According to reports this week in both BusinessWeek and the Chronicle of Higher Education, there are tiny fissures in the once watertight monopoly wielded by the Graduate Management Admissions Test (GMAT) over the business school admissions process.
Albeit with little fanfare, top business schools – including Stanford and MIT Sloan – have begun to allow applicants to submit results from the Graduate Record Examination (GRE) in place of GMAT scores, long the golden standard for business school admission.
What’s the story? According to the Chronicle, it all began back in 2003, when the Graduate Management Admissions Council (GMAC), which owns the GMAT, shocked the Educational Testing Service (ETS), which it had for decades contracted to produced and managed the test, by contracting instead with another testing service. (The new contract, with ACT-Pearson, took effect in 2006.)
Its nose out of joint, ETS has started lobbying business schools to accept its GRE test scores from applicants in an attempt to break into the annual $80 million GMAT market. Having formerly run the GMAT, ETS knows that the two tests, in fact, share much in common. Both test verbal, math, and writing skills, and though the GRE doesn’t pose questions about the finer points of accounting or how to interpret Sarbanes-Oxley, the GMAT doesn’t do much of that either.
In fact, the GRE poses several advantages to business schools and applicants alike, ETS argues. ETS has far more testing centers worldwide, making the GRE more accessible than the GMAT. The test itself is cheaper – $140 compared to the GMAT’s $250 fee – which test takers certainly won’t object to. But perhaps most significant, because the GRE is the standard test required for most other graduate programs, business schools stand to widen their applicant pool by attracting candidates that might not otherwise have considered business school as an option.
“Once they realize that they don’t have to take another test to apply to business school, they are going to hedge their bets and explore both opportunities,” David Payne, head of the GRE program for ETS, told BusinessWeek.
According to Derrick Bolton, Stanford’s director of MBA admissions, ETS’s lobbying did not influence the school’s decision to begin accepting GRE scores. “We were talking with faculty about whether we were attracting the most intellectually curious students, about whether MBA programs were attracting students with a genuine intellectual curiosity with the subject matter,” he told the Chronicle.
Stanford Business School has always used the GRE for admission to its doctoral program. “Someone said, ‘Why do we require the GMAT for the MBA?’” Bolton recalls. “It’s just one of those things that you accept as gospel until someone asks you the question.”
According to the Chronicle, about 3 percent of the Stanford MBA class that enrolled in the fall of 2007 – the first year Stanford loosened its admissions test requirements – submitted GRE scores in place of GMAT scores. While a small percentage, the GRE test takers widened the pool in significant ways, Bolton told the Chronicle. GRE test takers, he said, are more likely to be women and younger applicants – undergrads or students just a year or two out of college. “If we are able to fish in both of those pools, how can that hurt us?” he asked.
Defending the GMAT’s position as the standard test for business schools, GMAC President David Wilson questions the value of expanding the pool. “If time were limitless, then the larger the sample, the better. But if time is a constraint, then you want to be sure you are fishing in a pond where there are fish you can eat,” Wilson told BusinessWeek. “Are some schools fishing in the GRE pond? Sure. We haven’t seen results. We still believe we offer a stronger, better test.”
Schools Keep Quiet About Accepting GRE Scores
ETS doesn’t keep statistics on how many schools are fishing in the GRE pond. MIT Sloan, though, did begin accepting GRE scores as well as GMAT scores in 2006. But according to BusinessWeek, the Cambridge school has since modified the language on its website to deemphasize the GRE option.
Schools’ gravitation toward allowing GRE scores has been slow and quiet, in part because GMAC membership policy states that “requiring the GMAT exam as part of its admission process” is part of the minimum criteria for every GMAC member school. (Stanford and MIT are both members.)
Enforcement of this policy, though, is anything but absolute. “We are an association of schools committed to schools,” GMAC chief client officer Nicole Chestang told the Chronicle. “No school is in jeopardy of losing membership in GMAC for doing what they think is the right thing for their program,” she continued. According to Chestang, though, GMAC ended its contract with ETS because the ACT-Pearson proposal provided better security, better technology and more testing options. (This also justifies its greater expense, she says.) Besides, the GMAT was developed with business schools in mind.
This last argument is certainly true, but ETS is taking steps to change the GRE in ways it thinks will make it more relevant to business schools as well. ETS’s Payne told BusinessWeek that he plans to conduct focus groups with business schools about using the GRE.
In fact, some modifications to the test are already underway. Changes include replacing the antonyms and analogies section with more reading comprehension and including more data interpretation questions and real-world problems in the quantitative reasoning section. “People applying to business schools are really going to see the relevance there,” Payne told BusinessWeek.
In 2009, the GRE will also add a Personal Potential Index, BusinessWeek reports. The PPI, a six-part evaluation to be completed by outside references, will quantify an applicant’s soft skills – knowledge and creativity, communication skills, teamwork, resilience, planning and organizing, and ethics and integrity.
With business schools coming under fire of late for producing graduates with only status quo soft skills, this addition to testing criteria could prove to be of particular interest.
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