students looking to go to these schools"

But almost everyone in the world knows Harvard... Either because of the law school/their Business school/etc... 
This applies to Oxbridge - The overall University name has been carrying the weight of their B-Schools, but since they are relatively new - they have a long way to go. 

I think at the end - If you are attending a B-school, aim for a school in the region that you want to work in - and also specializes in what you want to do. If you want consulting in Europe - INSEAD. IB? - LBS. etc...
 

  • 9
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  • VP in PE - LBOs
Feb 18, 2022 - 12:29pm

A simple answer is also that US the most powerful nation in almost all aspects globally. 
Edit: to the guy below - I'm not American, you bozo. When did Japan lead in hardware? 1990s?

Feb 18, 2022 - 4:59pm
thesunenevrsets9293b, what's your opinion? Comment below:

Lmao what? Financial services is the UK, heavy industry/agriculture in China, technology/hardware in Korea, Japan and Taiwan.

The US leads only by software, certain consumer goods (clothing) and the military-industrial complex.

  • Intern in IB - Gen
Feb 18, 2022 - 12:53pm

Because US business schools draw the best talent from around the world while European business schools almost only attract top local talent 

Most Helpful
  • Incoming Analyst in Consulting
Feb 18, 2022 - 1:21pm

First off, LSE doesn't have a business school.

Secondly, I'd say LBS is at the lower end of M7 prestige and that INSEAD is roughly equivalent to it for MBAs. Oxbridge, HEC, Imperial, Bocconi etc. are probably equivalent to a T15 or T25.

The main reason why this is is that MBAs aren't really prized in Europe, and traditionally they've been far less needed for advancement than in the US. For continental Europeans, many do at least one, if not two master's, and there's therefore no need to come back later. The UK situation is slightly different but the pattern still holds. This is one of the reason why European MiM and MFins are so prevalent, and generally competitive. Oxford MFE average GMAT is on par with HSW MBA students (for 2021, average for entering students is 754). Yet Said is generally regarded as a rubbish business school because of its sub-par MBA. The exact same is seen at Cambridge, Imperial etc where the universities are stronger than the business school (the parallel would be Yale SOM) with the exception of a few strong flagship courses at the post-UG master's level. This is, for what it's worth, why LSE have never set up a business school despite toying with the idea. The best European students don't need a reset, generally have slightly more sustainable WLB than their US peers (PTO, slightly better hours) so less needing of a break, and don't want to go back for an MBA.

Additionally, post-MBA recruiting options just don't exist to the same quantity and quality. MBB do recruit, as do a few tech firms, but many banks have no formal programs. And corporate dev/strategy jobs are far less prevalent with far lower earnings, as the MBA isn't prized. Slight exception here for the Nordics, where apparently those MBA corporate jobs do exist according to friends from there. 
 

In summary, the best European students have nothing to gain from going to a European MBA. Therefore the best European business schools attract a lower quality of students than the best US schools. Ergo, the cycle continues. And that's not necessarily a bad thing. 

  • Consultant in Consulting
Feb 18, 2022 - 4:01pm

This is 100% spot on

Feb 20, 2022 - 1:26pm
jarstar1, what's your opinion? Comment below:

This the exactly it. And you can see the same thing in certain sectors in America, for example real estate 15 years ago wasn't nearly institutionalized the same way it is today, almost no one recruited for MBAs at top real estate shops, real experience and upward promotion was the only thing that mattered. That is still a thing today, real estate still isn't a heavy MBA recruiting industry but the big boys now all have MBA recruiting programs and the MBA is getting broader respect in the industry. 

  • Consultant in Consulting
Feb 18, 2022 - 11:05pm

I wouldn't say that all 7 are. But Stanford, Harvard, and Wharton (in that order) are by far easily the top three business schools in the world. 

Feb 21, 2022 - 2:44am
joeeckel582, what's your opinion? Comment below:

I think that the USA is the country of huge possibilities and I hope there's no person who can disagree this statement. As a result, government and other authorities did everything to support this image. Therefore, the prestige of US buiness schools is known evverywhere. Moreover, let's not forget that the brightest minds from all over the world go to the USA in earch of some new opportunities, and it also answers your question.

  • Incoming Analyst in Consulting
Feb 21, 2022 - 4:04am

While it's true that government support definitely helps its business schools (similar to why France does well with business schools relative to its general universities), this isn't really a good answer for 'why they're better than everywhere else'. 
 

It's not the case, in general, that US universities are head and shoulders above other nations. The UK is probably more competitive for universities relative to its population size (in research-heavy rankings, typically three of the global top ten are British), and I'd also add Switzerland to that list too (ETH is a solid top ten university, EPFL is also very strong). Similarly, places like Australia, Canada, the Netherlands, etc. have very strong university systems, albeit less really 'elite' ones. The disparity between the US and literally everywhere else is much more pronounced for business schools than the education system in general. 
 

For what it's worth, your argument makes more sense for tech schools than it does for business schools. The huge 20th century government money that went into Stanford/Berkeley, CalTech, Princeton, and MIT and their surrounds is why the US was able to overtake Britain/Germany after the war (also thanks to some deals with a very desperate Britain to give away their tech advantage in the Tizard Mission). Internationally, the US still holds a huge advantage in STEM/tech research: Oxbridge have got better but only really challenge in the biomedical sphere, Imperial and ETH are strong but comparatively underfunded, and Tsinghua is quite some way behind at the moment. Places like TUM and Delft just don't have the money to compete with the cutting-edge stuff that these post-war, government-funded ecosystems in the US allowed. If you look at France, they've recently set up the very well-funded Saclay to explicitly challenge MIT under a very similar model as to how that institution gained its reputation. 

Feb 23, 2022 - 10:25am
joeeckel582, what's your opinion? Comment below:

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