GMAT Orientation

f you’re wondering what the GMAT is and whether it’s something you should learn more about, the FAQ on this page is the place to start.

What is the GMAT?

The GMAT (Graduate Management Admission Test) is a 3-1/2 hour standardized exam designed to predict how test-takers will perform academically in MBA (Masters in Business Administration) programs. GMAT scores are used by graduate business schools to make admission decisions.

You might also see the GMAT referred to as the "GMAT CAT"; the acronym CAT stands for "Computer Adaptive Test." The GMAT is administered only by computer now, except in certain locations outside North America, where the test is referred to as the "paper-based" GMAT. (Since you’re reading this on the Web, no doubt the GMAT CAT is available where you are.)

Who is responsible for the design and administration of the GMAT?

The GMAT is the brainchild of the GMAC (Graduate Management Admission Council), which determines what kinds of skills the GMAT should measure — and how it should measure them. But it is ETS (Educational Testing Service) in Princeton, New Jersey that actually develops the test questions, administers the test, and reports test scores to the schools — all at the behest of GMAC.

Do I need to take the GMAT for admission to an MBA program?

To gain admission to an MBA program, chances are you’ll need to take the GMAT. About two-thirds of the 1,300+ graduate business schools around the world require GMAT scores for admission. Schools that do not require GMAT scores nevertheless welcome GMAT scores to help access an applicant’s qualifications.

NOTE: Schools that do not require GMAT scores generally have relatively lenient admission standards and/or are located outside of the United States.

What abilities does the GMAT measure?

The GMAT seeks to measure three broad areas of ability by way of its different test sections:

Analytical Writing Assessment (two 30-minute essay sections)

Quantitative Ability (one 75-minute multiple choice section)

Verbal Ability (one 75-minute multiple choice section)

A separate score is awarded for each of the three abilities listed above. A combined Quantitative/Verbal score is also awarded. The GMAT is not a pass/fail test.

How important are GMAT scores in the B-school admissions process?

Each graduate business school develops and implements its own policy concerning the use of GMAT scores in making admissions decisions. Many schools screen applicants by combining GMAT scores and undergraduate GPA (each school determining for itself their relative weight), then ranking all applicants in their initial pool accordingly.

In addition — especially after the initial screening of applicants — admissions officials consider subjective factors such as work and other relevant experience, recommendation letters, application essays (personal statements), and reports of personal interviewers. In making difficult decisions between two or more similarly qualified candidates, admissions officials rely less on GMAT scores and GPA and far more on these other, more subjective factors.

Has the structure or nature of GMAT changed in recent history?

In 1987 ETS implemented dramatic changes in the format and structure of the GMAT. The GMAT remained unchanged until the fall of 1997, when the paper-based GMAT was supplanted by the GMAT CAT (Computer Adaptive Test). The GMAT CAT is briefer than the paper-based GMAT in total number of both Quantitative and Verbal questions. Also, the GMAT CAT includes two AWA (essay) sections, which were not formerly included in the paper-based GMAT. GMAT CAT scores are based on the same scale as paper-based GMAT scores. Thus GMAT CAT scores can be compared directly to older, paper-based GMAT scores.

Is the GMAT likely to change in the future?

GMAC and ETS are currently considering a variety of refinements in the GMAT CAT, including the following (the first is most likely to occur in the near future):

refining the computer-adaptive testing system to allow test-takers to review previous questions and/or change responses to questions

incorporating questions that measure additional cognitive abilities

incorporating innovations for assessing leadership and listening skills

accounting for the growing diversity of cultures and languages represented among the GMAT test-taking population (perhaps by culture-specific versions for different countries or regions)

Of course, GMAC and ETS will pre-disclose any changes well in advance of incorporating them into the GMAT CAT.

CAT - MBA Admission Test - Overview

CAT is the gateway to the cream of management institutes in India, the IIMs. CAT, or the Common Admission Test, is an aptitude test; it is the most popular test among prospective management students because it is accepted by the best institutes. The CAT is one of the world's ost demanding entrance examinations for any graduate institute.

CAT MBA entrance exam is used as a criteria to shortlist applicants for admissions to the six IIMs-IIM Ahmedabad, IIM Bangalore, IIM Calcutta, IIM Lucknow, IIM Indore, and IIM Kozhikode. Common Admission Test is one of the largest MBA entrance exams conducted in India, anually. The CAT score is also accepted by more than 75 non-IIM institutes across India, some of which are as reputed as the IIMs.

Eligibility for the postgraduate programmes in management at all IIMs and to appear for IIM-CAT is at least a three-year bachelor's degree in any discipline from a recognised university with 50% Marks in graduation. Indian Institute of Management (IIMs), the premier business-schools of the country (and counted among the best in the world) conduct this test for selecting potential students for the next round of admission process (comprising of a personal interview and a group discussion) for their MBA and Fellow-ship programmes.

Those appearing in the final year examination of graduation are also eligible to appear in Common Admission Test. Some People feel that Common Admission Test (CAT) is more of a rejection procedure than a selection process.It rejects those who can’t make their minds work at break neck speed for two and a half hours non-stop.

CAT Exam covers questions in five broad areas such as verbal ability and reasoning, reading comprehension, quantitative skills, data interpretation and logical reasoning.

The number of questions asked in Common Admission Test vary every year and a typical CAT question paper can have anywhere between 75 and 150 questions. Common Admission Test evaluates the candidate's presence of mind and his ability to perform under pressure. Announcement of the procedure for appearing in the Common Admission Test is made in leading newspapers in August every year for admission to the programme beginning in the second half of June of the following year. The test will be conducted during November. CAT 2007 Notification for admission to 2008 session has been announced.

Usually, CAT tests three of your abilities:- Problem Solving- Data Interpretation and Logical Reasoning- Verbal Ability and Reading Comprehension. The CAT examination demands competency across all sections of the paper. So, the number of sections in the test don't really matter; what matters is whether you are competitive and have answered questions in all the sections.

All the questions are of multiple-choice nature with four/five alternate answer choices and the candidate has to choose the best answer for each of the questions and mark it on a special Optical Reader answer sheet. Differential marks are allotted to the questions. The test comprises 150 to 200 objective type questions and is usually divided into three to four sections. The number of questions in the test has been coming down steadily, from nearly 200 in the 1990s to 90 in 2005 and just 75 in 2006.

Very little strategy could be applied in selecting the easiest questions. Cut that down and don't waste time on questions which are lengthy. One misconception is that you need to slove the whole Question Paper - not at all. If you can solve 38 to 40 per cent of the questions, CORRECTLY, you are through.

Not an Engineer - No Problems You don’t need to be an Engineer to get into an IIM . Infact being a non-engineer may help in the Interview part. IIMs encourage diversity. And being a non-engineer you may be compared with other non-engineers. Rather than with engineers who may be compared with IITians.

Why MBA

During my last career chat on rediffcom, someone asked the following question:
vic asked, what do u think of chartered accountant career in terms of rewards it carry? kindly suggestThis is what I answered: CA is a good and rewarding career although, like in medicine, building a practice from scratch takes time. Of course, there is the option of working for someone else -- CAs are in demand in the industry like never before. KPOs, equity analysis and accounting firms employ a lot of CAs at very good salaries. But remember, it can be a very boring profession if you don't like working with numbers. So don't make a choice based only on the job potential!
Half-a-dozen readers sent in angry emails saying that Chartered Accountancy was a great profession -- and that I was projecting a wrong picture. That no profession can be termed as 'boring'.
Well, I'm afraid I can't be politically correct and will go out on a limb to say that CA -- despite being a respectable profession with great career prospects -- has lost out to the MBA. And, like it or not, this trend will only grow stronger.

The ABCD of CA
Ask most engineers why they did a BE and they'll tell you: "That's what all bright students who opt for science do... unless they want to do medicine."
The situation is something similar with CA. "That's what all bright commerce students do... unless they want to do MBA." Of course, the situation is a bit different. Even those doing the CA may eventually top it off with an MBA.
The difference between the CA and MBA is a bit like the difference between a five day test match and one day cricket. Acquiring a CA takes a lot of plodding and perseverance; at the end of the day, a result may prove inconclusive.

The MBA, like one day cricket, is quick, glamorous and performers get faster recognition as stars.
Okay, let's not stretch it. One day or five day -- in both cases, the players hold a bat and throw a ball. In case of CA and MBA, there is a difference. Both may join the same companies, but their job profiles would be completely distinct.
This is not to say that one job is 'superior' to the other. But the fact is that, starting as a CA, you can expect to climb up the ladder upto the CFO position. While an MBA's career path could -- in theory -- lead upto CEO. There are notable exceptions such as Deepak Parekh of HDFC, but, generally, this holds true.


Why MBAs are preferred
The reason is simple: being CEO is about vision and leadership. This would require you -- at times -- to take a leap of faith, even when the numbers are against you. For example, you diversify into a new area of business. This may mean investing a lot of money, literally burning cash in the initial phase. It may look very bad on the balance sheet for a while, but there is a gameplan and eventually it pays off.

MBAs are exposed to all aspects of the business -- their role is to take a bird's eye view of the organisation. On the other hand, CAs are trained to look at the eye of the fish. And they do a damn good job of it.

But should a CA decide to throw down his accounting and auditing arrow and don a different hat, it is not easy. The mobility into general management and consulting that comes with an MBA from a premier institute is missing for CAs. Even though the CA has battled equally hard; a rank holder in particular would be one among several thousand aspirants.
Overall, it appears that MBAs score when it comes to communication skills, presentation and customer orientation. The 'soft skills' so crucial for success in today's corporate world.
The bottomline is that certain jobs are purely in the CA domain: Statutory & Regulatory compliance, Consolidations, Taxation, International Accounting (GAAP), Internal Audit, Systems Audit, Transaction Advisory -- to name a few.
Other profiles are available to both CA s and MBAs: MIS, Budgeting forecasting, Business Planning, Equity Research, Treasury, Investment Banking, Mergers and Acquisitions, Portfolio management, Fund management, Sector Analysis.

However, these are diversified roles. Many employers prefer to hire MBAs from premier institutes for these roles, as it is felt they are more equipped to provide insight and analysis.
Does a CA + MBA combination provide an extra edge? Well, it never hurts to have a double degree but there's no sure fire formula to become a finance whizkid. An engineer + MBA or a B Com with a degree from a top 10 institute stands an equal chance!
So, how do you decide?
Reasons to do a CA include:

1. Dad owns a CA firm, it makes sense to join the business
2. Professional qualification chahiye. CA is a good one -- nothing stops you from doing an MBA later.
3. You genuinely like accounting. It's what you've always dreamt of doing in life.
As few 17 or 18 year olds know what they want in life, Reason 3 is rare. But Reasons 1 and 2 are perfectly valid.
If lucky, you may find that you enjoy the subjects and become an excellent CA. If not so lucky but smart, you may not like what you study but still become a competent CA. If neither smart nor lucky, you will probably remain a frustrated 'trying to clear my CA' student.
The perception is that the CA success story is 'all or nothing'. Either you clear the exam -- rather, three different exams -- or you get left behind. Whereas, in the case of an MBA, while only a few make it to the top 10 institutes, there is always the hope of the next 10 and then the next 10.
However, things are changing on that front. In a recent interview, T N Manoharan, president of the Institute of Chartered Accountants of India, stated the pass percentage has risen dramatically in recent years. 'Gone are the days when the pass rates were 2-3 percent. Now, if you consider both groups at the final level, these are at 15-20 percent. In a single group, it is often as high as 30 percent,' he said.
What's more, 83 percent of the 7,445 candidates who passed out in 2005 were absorbed by industries. Out of a total number of 1.3 lakh CA professionals, 10,000 are settled abroad. Of the rest, 55,000 were employed in industries, and the rest were practitioners. ICAI believes there is a requirement of 40,000 more CA professionals in the country.
In fact, it does appear that ICAI has woken up and taken the challenge posed by the 'lure of the MBA' seriously. A new syllabus will be launched this year, and the duration of the course condensed to four years.

That's still two years more than an MBA though!
ICAI is also undertaking marketing itself aggressively. For example, by screening films at schools 'to sensitise teachers, students and parents to the importance of the profession.'
Most importantly, ICAI has started offering 'campus placements.' Not only is this great for newly certified students, it's a good revenue earner for the institute. Like premier MBA institutes, ICAI charges recruiting companies -- Rs 1.2 lakhs is the going rate for 'Day 1' at the Mumbai and New Delhi centres.

Top recruiters during the February/ March interviews were Progeon (which offered 163 jobs), Gecis (160), Tata Sons (68) and Reliance Industries (63). The average salary would be Rs 4 lakhs while the highest salary offered was Rs 12 lakh per annum.
But it didn't make headline news, unlike IIM salaries...
The basic problem
ICAI can shout itself hoarse over the great new career opportunities a CA degree brings -- and rightly so. But it is impossible to fight the MBA. At best, it can hope to attract some of the very bright students who become CAs first and MBAs later.
The very nature of the profession -- exacting, detailed and dealing with numbers will put off many students. And there is nothing that anyone can do about it.
That is all I meant when I made my original statement -- that CA can be a boring profession. That does not imply that all those who become CAs are either bored -- or boring.
But just like you can't become a doctor if you faint at the sight of blood, you can't become a CA if you are unable to make sense of numbers. Realising this simple truth would save many young people a lot of wasted time and effort.
Karan Johar believes 'shaadi ki buniyaad sirf beinteha mohabbat honi chahiye�' I believe the same applies to one's career. The only difference is, if you love your profession as much as Abhishek loves Rani Mukerji in KANK, it will lovingly embrace you in return!
Chat with Rashmi on this and other career issues. Join us on Wednesday, September 6, at 3 pm.
~ Rashmi's earlier columns:
Five-star careers, one-star salaries
Is brand IIT your destination?
IIT at any cost?
The right to a 'good' school
The caste factor: Show me the numbers
Yeh aaj kal ki IIM salaries...
B-school salaries: A reality check
Can you afford an education loan?
The truth about IT cats and dogs II
The truth about sex
The truth about Indian schools
Career lessons from Bunty Aur Babli
The job-hoppers' guide: what's in it for you?
The truth about earning in dollars
The $152,000 salary is just a jackpot
The long, hard road to an MBBS
Doctor or Engineer?
Got the part-time MBA blues?
Where there's an MBA class, there's hope!
Is the 'IIM' brand invincible?
The MBA Caste System
The truth about MBA Cats and Dogs
The truth about IT Cats and Dogs
If you ain't a cat, don't worry!
Kya aap copywriter banna chahte hain?
Rashmi Bansal is a graduate of IIM Ahmedabad and founder-editor of the popular youth magazine JAM (www.jammag.com). She can be reached at rashmi@jammag.com