Why B-Schools now prefer GMAT over CAT?

 

by Arun Jagannathan  

When people talk about the GMAT, they assume that the scores can be used only for International MBA programs such as those offered either by the top US B-Schools such as Harvard Business School, and Stanford Graduate School of Business or by European ones such as INSEAD, and London Business School. However, after the Indian Business School (ISB) launched its flagship 1-year PGP course in 2001, the demand for GMAT scores from Indian Institutes has gone up. The list currently covers more than 200 programs at over 100 institutes.

There are three types of candidates that Indian B-Schools are looking at attracting. 

1. The Undecided

The student planning to take the CAT exam is typically in his final year of graduation and has a clear idea of taking the CAT and applying to the IIMs. However, many students don't have a clear idea of what they want to do - whether to do a Masters, or just land a great job, or do an MBA. So they might not have decided to fill out the CAT form when it is announced sometime in August. So what happens when you realise in October that you perhaps want to do an MBA?

B-Schools in India have realised that to tap into this segment of people who might have not appeared for the CAT, it is important to provide an alternate option. This alternative is best explored with the GMAT, as the test can be taken throughout the year. What's more - the scores are valid for five years. So the student might have taken the test anytime in the past as well. This opens up a fairly large applicant pool for the B-School. 

 

2. The Late Bloomer

The average experience of the students at the IIM-A PGPX course that admits students through the GMAT is close to 10 years. The average age in the class is 33! This means you are looking at a lot of students who might have initially decided to pursue a career in their chosen field of specialisation (IT, marketing, finance etc) but after having spent a few years in the "trenches", so to speak, have now decided to do an MBA. The CAT does not lend itself easily to such people. Not only do you have the problem of timing as mentioned in the point above but you will also have a greater risk as I will be talking about in the point below. In your 30s, you perhaps don't want to put yourself in such a position. 

A lot of great one-year programs are being offered by Indian B-Schools to target such people. Apart from the ISB program that takes in close to 800 students every year, you also have excellent 1-year programs from IIM-A, IIM-B, IIM-C, Great Lakes Institute of Management, XLRI and SP Jain. For any B-School that is thinking of offering such a program - the GMAT seems to be the de facto standard. So a mid-career executive will have more than sufficient options for such one-year courses through the GMAT.

 

3. The 'I-Want-Options' Applicant

This is someone who has perhaps taken the CAT and realised that there is way too much risk involved. By definition, CAT is not a standardised examination in the same way that the GMAT is. A famous case here is of a test-prep instructor who did not attempt any question on the CAT and yet landed a 55 percentile. So net-net, CAT has a lot of risk associated. On the other hand, the GMAT is a standardised test with a published standard deviation of +/- 29 Points. These means that if you take the GMAT on a Monday and score a 730, and then retake the same test on, say, a Wednesday, then your score will be between 700 and 760. You can understand how the GMAT algorithm works here.

So the recent trend observed at CrackVerbal has been that more and more people are taking the GMAT along with appearing for the CAT, so that they can explore options. Here is one such case of a student who got through IIM-B through the CAT and ISB through the GMAT but decided to choose the latter.

 

Many B-Schools in India are starting to understand this trend and are keeping both  tracks open i.e. you may apply with your CAT score or your GMAT score. TA Pai Manipal (TAPMI) is one such institute that offers admissions through both the GMAT and the CAT.

 

Verdict

Indians are the 3rd largest nationality taking the GMAT globally so as a B-School you get access to tens of thousands of highly qualified applicants. Also the GMAT test taker has typically more years of experience, and is willing to invest more in higher education. This makes it absolutely critical for Indian B-Schools to start taking GMAT scores for admissions to their 1-year and 2-year programs.

For students, here is an ebook that tells you the difference between the CAT and the GMAT.

 

Read More

The growth of one-year executive MBA programs in India

About the Author

Arun Jagannathan is the founder and CEO of CrackVerbal - a test prep company for GMAT, GRE, and Application Services.