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GMAT essential for quality as MBA student numbers drop
KARACHI, Feb 19(Daily Times): There is ongoing debate
in the business press about the decline of MBA student numbers and what is wrong
with MBA programs. This debate easily spills over into a discussion whether
Australia has too many MBA programs. But the real issue is the quality range of
MBA graduates emerging from Australian business schools.
Better MBA
graduates make better managers and make a bigger difference in the businesses
they join. Lesser quality MBA graduates are seen as arrogant and not worth the
extra salary cost, compared with holders of bachelor's degrees, who are more
amenable to on-the-job training.
Better MBA graduates also boost the
ranking of the MBA program: being ranked first or among the top few MBA programs
in Australia (by the Australian Financial Review, for example), or in the top
100 globally (by the Financial Times) is the holy grail of Australian business
schools. These rankings depend in large part on the salary earned by MBAs after
they graduate, and on the salary difference pre and post-MBA.
As in most
markets, high quality demands a high price. Thus, rankings focus attention on
the critical central issue, the quality of MBA graduates: not the research
publications of the professors, not the quality of the buildings and other
facilities, but the quality of the new managers being sent out into the business
community.
In any production process, we should not expect to produce a
uniformly high quality output if we use highly variable quality of inputs, but
this is what most Australian MBA programs do. Admission standards vary widely
across MBA programs in Australia, but also within any MBA program. We admit a
wide range of students to most programs.
This has been tightened up in
the better business schools that have achieved international accreditation,
since accreditation requires minimal standards for admission, typically an
undergraduate degree and at least two years of work experience.
But some
new students have a higher grade point average than others, and others have more
- and/or more relevant - work experience than their peers. Moreover, the quality
of instruction in their bachelor's degree might vary greatly, and the quality of
their workplace experience might also vary substantially.
The Graduate
Management Aptitude Test score is required by many MBA programs across the
world.
A major reason for this is that grading systems and grade point
averages vary substantially across and within nations, and thus provide no basis
for comparison of different students when entry to MBA programs is competitive.
The GMAT provides a much more reliable indicator of relative numeracy and
literacy (which are correlates of management aptitude). Empirical evidence is
strong that GMAT scores are the strongest predictor of MBA grades.
Recent
research demonstrates that higher GMAT scores are associated with higher
post-MBA salaries and promotions, even after controlling for undergraduate grade
point average, status of undergraduate college and rankings of MBA
programs.
Queensland University of Technology plans to become only the
third MBA program in Australia to require the GMAT for admission to its MBA
program.
At present, only the Australian Graduate School of Management
and the Melbourne Business School require GMAT scores. AGSM, MBS and QUT are the
only three Australian MBA programs to have appeared in the Financial Times list
of top 100 MBA programs globally.
Why are other Australian MBA programs
reluctant to require the GMAT? Most will argue that in a competitive market for
MBA candidates, its imposition will reduce enrolments: it costs about $300 and
requires preparation if a good score is to be attained. Being so driven by their
budgets, and with a high fraction of total costs being fixed costs (salaries for
academic and administrative staff), most Australian business schools are
unwilling to bite the bullet and lift their MBA program from the morass of
mediocrity to the upper strata of a GMAT-required globally competitive MBA
program.
The major advantage of requiring a GMAT score from applicants is
that it sends a strong signal to them that the quality of the student body will
be higher and more uniform, and thus attracts better students. At international
student recruiting fairs, and increasingly in
Australia, students with
GMAT scores turn away when they learn that not all candidates will have taken
the GMAT. They seek an MBA program that imposes a minimum GMAT score as
insurance that they will be sharing classes and group work with students who
measure up to a high standard.
Knowledgeable employers also prefer MBA
graduates with GMAT scores. Brian Gillespie, Brisbane partner in
PricewaterhouseCoopers, says: ''My view is that the only way to survive in the
quality half, as the MBA market shakes out, is to have program credibility, and
for me having the GMAT as an entrance requirement will do just that. Certainly,
as one of Brisbane's largest employers of MBAs, I look favourably on programs
where the GMAT is used.''
Finally, as any teacher will confirm, teaching
MBA students who are of relatively high and uniform quality is a dream compared
with teaching a class of students who range from the near genius to the barely
literate and potentially also innumerate. In such class situations, too much
time is spent herding the laggards toward some minimum standard rather than
helping the better students attain greater knowledge.
The GMAT is now
available more widely in Australia, being administered for the Graduate
Admissions Council by Pearson Vue in capital cities across the country. The time
is right for the better MBA programs to take on the global competition in their
quest for quality MBA students.
GMAC cautions that the GMAT should not be
used as the sole indicator of student quality: other measures such as
undergraduate GPA and work experience should still be used for a more complete
picture of admission quality. source: the australian
Professor
Evan Douglas heads the Brisbane Graduate School of Business at QUT.
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| Education News | | Updated: 24 May, 2012 |
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