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GRE or GMAT for Business School

Fact #1: Essentially, every MBA program on the planet accepts the GMAT.  Not all require it, but all would accept it.

Fact #2: Almost all of them also accept the GRE. Thus, students have a choice.

Fact #3: ETS, the company that produces the GRE, heavily advertises Fact #2.

Fact #4: In 2015, ETS issued a press release about the advantages of changing your answer—something you can do on the GRE and can’t do on the GMAT.  On the GRE, you can go back to any question in the section and change the answer during the time of the section.  On the GMAT, because of the CAT, once you press enter, the question is gone forever. Needless to say, this ETS press release represents ETS’s pro-GRE view.

Fact #5: in 2017, GMAC, the company that creates the GMAT, published The GMAT Advantage.   Needless to say, this document represents GMAC’s pro-GMAT view.

Obviously, all this is likely to be confusing to folks who are deciding which test to take on their path to business school.  The first thing I will say is: let’s use some critical thinking, the very skills needed in the GMAT Critical Reasoning.  ETS, the company that produces the GRE, is a very large, financially successful company.  GMAC, the company that produces the GMAT, is another very large, financial successful company.  In general, very large, financially successful companies are particularly skilled at saying things that get your money into their pockets.  Neither company is entirely saintly and neither company is abominable.  Both companies are in some respects interested in helping students achieve their academic goals, and at some level, each is fundamentally interested in its bottom line.  Caveat emptor.

Of course, Magoosh is also a company, a considerably smaller company.  Because we can provide BOTH excellent GMAT preparation AND excellent GRE preparation, from a bottom-line perspective we are entirely indifferent as to which test you take for business school, so that gives us at least a certain degree of impartiality in this discussion.


GRE vs. GMAT for Business School

About a quarter million folks worldwide take the GMAT every year.  Essentially, all of these test takers are headed toward some kind graduate management program (MBA, Masters of Finance, etc.)  More than half a million test takers take the GRE each year: about 655,000 in 2012, for example.  The vast majority of GRE test takers are headed toward some academic graduate field: data released in 2012 suggests that about 42% are headed toward some kind of natural science or engineering, about 18% toward a social science, about 8% toward arts and the humanities, and about 3% toward graduate management programs.  Perhaps simplistically, you could imagine yourself in a room as one of 100 test-taking applicants.  If you take the GMAT, essentially you are standing with 99 other people who, like you, want graduate management degrees.  If you take the GRE, you are standing in a very different room: 42 techie types, science & engineering; 18 social scientists; 8 artsy types, poets or painters or something; and only two other business-oriented people besides you.  Two very different rooms.  Is one better for you?  Are you better off being compared to one group vs. the other?  That very much depends on your own strengths and weaknesses.

What about the fact that any given feature purportedly make one test easier or harder than the other test?  Well, think about it this way.  Suppose the somewhat unlikely scenario in which one of the two tests introduced Feature X, which made that test decidedly easier.  Presumably, everyone taking that test would do better, and all the scores would shift up, but it’s not necessarily clear than anyone’s percentile ranking would change that much.  You see, if something makes one test easier or harder, this makes it that way for every test taker, and all the percentiles shift up or down the same way, like a vast tide.  On average, everyone would stay in the same place. The question is not whether one test or the other is easier or harder in some abstract sense: what matters is how YOU do, what’s easier or hard for YOU.  What matters most is: whichever test you are taking, how to you advance in your own percentile placement?  General features of either test don’t necessarily matter much at all for this particular question.

One variable to watch is the GMAT Integrated Reasoning.  The folks at GMAC think the IR section is fantastic, and they will tell you it is statistically valid in what it measures: all true and, again, that’s a company touting its own product.  We know that businesses had a hand in designing the IR section: will this have any influence in how it is valued some day?  Hard to say.  We know that IR has been de-emphasized in admission over the past couple years, because many GMAT submitted have been pre-IR, GMATs taken before June 5, 2012 (the date that IR was introduced), but all those pre-IR GMATs will expire in a couple years.  Once every single GMAT has an IR score attached, will the IR score play a more significant role in admission?  Will that have some implication for folks who take the GRE instead?  None of these questions has an obvious answer: it will be interesting to see how all that plays out over the next couple years.

The writer John Byrne, in an article on Poets and Quants, cites some data that suggest that some students have gotten into good business schools with lower GRE scores.   Can we draw a conclusion from this?  Hard to say.  As Mr. Byrne astutely says in that article, “Of course, scores on entrance exams are only one of many variables in an MBA application. It’s also possible that the non-traditional students taking the GRE may offer a class greater diversity and also have a more differentiated narrative to entice an acceptance from admissions.” We have to remember, of course, that the folks who work on admission committees (adcom) at business schools are NOT dumb—far from it, in fact!  If there were some way in which the exact same applicant could (a) take the GMAT, get a certain percentile, and not get accepted, or (b) take the GRE, get the same percentile, and get accepted, then all that would imply that the adcom folks were being influenced, essentially, by the candidate’s choice of test, which of course is not, in and of itself, an admission factor.   The folks on adcom are just too intelligent for that!!  Those folks are making complex multi-dimensional decisions based on a wide variety of factors, and they are not going to miss being influenced by something so basic.

I will give some pure speculation here. What might make some of those GRE-takers more attractive to business school adcom?  I don’t believe one test vs. the other, GRE vs. GMAT, makes a candidate inherently more attractive to adcom.  Imagine that hypothetical Candidate X studied history and sociology in her undergrad; imagine that Candidate X loves poetry and cares about issues of social justice; imagine that Candidate X took the GRE, initially planning to get a Ph.D. in Anthropology so she could go out and save the world, but after some reflection, decided that her save-the-world efforts would be better directed in the business world, so she applies with her GRE to business school to get an MBA.  That’s a very interesting, very unusual business school candidate!!  That candidate is considerably more thought-provoking than someone with a high GMAT score who just says, “Well, I want an MBA so I can make a whole donkey cart of money.”

This is a really important point, quite apart from which test you choose.   Yes, get the highest score you can on either the GRE or the GMAT, but your application to business school is not going to be particularly compelling unless you have some kind of vision, some kind of unique story about how your particular path prepares you to do the particular kind of work that you will be excited to do.  It may be that reading some history, or sociology, or philosophy, or poetry, or so forth will help you clarify and communicate your own values and your own unique vision and potential.   You have to be very excited about where your life is going, and you have to communicate that excitement to others.  That’s 100x more important than the choice of test!


Back to GMAT vs. GRE

OK, that discussion carried us a little far afield.  Which test should you take?  I will give a couple scenarios.

If you have already invested consider time in learning the ins and outs of one of these two tests, then stick with the one you know.  The tests are different enough that if you change from one to another there’s going to be a steep learning curve on some aspects of the new test.  The grass always looks greener.  Most likely, you are better served by continuing to master the one in which you are already invested considerable effort.  Stay with the one you’re with.

If you are just beginning, and don’t know much about either, then here’s what I recommend.  Buy two cheap prep books, one for the GMAT and one for the GRE.  It doesn’t matter if they are particularly good or bad.  It doesn’t matter whether they are the most recent edition: you should be able to find earlier editions of prep books for nearly nothing.  Study for each test for maybe an hour at most, just to get the gist of the question types, and then take each test cold.  (Don’t do them both in the same day!)  Take one test cold, with virtually no prep.  Then, another day, take the other test cold, with virtually no prep.  If you do considerably better in one test, a considerably higher percentile, then that’s your test.   Check out these blogs for information about GMAT percentiles and GRE percentiles.

What if you take both test with about the same preparation and your scores are about the same: what should you do?  Well, to some extent, for you, it may not really matter which test you take.  I would say: trust your own intuition.  Yes, both tests are hard; neither one is a picnic.  Once you have a basic familiarity with both tests, simply ask yourself: where am I more likely to thrive? where am I more likely to shine?  Don’t think about it: instead, trust your gut.  If this is hard for you, ask someone who knows you well and who also knows both tests well.  Ask them, trust their answer.  However you make your decision, make it and don’t look back.

That last part is the most important.  However you decide, simply decide on one test or the other, and don’t look back. Commit yourself 100% to mastering that particular test.  Remember, whichever one you have chosen, Magoosh has the content and strategies to help you advance significantly in your percentile placement on your chosen test.

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One Response to GRE or GMAT for Business School

  1. Jeff September 2, 2015 at 10:44 am #

    Hi Mike,

    Some of the grad school programs I’m looking at ONLY take the GMAT (or strongly prefer the GMAT), but others require the GRE. I’m signed up for the “ultimate GRE” program with you folks, and have all the “best” collateral study material, but wonder if you might have a proposal/suggestions for how to best study for “both” concurrently?


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