Saturday, April 14, 2012

GMAC looks to diversify, may enter soft skills

Graduate Management Admission Council (GMAC), the body that administers the Graduate Management Admission Test (GMAT) for entry into thousands of business schools globally, sees India as a phenomenal market, where it can double its presence in another five years. David A. Wilson, President and CEO of GMAC, spoke in an interview on the changing format of GMAT, rising number of women MBA aspirants and India strategy. Edited excerpts:

What changes are you making to GMAT from June?
What we have done is, we have taken out one of the two essays in the analytical writing and removed it because we found not much information is coming out of that. There was high correlation with first essay. By talking to 740 faculties in last three or four years around the world, we have learnt that the way business is being transacted has changed. The way schools are teaching young people has changed. They would like if we could augment GMAT not only with quantitative and verbal, but also introduce integrated reasoning. It will be a new section, it will be a 30 minutes section…it will be a replacement of analytical writing assessment. You get a separate score for the integrated reasoning section.

Businesses have always emphasized on reasoning, but a global business education test like GMAT took decades to incorporate it...
If you think about reasoning, we had critical reasoning skills in GMAT for a long time. What we have seen in recent years is some schools have changed. GMAT is an exam by business schools for business schools. Schools have changed their curriculum where there is not only critical reasoning, but also integrated reasoning. What business schools are trying to do is create a microcosm of what the graduates are going to face when they go to the real world. So what we are trying to do with the exam is help schools get a better assessment of how well their students will be able to cope with the microcosm of the real world. B-schools think their classroom is the microcosm of the real world. We got this by talking to the faculty, by talking to the recruiters and employers on what skills are going to be critical. Employers support that completely.

We have seen that an increasing number of women are now opting for an MBA. This trend is visible in India, but in China, Indonesia, Thailand and Taiwan, women outnumber men. How do you read this trend?
If you look at China in particular, then you will see a dramatic increase, a lot of young people taking GMAT. What they are opting for is one-year specialized degrees, more pre-experience (courses). You look at those one-year degrees that give you a specific focus on finance management, accounting, energy, healthcare, public policy. What you are seeing is that a number of people, especially young women, opt for such programmes that allow them to write (GMAT) from the undergraduate schools. Management education is still dominated by engineers in India and more women are not seen in engineering too, and in China it’s not like that. So local trends play out.

While European and American students are going for specialized MBAs, in India there seems to be an increasing demand for a generalized MBA.
If you look at MBA students typically, you can put them in two buckets. One who want to change their career. They will come in with a solid background in let’s say accounting, finance, public policy, they want to change their career. They will go for typically a full-time MBA programme, at the end of which they will see lot of recruiters coming to campus. The others who want a career enhancement, build their skills and stay where they are. You can find those in part-time programmes, specialized programmes. Why are you seeing this—because it depends on the economy.

Your study has shown India’s demand for an American business education degree is dropping (from 67% Indian GMAT scores sent to US schools in 2007 to 55% in 2011). Comment.
(Look at the) growth of high-quality programmes across the world. Now you can go to South America, Africa, you can go to Middle East, Europe. Other part is that business network is far more global now than ever. Young people like to immerse in other cultures and are adventurous. Oh yes, quality of Indian business schools is improving. But faculty is a critical thing here and everywhere.

In 2011, 77% of Chinese students who took GMAT were below 25 years of age, but in India the number is only 34%.
In China, we have seen dramatic growth in under 25-year-old aspirants, and females. They are the majority, applying for the pre-experience masters programmes. GMAT score is applicable for five years, so a lot of young people are realizing that the best time to take the GMAT is when they are in the last year of undergraduate programme. They are used to exams, have time to study, etc. You can see in American schools a lot of young Chinese applying for those specialized courses in accounting and finance management. It has not caught up in India. Not enough Indians are aware that they can go for many specialized MBAs without any experience. It is in recent times that you see such surge in China.

In 2007, about 21,500 Indians took GMAT whereas in 2011 the number was a little over 25,000. That’s a small growth if you look at the size of the country and demand for quality higher education?
If you map that, you will see that it peaked in 2009 and came down. We see the softening in the volume immediately with devaluation of the Indian rupee in 2009. When you look at 2012, it will be dramatically higher.

What’s your India strategy now?
I look at India in a generational way… I want to look at 2020, 2030. It’s a stable democracy, very strong ethic in respect to education, entrepreneurial, it’s dramatically growing. India will need more and more managers. Look at Indian companies, the Tatas, Infosys (Ltd), they are exciting companies. The growth potential here is phenomenal...the absolute scale is here; the commitment to education is here, the demand for managers and leaders is here. In five years, we will double India presence.

What next for GMAC?
When I began in 1995, GMAC was not global, it’s now. We have now embraced more technology, and we did not have then (as is now) strategic alliance partnerships. Those principles still apply, but what I think is — what we are going to be offering to the business school community except a very strong test, what else we can do — one of the things we can think of is the whole question of soft skills, non-cognitive skills. That whole arena is fascinating because what B-schools will be requiring in future and are we measuring that? The challenge for going forward is new assessments, new instruments to add greater value to enterprises and to the public sector. We are good at assessment, we have great channel…we need to work on the content side. We also need to expand our global reach.

So you could diversify into soft skills?
We are looking at all kinds of things.

Source: Mint, April 14, 2012

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