MAKING SENSE -- September 16, 2013 at 7:51 AM ET
Three traits to ace the GMAT and run an unethical business
Do you have what it takes to score well on the GMAT? New research suggests high scores are associated with less of a tendency for ethical and entrepreneurial business activity. Photo courtesy of Flickr user bitslice cipher.
Didn't do so well on the GMAT? You may be a more ethical and entrepreneurial business leader for it. Higher results on the Graduate Management Admission Test -- the entrance exam required for most graduate business schools -- are associated with less of a tendency for ethical behavior in business school and business professions. That's the conclusion of a recent study published in the Journal of Business Ethics.
The unsavory flavor of business school culture earned renewed buzz after Jodi Kantor captured the moneyed and gendered culture of one of this country's most exclusive business schools in last weekend's New York Times. Harvard Business School administrators had noticed that equally-qualified women routinely didn't perform as well as their male counterparts once matriculating. In response, the school experimented with a "gender make-over."
The GMAT study's authors, Raj Aggarwal, Joanne Goodell and John Goodell started with a very different but related gender gap that resulted in the following puzzle: if women achieve at least as much success as men in graduate business school and in business professions, why are their average GMAT scores significantly lower than men's?
Aggarwal, the former dean of the University of Akron College of Business Administration, and John Goodell, an assistant professor of finance at Akron, who's also served on the school's admissions committee, both attended business school at one time themselves, while Joanne is a professor of education at Cleveland State.
Questions on the GMAT test everything from mathematics to writing. Chart courtesy of Graduate Management Admission Council (GMAC).
They looked at the GMAT scores of business school candidates in 25 countries from 2004 to 2010 -- the methodology of which Vivek Wadhwa -- a friend of the Making Sen$e Business Desk -- outlined recently in the Washington Post.
Narrowing in on cultural factors across national differences, they examined traits that are prevalent in corporate settings, many of which, they suggest, have significant influence on unethical business behavior.
Here are three traits that make you more likely to succeed on the GMAT (and how they may affect your business performance):
You Don't Like Taking Risks: If you're conservative about taking risks, you're likely to score higher. Researchers found a positive association between "uncertainty avoidance" (what Wadhwa calls "safety first behavior'), and doing well on the test that would seem to discourage entrepreneurial activity.
You're Individualistic: Test-takers from more individualistic backgrounds also do better on the GMAT. Individualism has plenty of positive associations in the business community, like more competitive drive, but the self-reliance seen among successful test-takers makes them less likely to adapt their behavior to formal codes of ethics and informal norms around them.
You're Less Ethical: Higher GMAT scores are associated with less of a tendency for ethical behavior. Focus on freedom and achievement means high-scorers are more inclined to see their actions as above reproach, explained Goodell.
It's reasonable, the authors conclude, that this behavior is more pronounced in higher ranked schools and perhaps more prestigious corporate settings where higher GMAT scores are more highly valued.
So what about the GMAT allows people with these traits to shine?
There is research exploring how multiple choice questions, experiential bias, guessing penalties and time constraints differentially impact test-takers based on gender and background, something the Graduate Management Admission Council (GMAC) -- the organization that develops the test -- acknowledges and says they have designed against.
But Goodell and his co-authors have not tested for any causal relationship between the mechanics of the GMAT and traits of those who succeed. Nor did they subject individual high-scorers to ethics tests.
And they did find some negative associations between unsavory cultural traits and higher scores. Higher GMAT scores are associated with less gender differentiation and less emphasis on social hierarchy (meaning that test-takers who display cultural traits of male dominance and a preference for hierarchy score lower).
Their findings are limited to a positive association between high scores and the expression of the above-listed cultural characteristics.
Maybe it's the nature of the test or the nature of people who choose to take it, says Goodell. "Do women score less well on the GMAT because more talented women choose careers other than business? Can business schools make graduate study more appealing to women? Can business schools focus more on developing trust-building and team-building amongst its students?"
Those curricular modifications are exactly what this study is all about, Goodell says. The researchers have no interest in seeing the GMAT disappear. Examining GMAT scores across countries, at a minimum, affords insights into what cultural traits are likely being overrepresented in business schools -- findings worth knowing, Goodell says, so that business school leaders can take action, particularly to incorporate more collaborative exercises into the curriculum.
GMAC Vice President of Research and Development Lawrence Rudner doesn't it see that way. "I teach statistics classes, and I have examples of the misuse of statistics," he told Businessweek. "This example will now go into my portfolio. It's interesting but not actionable."
As examples go, here are some sample test questions from GMAC. Can you answer them correctly, and would that say anything about your cultural traits or performance as a business person?