Why is the GMAT used in determining admission to the top ten MBA programs

PANDA_IHB

PANDA_IHB

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The MCAT tests your knowledge in the area of science in order to be admitted to Med School.

The CPA tests your knowledge in Financial, Audit, Regulations, and Business Environment which all tests your knowledge in becoming an certified accounting professional.

The California Broker's Exam tests your knowledge in Real Estate Finance, Contracts, Principles, Practice, Legal Aspects which are all relevant in choosing a successful career in real estate in California.



So why doesn't the GMAT test your knowledge in business like Sales & Marketing, Sourcing Products, Operations, Finance, Accounting, and Entrepreneurship? I don't understand how critical reasoning, Reading comprehension, and high school math is relevant in your chances in succeeding in business. So why do top ten MBA programs use the GMAT as one of the their major criteria in determing the best business students to be admitted to their program. I believe that the GMAT test score has practically 0% relevance to one's chances in succeeding in business. Tell me your thoughts.
 
'Whom are you?' he asked, for he had attended business college.

George Ade (1866 - 1944), "The Steel Box", 1898



In my experience, an MBA has practically 0% relevance in the practical application in any business, especially real estate.



Personally, hiring an MBA only means that I pay a premium for filling a position that will likely be vacant in two years due to turnover. The MBA is touted as a versatile degree that can open the door to any industry, however, in my experience with new MBA grads, it's a clear sign of a lack of passion for the industry they are in, again, especially in real estate. Going for your MBA is likely a sign that you still don't know what you want to do or how you want to do it.
 
[quote author="tkaratz" date=1243836075]'Whom are you?' he asked, for he had attended business college.

George Ade (1866 - 1944), "The Steel Box", 1898



In my experience, an MBA has practically 0% relevance in the practical application in any business, especially real estate.



Personally, hiring an MBA only means that I pay a premium for filling a position that will likely be vacant in two years due to turnover. The MBA is touted as a versatile degree that can open the door to any industry, however, in my experience with new MBA grads, it's a clear sign of a lack of passion for the industry they are in, again, especially in real estate. Going for your MBA is likely a sign that you still don't know what you want to do or how you want to do it.</blockquote>


Well said Tkaratx! I couldn't agree more. Guy Kiwasaki from his book "The Art of the Start" wrote to never start a new entrepreneurial venture with a team of MBAs. This is a coming from a guy who got his MBA from Stanford.
 
Glad someone else shares the same opinion. But, my thought may not hold true for the old guard MBA's and I certianly do think that there are some very intelligent people enrolled in the top MBA programs (wharton, haas, stanford). However, UCI, Fullerton, Univ of Phoenix, meh.



The e-myth implies something similar to Guy. Most start ups are driven by engineers or people with a skilled trade.
 
[quote author="PANDA" date=1243840931]Well said Tkaratx! I couldn't agree more. Guy Kiwasaki from his book "The Art of the Start" wrote to never start a new <strong>entrepreneurial venture</strong> with a team of MBAs. This is a coming from a guy who got his MBA from Stanford.</blockquote>


Rudders are good for steering boats.

Propellers are good for getting them moving.

Both can do the other's task, but both are lousy at it.

Use the right tool for the job.



You might appreciate these books: <strong><a href="http://www.jimcollins.com/books.html">Good to Great</a></strong> and <strong><a href="http://www.jimcollins.com/books.html">Built to Last</a></strong> by Jim Collins, analyzing successful companies.

I haven't read <strong><a href="http://www.jimcollins.com/books.html">How the Mighty Fall</a></strong>, but I would expect more of the same good stuff.



-IR2 (M.B.A. :red: )
 
we talked about this topic on a previous <a href="http://www.irvinehousingblog.com/forums/viewthread/4828/">thread </a>started by No Vas; there you will find my response to my MBA experience?
 
[quote author="roundcorners" date=1238196163]No Vas... great topic... you really got me thinking all night with the thread; alright, I?ll be a little vulnerable and share, the kid and wife are asleep, so this might be a little long?



I have to admit, I am a little frustrated with where I am professionally. I was afraid going into b-school that I?ll still be in the same industry, same position and pay coming out. Granted, the recession is not doing anybody any favors, but this is where I find myself. My school is so small that if I tell you guys where I went most of you could probably figure out my true identity! I?m just an independent outside medical sales guy, so yeah; an MBA has yet to help me close a deal.



I went into school to write and test out a few b-plans; I came out realizing that it required way more money, time and effort than I thought. Plan-B was to get back and climb the corporate ladder, seeing as that I?ve been out of the corporate loop for more than ten years. I really went to school because I love business, making deals and money and I?m an entrepreneur at heart. Yes, you don?t have to go to b-school to do all of that, but I figure it wouldn?t hurt.



So the degree has not prepare me to re-enter the corporate field and I?m kind of stuck with stack and stacks of well written b-plans; would I trade my MBA for a million bucks, not a chance! (Well maybe a million, but you know what I mean)



Going through grad school was just about the best thing that happened to me; I can say that I?m more whole as a person then before. The experience has matured me in almost all aspects of my character. I know myself so much more; and I probably couldn?t have done it any other way.



The article has some truth where business now-a-days is so very complex; so multi-faceted that you can?t possibly learn everything in two years. What I realize at the end of the program was that; ?I know, I don?t know!? I think that is what most masters programs do to you. You realize that there is just so much more to learn, that you can?t possibly learn it all. What my programs strive to do then was to simply equip us with the ?fundamentals? of business so that we are able to adapt and adjust; to critically think through almost any proposition. If we don?t know an answer, at least we would know where to go to find it.



I feel comfortable and confident at any conference table with any other MBAs from any other top tier school. As a matter for fact the many people I know from Anderson, Marshall, Thunderbird, and UCI are no better off financially than I am. Most of them are stuck working 60+ hours behind a desk, flying here and there, constantly fearing being laid off. On the other hand, I start my day at 11am out in the field and am usually back home by 5pm; I never missed a prenatal doctor?s appoint, I can never be fired and I?ll enjoy going to every game my son will ever play. By next year on just my income, we should be able to afford an Irvine detached starter home.



The MBA really helped me to realize what I want and didn?t want. One person on the IHB said this once; that a degree is simply a multiplier of what you already have. As for me, it really cemented the fact that I?m not cut out for a corporate gig. If I didn?t know that going into my program, I would have figure it out by the time I was done. This wasn?t my dream but I?m fortunate to already be well into my career; if I only could get my hands on some $$ for those b-plans though!</blockquote>


Thanks RC, I totally missed this thread. I enjoyed reading your post. Just curious, which business plan of yours did you see most viable if $$$ was no issue to fund your venture? The business I run today is the b plan I wrote for my venture capital class in my MBA program. That is probably the only class I really enjoyed in the whole program. Although I highly don't recommend this, I started my entire business venture on credit cards. You've got do something that you absolutely love. If you are not passionate about your business, it is definitely possible to be profitable, but very difficult to sustain, as you will face many of challenges while your business is in its infancy stage. (annual sales of under a million)
 
<a href="http://www.calculatedriskblog.com/2009/06/unemployment-rate-and-level-of.html">From Calculated Risk</a>

Note that the unemployment rate has risen sharply for all categories in 2009. For "less than a high school diploma" the rate has increased from 9% in 2009 to almost 16% in May.



Education matters!



<img src="http://www.bls.gov/emp/edupay.jpg" alt="" />
 
There is no other entrance exam that Business Schools can use as one part of the entrance requirements. That being said, the admissions committee looks at work experience and your essays with a lot more weighting than they do what you got on your GMAT. I also believe that your undergraduate grades (especially our quant classes) are more important than the GMAT scores. The more work experience you have, the more it will be weighted into the decision for admissions. I would tell people not to waste their time in getting an MBA from a non top-25 school (especially those online MBA programs). It's not that you learn about rocket science during business, it's the way they make your learn and think plus work in groups. Not only that, but with USC the alumni network has been a great asset to have. Sure I sent $75k on my MBA with about a year's worth of income loss, but if I had to do it all over again I'd do it in a heart beat.



If you want to rag on any entrance exam, why not bash the LSAT. You can have OK grades from a decent school, but if you score in the top 5-10% percentile you'll probably get into a top 25 law school. Doing well on the LSAT doesn't guarantee that you'll do well in Law School let alone pass the bar or become a good lawyer.
 
Don't know much about GMATs but I can say that



1) MCAT does not really test you on scientific knowledge...it is actually more about reading comprehension and application (Humanity majors do better on the MCAT than science majors)



2) LSAT does not test legal knowledge at all. It focuses on critical/logical thinking and reading comprehension. Same with the GRE.



There are arguments that standardize tests are not very good at predicting success and that they are biased in nature. I think that they are not the best tool/predictor but can be useful. Speaking from my med and law school application experience, private schools lean more on the tests while public schools rely more on GPAs.
 
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