Grappling with the GMAT

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Any test that requires examinees to submit to a palm scan to verify their identity probably has a lot riding on the outcome. That is certainly the case with the GMAT business school application test.

A good score can affect one’s lifetime earnings, given that the acquisition of an MBA from a top school can increase a salary significantly.

Early autumn is a popular time to take the GMAT, in advance of winter MBA applications. This year, economic conditions are also boosting demand since further study can be attractive in a downturn. So how does the test work?

The basics

The GMAT is controlled by the Graduate Management Admission Council (GMAC), a not-for-profit body. Each year, it is taken by 210,000-220,000 people worldwide, who pay $250, excluding any taxes. They sit the exam at centres run by Pearson Vue, a sister company of the Financial Times.

The computerised test assesses verbal and mathematical dexterity and runs for 210 minutes (220 minutes with breaks).

The first section consists of two essays analysing an issue and an argument, the rest is multiple choice. The quantitative section features mathematical problems and questions that test whether there is sufficient data to support certain statements. Finally, there is a verbal section that covers reading comprehension, critical reasoning and sentence correction.

The fiendish thing about the GMAT is the adaptive multiple choice sections: if you get questions right, they are likely to get harder.

“Timing plays a significant role in taking the test,” says Rose Martinelli, associate dean of student recruitment and admissions at the University of Chicago Graduate School of Business. “If you are unable to finish any of the sections, your score plummets.”

Preparation

Dave Wilson, chief executive of GMAC, suggests doing 100-120 hours of preparation over seven to 10 weeks. Kaplan, a test preparation and admissions adviser, recommends two to three months of preparation.

Although GMAC says its own materials are all that is necessary to prepare for the test, there is no shortage of companies offering supplementary reading and classroom drilling. There is also a plethora of online discussion groups.

However, chatrooms can be dangerous. In June, GMAC announced it had shut down Scoretop.com, alleging questions still in use had been circulated on the site. Users that had supplied or confirmed these questions might have their scores cancelled, it added.

Mr Wilson accepts test preparation is a minefield. The most explicit guidance he could give students in the aftermath of the Scoretop.com episode was that they should avoid websites that boasted of having “live” questions. (Go here to read the latest on the Scoretop.com episode.)


Scoring

GMAT scores range from 200-800. The mean is about 530 and has been for about a dozen years. Less than 50 people a year get a perfect 800. The test is a reliable predictor of academic success, says GMAC, but an exceptionally high score is not always viewed as a clear signal someone will be a good student.

A senior figure within a leading European business school says he has come across plenty of good candidates whose scores “began with a four”. Conversely, he says he tends to be cautious of people who score 780-800. “I look very, very closely at them,” he says, declaring that their social skills can often be deficient.

Gisma Business School in Hanover, Germany, investigated the relationship between GMAT scores posted by its MBA students and their performance on the course. It claims the correlation was so small “as to be insignificant”.

Business school entrance exam questions get harder the more answers you get correct

However, it says the GMAT is still useful as a way of figuring out whether a student has the ability to get through key subjects such as accounting.

Caroline Diarte Edwards, admissions director for the Insead MBA programme, believes there is some correlation between GMAT score and academic performance. However, this does not mean that Insead demands a formal minimum score. “A common misconception is that you have to have 700 to go to Insead.”

The alternative

There is a competing admissions test to the GMAT – the GRE – but it is much less established. At $140-$195 (excluding taxes), it is cheaper.

GMAC’s Mr Wilson denies that his organisation has an effective monopoly: “GMAC has competitors out there who would love to take more and more of our business.”

ETS, the company that runs the GRE, says more institutions are following the example of Stanford Graduate School of Business, which began accepting its test in 2006.

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