How Important are GMAT Scores for top business schools in the USA and Europe

The GMAT, or Graduate Management Admission Test, is an essential step towards admission to a top business school. It is used by over 2000 business schools globally, and MBA applicants often retake the test multiple times to get the highest possible GMAT scores.The obvious assumption is that a higher GMAT score is essential for admission to a good business school. But is this really true? And what about the cases that we read about, where a person who did not have the highest GMAT score still got accepted to a school like NYU Stern or STANFORD GSB?

US Business Schools and the GMAT Score

US schools undeniably place a certain amount of importance on the GMAT scores in their MBA admissions process. Of course, there are other factors that count, but no MBA applicant can deny that getting a good score is pretty much the first step.

So, if you scored a 650, your first reaction would be to cut Stanford or Columbia off your list, because you clearly don’t meet their basic criteria. But is this really the true picture? Let’s explore a little further.

Among the top 10 MBA programs, Columbia and MIT recorded the highest increase in points over the last few years, by 8 and 6 points, respectively. HARVARD SCHOOL OF BUSINESS reported its mean score at 729 in 2017, and its median score of 730 in 2018. Overall, it was seen that over the last five years, the GMAT score trend among the best business schools in the world has remained mostly positive, with Stanford remaining more or less even and 23 others reporting average increases in GMAT scores.

These top Business Schools in the US have very high standards for admission. The number of MBA applicants is in the thousands, whereas acceptance may be a mere 3-5%. These business schools are in high demand, and these numbers definitely help to fuel a reputation for these business schools being very selective and elite. Now, here’s the interesting part:

1. 1. Such an impression of high GMAT scores leads people to believe that the admission is so tough, that they don’t really have a chance, and so they hesitate to apply. Surprisingly, this is a view that finds acceptance with people in these elite business schools’ admissions offices: The dean of admissions at GSB has spoken of the misconception that to get into GSB, you have to be a ‘unicorn’.

This perception can lead to the average GMAT score to actually fall. For example, in 2018, Stanford’s average GMAT score fell from 737 to 732. To put things in perspective, in a test where the highest possible score is 800, Stanford’s score saw a substantial rise in 2016 and sustained it in 2017 at 737: a good 5 and 7 points ahead of the business schools with the second and third-highest scores, respectively. So in 2016 and 2017 it was the business school with highest GMAT level (at 737), but now at 732 it is not so elite, as three other schools also fall in the same range— Columbia Business School, Northwestern University’s Kellogg School of Management , and the Wharton School at the University of Pennsylvania .

1. 1. Not only do too-high GMAT score averages discourage good candidates from applying, there is another drawback as well. These schools often are very active in bringing about positive change in communities and individual lives. However, the ultra-exclusive reputation builds an unapproachable aura around the school , which can have a negative impact.
      Many students at MIT Sloan and Stanford have admitted to almost not applying because they felt they did not have the ‘right’ credentials: their GMAT/GPA score was too low, they did not come from a prestigious enough university, or the ‘right’ industry.
   2. But this is not what the business schools want. The administration and faculty of the best Business Schools in the world recognize that one of the factors that make their programs so good is the high level of diversity they are able to draw into the program. The kind of classroom and campus culture they want to cultivate cannot be created with students who come from only a limited set of institutions or contexts. What they seek to add is value: through diverse aspirations, experiences and perspectives.

NYU’s Stern School of business was the only school MBA ranking in the top-25 that saw a decline in average GMAT score by four points from 2014-18 (721 to 717). Experts from leading MBA admissions consulting firms are of the opinion that it is entirely possible that with a lower average GMAT score, top business schools are trying to extend their reach. By not paying too much importance to GMAT scores alone, the business school could be implicitly encouraging people with modest GMAT scores to try their luck and apply as well. After all, an MBA applicant’s confidence of their GMAT score is a key point in deciding where to apply in the first place.

Average GMAT scores at the Top 50 US Business Schools

European Business Schools and GMAT scores

Generally, the average GMAT score of a new batch of students in an MBA program serves as a measure of the kind of talent being accepted into the business school. However, European business schools tend to be less forthcoming with numbers and statistics with regard to their MBA admissions as compared to business schools in the US. Still, certain conclusions can be drawn based on the GMAT scores of the admitted students.

Interestingly, while European business schools have become more popular among students, and are increasingly being seen as competitive to the US business schools, yet their GMAT and GRE averages for admitted students remain far lower. Let’s see some figures to get a clearer idea of what this means.

Europe has only two full-time MBA programs with average GMAT over 700: INSEAD at 711 and London Business School at 707. In contrast, there are 14 US MBA programs with average GMAT scores above 711! Columbia Business School had an average GMAT score of 713 for their entire applicant pool last year, which is 2 points higher than the average for the students who enrolled into INSEAD’S MBA

So why do the best European business schools consistently have average GMAT scores below their US counterparts? Clearly it is not because Europeans score less on the test. On an average, Europeans score higher than Americans on the GMAT test! It has been found that Europeans (who make up the majority of students in European business schools) do not score less in the GMAT test than Americans. For test takers in Western Europe, the average GMAT score is 571—18 points higher than in the US (where the average score is 553). In fact, test takers in Eastern Europe, with an average of 567, also score higher than Americans.

US v/s Europe: GMAT and MBA Rankings

This is in large part due to the US News ranking methodology that uses standardized test scores as an important factor. The controversy is due to the fact that like most standardized tests, the GMAT can only be one amongst many indicators of whether a student can perform well in an MBA program , particularly in its core curriculum. Therefore, it cannot be regarded as the most important aspect of a student’s application portfolio.

Business school rankings in Europe are not so dependent on GMAT scores. For instance, in the case of the Financial Times — whose lists are widely regarded as the most authoritative rankings of the best MBA programs in Europe — GMAT and GRE scores do not even feature among the parameters used in its annual ranking methodology. Meanwhile, the Economist only puts about 3.1% weightage on GMAT scores in its ranking methodology. Contrary to this, the US News assigns 16.25% weightage to standardized test scores in its annual ranking of the best MBA programs in the US.

As a result of this ranking system, schools in US are spending huge sums—in the millions—to structure financial aid systems like scholarships to attract students with higher GMAT scores. This way, they know they will get a higher placement in the US News rankings.

For instance, the David Eccles School of Business at the University of Utah disclosed information about estimated SCHOLARSHIPS given by the school to MBA scholars, based on their GMAT scores. Currently, this business school has an average class GMAT score of 659 — higher than eight of Europe’s top-20 business schools. In the David Eccles School of Business, selected applicants with a score of 710 could get a scholarship of $61,000, in addition to a living wage sum. For those with a score of 670, the scholarship could amount to $50,000; for scores of 650, it could be $40,000, and for 620, it could be $20,000.

In contrast, rankings like those of the Financial Times in Europe ensure that business schools are not competing in terms of GMAT scores at all. As a result, these business schools have fewer options with financial assistance. In this regard, business schools in Europe are at somewhat of a disadvantage.

These are of course, rough estimates, drawn from a large pool of MBA ADMISSION CONSULTANTS.

But one thing is clear: European business schools lay considerably less importance on standardized test scores than business schools in the US. Thus, anyone who scores less than 700 in their GMAT test (and does not want to, or cannot afford to take the test again) should explore their chances of getting into an MBA program at a top-ranked European business school rather than one in the US.

So how which country or which business school would fit your needs is a highly objective question that will require individual research.