MBA Applications: How Important is the GMAT?

MBA Applications: How Important is the GMAT?

Although the GMAT is just one component of an MBA application, it seems like it plays an outsized role. Just how important is the GMAT?

A poor GMAT score is decisively the biggest killer of applications to MBA programs. For many aspiring students, getting a score of 700 or more can be the difference between attending a top business school, or not. GMAT scores are also linked to scholarship funding and some employers use them to assess job candidates.

However Dennis Yim, director of academics at Kaplan Test Prep, says that students should not be blinded by GMAT score averages. "By definition, half of students admitted will fall below the median GMAT score for each school," he says.

Duke University's Fuqua School of Business last year received 3,796 applications for its prestigious MBA course. It admitted just 849. Russ Morgan, senior associate dean, says that the GMAT is important but he takes a holistic view of each application. At Fuqua, 'middle 80 percent' GMAT range-that is, the GMAT range for the majority of incoming MBA students-is between 640 and 750. "Test scores like GMAT and GRE are an important metric, but cannot tell the whole story," he says. "They are just one component of the application."

Morgan says that that the GMAT does test academic fit and readiness for a program. "That's critically important in being able to predict success academically." However, what the score can't assess is the cultural fit and a person's leadership potential, which can help them secure a place.

"What we are looking for in the application process is not only a commitment to self-improvement but a desire to also make other people better," Morgan adds. "We are also looking for a genuine belief that business can be a force for good in the world. You can't assess that from a test score, so we place tremendous value on the interview process, as well as our essays."

Ballooning GMAT scores mean increased competition

Most business schools sing a similar tune; claim that they do not require a minimum GMAT score for entry to their MBA courses. But some probably do.

Stacy Blackman is a leading admissions consultant who has helped people gain admission to Harvard Business School, Stanford and Wharton, among other schools. She says that because GMAT scores play a role in MBA rankings and since prospective students often judge a school on how they perform in rankings, "admissions teams place an unnecessarily high value on test scores."

It would seem that prospective business school students are heeding Blackman's advice; data suggest they are getting better at the GMAT. According to The Economist, which collects GMAT data to help create its MBA rankings, the average GMAT score two decades ago was 688. In 2014 it had increased to 722. Stanford reached a new record GMAT average of 740 with this year's incoming MBA class.

Blackman says this reflects increasing competition to secure a place on a top MBA course. The elite business schools typically admit roughly 10 percent of the applicant pool. Candidates are routinely spending 100 hours studying for the GMAT and some even employ tutors to give themselves an edge in the application process. "Competition just keeps raising the bar higher and higher," Blackman says.

There are several other reasons for the rise in GMAT score averages. Candidates can now preview and cancel their GMAT scores, right after taking the test. Also, the GRE has also emerged as a rival to the GMAT for those who struggle with the GMAT. This means the lowest GMAT scores are probably not being sent to schools. "Allowing test takers to cancel low GMAT scores and retake the test after more preparation is having the anticipated impact of raising scores," says Kaplan's Yim. In the 2016 testing year, 27 percent of all GMAT test takers cancelled their scores, up from 19 percent a year earlier, he says.

Students are also cancelling relatively high scores. The Graduate Management Admission Council, which administers the GMAT, says that roughly a third of all candidates with a total score lower than 650 cancelled their exam scores. The trend means that prospective MBAs must study intensively or risk losing out on admission to their dream school.

How to overcome a low GMAT score? Be exceptional.

While some prospective MBAs are indeed admitted with a low score, they are truly exceptional in every other aspect of their candidacy. "We might find an extremely compelling candidate based on everything in their application but might also find they have a GMAT score that departs from our average," says Fuqua's Morgan.

In that instance, the school would instead turn to undergraduate coursework for an indicator of whether a candidate can thrive academically. "If we can find that, we are not only open to admitting that student, but are truly excited about inviting them be a part of Fuqua," Morgan says.

Kaplan's Dennis Yim would agree.

"I have had several students successfully get into elite programs based on other pieces of their application that made them compelling candidates," he says. "This included everything from being a decorated combat vet to starting their own business. Even if you are a bit below the median, go for it."

The bottom line: there are ways to overcome a low GMAT score. But it will make it considerably more difficult for you to get into business school.

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