Why Business School Requires The GMAT

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Just as the entire oak tree is contained, in some sense, in the acorn, so I argue that many of the intellectual demands of being a manager in the post-industrial business world are encapsulated in the experience of taking the GMAT.  Most students eager to enter an MBA program have to take a standardized test, typically the GMAT, to gain admission. In a more discouraged moment, a student might regard the GMAT and its demands as an entirely arbitrary obstacle that adcom imposes.

In fact, nothing about the GMAT is unrelated to the priorities of business world, and much about the demands it places on students mirrors the demands they will later feel day to day in their management positions. At the most basic level, the GMAT is hard: it is extraordinarily challenging and it presents students with the real possibilities of mediocrity and failure. Quite true. But does one imagine that a manager in the unpredictability of the international marketplace has it any easier? Ambition should be made of sterner stuff! If one prefers a coddled, stress-free environment, then a career in management is hardly the optimal choice!

GMAT QUANT

Of course, on a few occasions, a manager may have to do some math. Certainly, say, if the figure of 30% of $800,000 arises in a meeting or in a hallway side conversation, it would be reasonable to expect any manager to be able to do that calculation in her head. Given the mind-boggling amount of data we all have to process, it’s reasonable to expect a manager to be at least conversant in basic statistical measures and in graph reading. All true — but of course math is also valuable because it reinforces a number of valuable skills, including detail management, organization, precision in distinctions, and abstract pattern recognition. It would be quite naïve to think that the point of the math is nothing more than the math.  

Then, of course, there’s Data Sufficiency. Think about it: Of all the standardized tests in the world, the only one that has Data Sufficiency questions is the GMAT. Why is this? The fundamental question a student is trying to answer on Data Sufficiency is: Do I have enough information to answer a question? Ask any manager when was the last time he tried to determine whether he had enough information to answer a question. More likely, ask any manager how many open questions she is juggling at the moment, for each one trying to determine when she will have sufficient information to give an answer.   

Making such decisions is one of the quintessential managerial skills. It’s the manager’s job to know or figure out whether there’s enough information to attempt an answer to a question. The actual details of the calculation or data collection may be delegated to an engineer or marketing expert, but it is the manager’s job to “pull the trigger” on deciding it’s time to answer the question. This is a complex and abstract skill that looks completely different in each new context — and it is part of the true brilliance of the GMAT that the designers were able to create a question format that isolates, in such a precise and measureable way, this invaluable skill.

GMAT VERBAL

One theme running through the entire GMAT Verbal section is the importance of critical thinking.   Critical thinking is the habitual mindset of looking with a suspicious eye at any information that comes one’s way: How do I know this is true? Does it accord with what I already know? How might I evaluate it?  Any manager has to use a lot of of critical thinking to be successful in the business world. After all, every day a countless number of people are swindled simply because they are gullible.

The role of critical thinking is more obvious on the GMAT’s Reading Comprehension (RC) and Critical Reasoning (CR) questions. Even on the Sentence Correction (SC), though, a certain level of critical thinking is crucial. Students tend to misunderstand the SC questions as purely a test of grammar. Yes, of course, grammar is one of the elements of language tested on the SC, but hardly the only: A good sentence, on the SC and in real-world writing, has to be grammatically correct, logically sound, and rhetorically effective. The GMAT loves to snag the grammar-fixated students with incorrect choices that are 100% grammatically correct but are logical train wrecks or rhetorical nightmares. One has to operate in a sophisticated, multi-level mode of critical thinking throughout the verbal section.

Why does the GMAT ask Sentence Correction questions? In the modern, electronically driven business world, business people have partners all over the globe. In, say, the 18th century, most of one’s new partners, customers, suppliers, etc. were people one met face to face. No more, in our modern world. The vast majority of the business people with whom you interact in your career will be people you encounter in writing the first time. For example, in all likelihood you do not know me personally: thus, you are encountering me through my writing. Furthermore, mountains of psychological data have documented the importance of first impressions. What impact would it have on a potential employer, employee, partner, customer, supplier, etc., if your opening written statement to them contains grammatical mistakes? or is logically inconsistent? or is flat and dull and tepid? You never get a second chance to make a first impression, so it’s important that any words you commit to writing, throughout your career, adhere to the highest possible standards to create the most positive impression possible. If you habitually put forth your best, you will significantly reduce your regrets in life.

Why does the GMAT ask Reading Comprehension questions? Again, in the modern, electronically driven business world, successful business people are always learning about new markets, new trends, new categories of customers, new methods of producing and distributing, etc. To have the information she needs to perform at a high level, a manager often will need to absorb written information, in hard copies or on the web, including a good deal of unfamiliar material not necessarily explained in an optimal way. Such sources demand sophisticated reading skills — hence, the GMAT’s emphasis on reading.

Why does the GMAT ask Critical Reasoning questions? Think about it. The CR questions ask you to analyze arguments. Do you have any idea how many arguments a typical manager hears and has to process each and every day? A manager may be presented with arguments from his superiors, from the employees he manages, from his customers, from his insurance company, from his suppliers, and — of course — from his company’s lawyers! Furthermore, every sales pitch is fundamentally an argument. A few sales pitches, like a few arguments, are quite compelling, but many are flawed. A highly competent manager needs to have well-honed critical-thinking skills to able to weaken the flawed arguments she hears and strengthen the arguments she wants to support. The CR questions are the most direct test of critical-thinking skills on the GMAT.

Every skill the GMAT Verbal demands mirrors the skills a highly competent manager will need in an ongoing way throughout her professional career.

A ROBUST APPROACH TO THE GMAT

Above, I mentioned oak trees, one of the ancient symbols of strength and power. It’s no coincidence, for example, that the U.S. Army insignia of oak clusters is outranked only by the insignia of stars: metaphorically, we might say that the only things above what the oaks represent are what the stars represent. The Latin word “robber,” for “oak,” is the root of our English word “robust,” a word brimming with power.  

The psychometricians at GMAC are delighted to tell us that the Computer Adaptive Testing algorithm employed on the Quant and Verbal sections of the GMAT is robust in the statistical sense: in other words, what it measures is not compromised by a couple departures from an overall pattern, such as silly mistakes or wild guesses. Like a car with a good suspension system, the algorithm isn’t shaken by a few bumps in the road.  To succeed on the GMAT, you need to be similarly steady in the face of “bumps in the road.”

“Robust” is an excellent word to describe how a student should approach not only the GMAT but also her prospective career. The path to career success, like the path to GMAT excellence, is rarely straight, rarely smooth, rarely lacking in soul-searching challenges. Neither the GMAT nor a managerial career in the modern business world pretends for a moment to be enticing to the lily-livered. The word “robust” encapsulates the discerning fortitude, the alacritous resilience, and the indefatigable optimism needed to press on in the face of a sustained challenge. Students sometimes mistakenly believe that they can arrive at GMAT excellence by assembling some complete kit of test-taking tips. But excellence is not a gimmick: excellence comes from one’s core, from a deep commitment to face any challenge with the heart of a lion. In other words, it comes from a thoroughly robust approach. Screw your courage to the sticking point and reach for the stars! That attitude produces precisely the kind of success I wish for the reader, on the GMAT, in one’s career, and in one’s life.   

Mike MᶜGarry of Magoosh

Author Mike MᶜGarry creates expert lessons and practice questions to help Magoosh students improve their GMAT scores. He has a BS in Physics and an MA in Religion, both from Harvard, and over 20 years of teaching experience specializing in math, science, and standardized exams. Mike likes smashing foosballs into orbit, and despite having no obvious cranial deficiency, he insists on rooting for the New York Mets.

 

  • JohnAByrne

    While there is a lingering suspicion that some schools prefer the GMAT, I no longer think that is generally true. Elite consulting firms and investment banking firms are often known to ask job candidates what their GMAT scores are, but they could just as easily ask that question of the GRE results. So I don’t believe there is a difference there, either. This is especially true these days because both these industries are in aggressive pro-active mode in trying to hire more women who tend to make up a greater part of the GRE pool. So don’t worry about the test. Worry about the score.

  • AP

    John or Sandy, can you share any insights about how schools perceive GMAT versus the GRE, especially how it relates to career choices or future goals states by candidates? I am assuming that if you’re looking to enter consulting, there really is no alternative to the GMAT; but I may be wrong. Are there any folks who got into business school on the basis of their GRE score and then got a consulting gig?

  • AP

    Have to agree to a great extent with what Test123 said. Having said that, there’s absolutely no reason to believe that anyone who doesn’t score well on the GMAT is not a smart person!

  • Test123

    Gmat is a good measure of intelligence. There could be many reasons why MBB is hiring from Fuqua. Maybe MBB does not want extremely entrepruneurial employees or maybe high GMAT scorers do not want to work for MBB, etc.

    Based on my experience as consultant, I feel GMAT is tailored 360 degree test for management consultants. A consultant needs to have extremely sharp Quant skills and GMAT tests this very well to be honest. Also a consultant keeps getting introduced to new clients from different industries, RC tests a consultants ability to adapt and understand to new ‘passages’, situations., industries and clients very well. While writing a report, a consultant needs to be sure he does not misrepresent what he/she is trying to communicate and SC tests this very well. It’s obvious why CR is a must for consulting. Also, I find IR to be very relevant in today’s day and age of spreadsheets & analytics.

    I can’t imagine what other test would be more customized for MBB recruiting.

  • somsquared

    Honestly I think GMAT is a bad measure for intelligence. You mentioned that the GMAT is the best way to find out how smart someone is and that a low score indicates you will perform badly at your job. Yet, despite having a relatively ‘low’ avg. GMAT Johnson grads and Fuqua grads have been destroying the job market.

    Fuqua sent more students to MBB than Kellogg, Booth and Stanford to name a few.

    Think people need to focus less on Gmat and more on the results, i.e. Fuqua.