Business Schools Explore a Future Beyond the GMAT

As MBA programs waive the GMAT, business schools are debating the future of standardized testing

It is the job of admissions teams to evaluate the thousands of student applications that the world’s leading business schools receive each year. Now, some schools are examining their own use of the GMAT, and other standardized tests required for most MBA programs. 

The move is a bid to attract more applications and increase diversity, but critics say it could lower admissions standards, potentially reduce job prospects and also make it harder to assess prospective students. For the test providers much could be at stake: the Graduate Management Admission Council, which owns the GMAT, made nearly $80m from its test operations in 2018.

Schools began waiving their testing requirements for the 2020 fall semester as the coronavirus outbreak shut exam centers as countries went into lockdown. Even with online tests now available, schools are extending the temporary waivers as they look to make it easier for people to apply for a place next year.

More than half of US business school programs surveyed in this year’s GMAC Application Trends report indicated they waived admission tests. This has sparked a debate in business school circles about the future of standardized testing, which is facing its own test.

Echoing several of his peers, Doug Miller, associate dean for MBA programs at Rutgers Business School, says that the GMAT “could become redundant” — not because standardized testing is void; rather as alternative means of assessment are gaining ground.

Beyond the GMAT

Rutgers waived the GMAT for fall 2020 due to Covid. The school is now considering its own quantitative tests as an alternative to the GMAT, while video interviews demonstrate candidates’ communication skills. Several schools have created their own standardized tests, such as IE Business School in Spain. The Executive Assessment, owned by GMAC, is another alternative increasingly used by some MBA programs.

“The debate isn’t about whether standardized tests are bad at their job, it’s about whether other indicators are just as good,” Miller says, adding that there has been no decrease in the quality of candidates admitted with the waiver policy in place.

Other schools say that GMAT scores may become more important given the competitive admissions process currently, with applications, traditionally counter cyclical, now booming. Longer-term, lower-ranked schools may become test-optional to shore up their applications, should there be a “flight to quality”.

Admissions consultant Chioma Isiadinso sees no future without the GMAT. “As long as there is enough demand for applications, schools will rely on measures to admit or reject candidates.” She says applicants remain obsessed with MBA rankings, some of which factor in GMAT scores and are a proxy for cohort quality.

There remains a strong case for standardized testing in MBA admissions, such as that it demonstrates a student’s readiness for academic rigor. “It’s the standardized test that predicts academic success with optimal clarity,” says Stacy Blackman, another admissions consultant.

Likewise, the verbal score, or a score on the TOEFL for international students, reveals English language proficiency. Standardized tests also provide an objective data point across a varied and diverse applicant pool, and help admissions teams compare candidates across years.

“These tests can also be important for scholarship decisions for some schools. If you consider post-MBA outcomes, some industries look at test scores in the job application process,” says Brandon Kirby, admissions director at Rotterdam School of Management.

Miller at Rutgers adds: “If you compare the career success of those who attend the top few schools, versus those who score in the mid-percentiles and attend smaller programs, there is a clear difference.” According to GMAC, nearly 30 percent of recruiters leverage the GMAT score in their recruiting process.

Typically, these tests require intense study and preparation to do well, which means that only people who are serious about doing an MBA will apply. For prospective students, this process is an opportunity to brush up on quantitative and qualitative skills, to get back into school-mode and reaffirm interest in an MBA. A GMAT score can also help strengthen a candidate’s application and identify strengths or weaknesses.

Some prospective MBA candidates may be dissuaded by the GMAT

The GMAT is not without its detractors. RSM’s Kirby says people with weaker scores but who are nonetheless strong candidates are put off of applying to business school: “Unfortunately, these test have developed a life of their own in the psyche of applicants.”

Isiadinso says: “Many applicants, especially international students, will be disenfranchised given limited access to test centers as a result of Covid-19.”

Business schools that have waivers in place report an increase in applications from women and underrepresented minority students. “Most applicants start preparing for the GMAT months before taking the test, and plan on taking it multiple times if necessary,” says Miller at Rutgers. “Not everyone has the luxury of controlling their workload or other responsibilities to carve out time for such preparation.”

Standardized tests cost money, he adds, and students with greater financial resources can spend more on preparation, such as GMAT tutors, and tend to score better as a result. Graduate programs rarely reflect the diversity of society.  

A spokesperson for GMAC says it offers free preparation materials including full-length exams to help all candidates feel confident they can perform at their best on test day. They also defended the GMAT’s relevancy, noting that GMAC has delivered more than 30,000 exams since April, representing candidates from more than 150 countries who have sent scores to more than 4,000 business school programs globally.

Schools with waivers, however, report increases in applications. The University of Maryland’s Robert H. Smith School of Business has extended its test waiver policy to make it easier for qualified students to apply for an MBA place, says Pasquale Quintero, senior director of full-time MBA programs.

“If we still required the GMAT or GRE as part of our application process, it’s highly likely many of our applicants would have not applied to our MBA programs, putting their career objectives on hold,” he says.

But test optional doesn’t mean that applicants will easily gain admission, says Blackman, the consultant. “Applicants who provide some proof of clear analytical rigor in some format will fare better.”

At the University of Virginia Darden School of Business, which waived the GMAT this year, Dawna Clark, executive director of admissions, insists that the admissions process is holistic: “Everything matters.”

In the absence of a test score, all other aspects of the application take on greater importance: the transcript, the essays, the references and the interviews.

Clark says there are many ways for candidates to demonstrate their academic preparation for an MBA program — additional coursework, professional certifications, undergraduate and graduate study, for instance. “Test scores will continue to have value in this conversation, but they are not the only way for someone to build this case,” she concludes. “And I think schools are starting to realize this.”  

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