GMAT: What Is It Good For

As the 2010-2011 business school application cycle winds down, the next generation of applicants – or perhaps more aptly, supplicants – is preparing for their own trip through the business school application gauntlet, which usually includes taking a standardized admissions test. So, in the hopes of benefiting future test takers, I’m going to share my experiences with and thoughts on the Graduate Management Admission Test (GMAT) in the coming weeks/months; plus, it’ll distract me from anticipating who-knows-what blowing in from the Windy City next week.

This post will begin the series by setting up the GMAT in the context of the business school admissions process and emphasizing the ability of applicants to significantly improve their odds of being admitted to an MBA program by doing well on the exam. I’ll leave the debate about the GMAT v. the Graduate Record Examination (GRE)whether current standardized tests put certain groups at an unfair disadvantage and other merits or faults of standardized tests in general for another time, since the bottom line is that business schools currently value (highly) a good GMAT score, rightly or wrongly, and so should anyone who wants to be admitted.

A GMAT score is just one of many things a business school admissions committee evaluates to predict how an applicant will perform in business school, along with essays, prior academic performance, work experience, extracurricular and leadership activities, recommendations, etc., but it is an important one, for a number of reasons. Although admissions decisions supposedly involve more art than science, when an admissions committee has thousands of applications it needs to review in a short amount of time, it’s convenient to have quantitative measurements that it can use to quickly compare applications, like a GMAT score or GPA.

But, unlike a GPA, the GMAT is the only measure of all applicants that has been administered under similar conditions (e.g., exam structure, time limits, testing equipment) and has been evaluated in a consistent, reliable manner. Further, on the official score report you receive after taking the GMAT, it states that the median correlation between GMAT scores and first-year MBA grades is 0.51, compared to a median correlation of 0.28 between undergraduate GPA and first-year MBA grades. So, while the GMAT is far from a perfect predictor of first-year MBA performance, it appears to be a better predictor of MBA academic performance than undergraduate grades, which may vary among different schools, majors, teachers, etc.

Since Kellogg is nice enough to share data on the GMAT distribution of its applicants, it is pretty easy to estimate the chance of acceptance to Kellogg based solely on GMAT score. The previous link lays out the premise behind the calculations, so I’ll just show the back-of-the-envelope results (updated to reflect Kellogg’s Class Profile for 2010 Entrants, which includes data for the MMM, JD/MBA and 2-year and 1-year MBA programs):

GMAT Score

Total Applicants* (a) Enrolled Students* (b) Admission Offers**
(c)

Acceptance Rate
(c/a)

Up to 640

699 (12%)

41 (6%)

65

9%

650-690

1340 (23%)

139 (20%)

221

16%

700-740

2796 (48%)

362 (52%)

574

21%

750-800

932 (16%)

160 (23%)

254

27%

*Total applications and enrolled students are 5,826 and 697, respectively, but differences between those numbers and the column totals above are due to rounding errors
**Uses 19% as the total acceptance rate (i.e., 0.19 * 5,826 total applications = 1,106 total acceptances) and assumes an even yield across GMAT scores (i.e., b/c)

As you might expect, the higher your score, the higher your chances of being admitted (and the table above likely understates those chances for the highest scores). While the reason that applicants with a higher GMAT score appear to have a better chance of admittance might be because they tend to have better undergraduate grades or other selling points, let’s just say it’s probably better to be in the range of GMAT scores that has the highest acceptance rate. It’s also not a stretch to think this plays out similarly at other top schools as well, where the average GMAT scores of applicants often exceed 700.

Particularly for those applicants that are applying in the upcoming application cycle, the GMAT is one of the few remaining aspects of their application under their control – by now, grades, work experience and extracurricular activities are largely set (although it is important to note that the way they are described in an application is up to the applicant). Fortunately, the GMAT is a test that can definitely be improved on, given the right mindset and study plan. And, by planning early, it allows the focus to be on putting together a compelling application package later.

Although different strategies work for different people, hopefully the way I came up with mine and the various considerations I looked at will help others make the decisions that work best for them, leading to a better GMAT score. In the meantime, on a completely unrelated note, I leave you with these thoughts, courtesy of Mr. Edwin Starr: YouTube link.

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4 Responses to GMAT: What Is It Good For

  1. Pingback: Fridays From the Frontline « Clear Admit: MBA Admissions Consultants Blog

  2. DK says:

    JS, although I’ve enjoyed many of your other posts, this is an incomplete and somewhat misleading analysis. It is not surprising that applicants with higher GMAT scores have significantly higher acceptance rates because odds are that an applicant with a 750 has a much stronger application than an applicant with a 640. The GMAT alone is not a strong predictor of admission and must be considered along with the rest of an application.

    • JustShip says:

      DK, agree with you that a GMAT score should be, and is, evaluated with the rest of an application. Perhaps I should have made clearer that this post is more about an applicant giving herself the best odds of admission by scoring as high as possible on the GMAT – to provide context to the related GMAT preparation posts to come in the near future – and less about using the GMAT score to predict admissions chances. Thanks for your input.

  3. Arun says:

    Though I am a GMAT instructor (www.crackverbal.com) I will have to agree with JustShip here.

    The problem is GMAT is a standardized test that does put many personality types at disadvantage. People with this personality type are not necessarily bad leaders or managers. However GMAT tends to be a bit harsh on them. There are many who find the math tough because in the “real world” they are never required to know coordinate geometry. Or someone from India who speaks 2-3 languages on an average should learn the American way of speaking English to apply to an MBA program in Europe!

    Arun

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