Is GMAT a gateway to ensuring quality?

While India witnessed a quantum leap in business schools, ‘quality’ has continued to slide downhill. Both the supply and the demand side suffer from poor quality. The supply side problem pertains to the paucity of well-trained and experienced faculty while the demand side issue relates to the quality of admitted students.

From the demand side, a major drawback is that most of these business schools cater to students who lack the basic skills required for graduate work, including an ability to communicate effectively in a business setting. In addition to language fluency and the ability to speak and write in a clear and logical manner in formal and informal settings, communication skills include the ability to hold people accountable to standards of performance and to ensure compliance. However, other than the major business schools, which screen students, based on rigorous tests such as CAT or GMAT, most Indian business schools don’t test applicants on verbal and written English.

A recent article in the Wall Street Journal quoted a study by Aspiring Minds, which tested 32,000 MBA graduates across India on analytical and verbal skills and found that only 10% of these graduates had the necessary skills to compete effectively in the current business environment. Inexplicably, a third of the finance majors did not know what an IPO stood for. The demand side problem can be more readily addressed by using reliable and valid testing procedures for screening students.

While a number of alternatives exist, the GMAT has a proven record of helping business schools with screening applicants on the basis of their verbal and analytical aptitude, precisely the qualities that are needed for developing into effective managers and highly sought by recruiters. While it is true that the GMAT can only predict academic success, it is also true that no single test can predict future managerial success as the latter depends on an untold number of factors, including serendipity. In addition to being a screening mechanism for MBA aspirants, the biggest advantage of the GMAT is that it can serve as a self-diagnostic tool: students who perform poorly in such tests should think carefully about pursuing an MBA degree.

The MBA can be a very valuable experience for many students, but only if schools do their homework and select students who have the skills needed to succeed. There are many criteria that can be used, but a rigorous aptitude test such as the GMAT is an important diagnostic tool, not just for schools but also for the applicants themselves. Corporations that recruit MBAs are the primary customers of B-schools and these educational institutes owe it to their stakeholders to be just as selective about whom they train as recruiters are about whom they hire.

Dr. Rajiv Sinha, Dean, MYRA School of Business, Mysore. An alumnus of Delhi School of Economics, and Ph.D from the Pennsylvania State University, USA, he holds the Lonnie Ostrom Chair in Business, W. P. Carey School of Business, Arizona State University.