Are business schools graduating the wrong leaders? If so, the GMAT may be to blame

Graduate Management Admission Test (GMAT) results are an important assessment criterion for business-school applications. The higher the GMAT score, the better the odds of gaining admission. A study in the Journal of Business Ethics makes the surprising finding that high GMAT scores may be correlated to some of the negative traits of American business: lack of ethical orientation, male domination of executive ranks, uncertainty avoidance, and individualism. What’s more, GMAT scores may be inversely correlated with entrepreneurship.

The report’s authors, Raj Aggarwal, Joanne Goodell, and John Goodell, examined the GMAT scores of candidates in 25 countries over the 2004–2010 period. Using panel data analysis and other statistical procedures, including robustness tests, they examined the association of GMAT scores with cultural characteristics, controlling for demographic and economic factors (such as wealth levels) that may also influence GMAT scores. The four independent measures of culture used in this study were developed by Dutch researcher Geert Hofstede and have been used in hundreds of studies.

They found that female GMAT candidates scored lower than males, and that candidates from nations with the highest levels of ethics had the lowest GMAT scores. And they determined that GMAT scores are negatively related to masculinity and “power distance” and are positively related to uncertainty avoidance (safety-first behavior) and individualism.