Creativity seminar - the correlation between GMAT and entrepreneurial thinking

I would like to discuss about the article made by Shepherd, D., Douglas, E., Fitz-Simmons, J. (2008) MBA Admission Criteria and an Entrepreneurial Mind-Set: Evidence from “Western” Style MBAs in India and Thailand. Academy of Management Learning & Education, 7(2)

“We find that MBA students with higher GMAT scores have career mind-sets that are more averse to work effort and risk , and therefore, the GMAT may discriminate against applicants with a greater propensity to behave entrepreneurially. “ (Shepherd, D; p 158)

This quote can be found at the beginning of the article and has the purpose of summarizing the results of the research conducted. I do not deny the results and the tests conducted based on the information given, but I wonder about the reliability of the result. I thought about some factors that might have bised the results.

1.First of all, the sample size is very small. Due to this, the precision of the test results may not be accurate, since only some preferences of a narrow portion of the population size may show up.

2. In order to increase the reliability of the survey, the study should have included more variables that were not thoroughly discussed. Social and financial background or the desire to migrate towards the western countries as a future goal may also have some impact on the outcomes.

3. The case is valid only for the two countries from which the students were surveyed. Even though a sublime generalization is made towards the end of the reading, we should nevertheless consider the result applicable only for that narrow segment.

4. The surveyed group was composed of students who “were on average relatively young; all with at least a bachelor’s degree” (Shepherd, D. p 165). Statistics show that the average age of entrepreneur is 37.6 (Simon C. Parker “The Economics of Entrepreneurship: What We Know and What We Don’t” University of Durham, Durham, UK), meaning that most of these survey takers may later still turn out to disagree with part of the test results.

5. Top Universities in India require huge tuition fees (http://www.indiaedu.com/top-educational-institutes/top-universities/index.html, last visited on Sep 16 2008). Many students have the to get a loan in order to be able to attend. This financial pressure will determine them to become more risk adverse and prefer a “safer route”, meaning finding employment and a decent wage after graduation which will enable repayment of the debt. These variables could have been included in the test conducted.

6. GMAT is “designed to measure basic verbal, mathematical and analytical writing skills” (http://www.gmac.com/gmac, lat visited Sept 15, 2008). Overall it is a widely used testing platform that grades students based on the same scale. It examines among other things, the ability of the person to process information and conduct logical and analytical tasks. Top results may point out students that are clever, bright and quick thinkers. This, together with impressive work experience, good GPA and extracurricular activities are the criteria that top Universities look for.
In developing countries like India and Thailand, financial security is a priority. Top Universities offer students a better chance to attain that security, and the applicants that gain acceptance have all the reasons to assume a possible financially stable suture. Once this subconscious idea is present, there is the tendency of students to try to reduce risks and aim for a job that requires less uncertainty at an above average wage, which together with a high social status, may turn out to be sufficiently enough. High GMAT score may not “discriminate against applicants with a greater propensity to behave entrepreneurially” (Shepherd, D; p 158), but simply makes these people more risk averse and reluctant to take such a path.