Factors determining success in a graduate business program.
Business students (Surveys)
Graduate students (Surveys)
Academic achievement (Surveys)
Braunstein, Andrew W.
Pub Date:
Name: College Student Journal Publisher: Project Innovation (Alabama) Audience: Academic Format: Magazine/Journal Subject: Education Copyright: COPYRIGHT 2002 Project Innovation (Alabama) ISSN: 0146-3934
Date: Sept, 2002 Source Volume: 36 Source Issue: 3
Geographic Scope: United States Geographic Code: 1USA United States

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This study uses correlation and regression techniques to determine which variables are most closely related to the academic success of the recent graduates of a college's MBA program. The factors traditionally used by the MBA program as the primary determinants of admissions decisions--undergraduate grade point average and GMAT score--have the strongest positive correlations with graduate grade point average. Other variables of statistical significance include gender, type of undergraduate degree obtained, and years of work experience. The last factor is discussed in light of a recent proposal to waive the GMAT requirement for certain MBA applicants.

Introduction and Literature Review:

In recent years, a number of studies have been conducted which examine the academic performance of students enrolled in Master of Business Administration (MBA) programs. Most of the research has utilized data from single institutions, with the goal being to analyze which factors are most closely related to academic success, as measured by graduate grade point average. The current study makes use of data on recent graduates (1997-2000) of the MBA program at a medium-sized comprehensive private college in the New York metropolitan area. The roles of the traditional admissions decisions factors--undergraduate grade point average and Graduate Management Admissions Test (GMAT) score--in predicting graduate academic success are examined. Other variables included in the analysis are type of undergraduate degree obtained, undergraduate institution, gender, and years of work experience. Special attention is paid to the impact of the last variable.

Ahmadi, Raiszadeh, Farhad, and Helms (1997) examined the relationship between graduate GPA and a number of factors for a sample of 279 students enrolled in an AACSB-accredited MBA program. Using bivariate regression models, they found that undergraduate GPA and GMAT scores were significant variables in predicting academic success. They suggested, however, that the admissions process should also take into account non-quantitative measures or assessments such as writing samples and interviews. Wright and Palmer (1997) applied analysis of variance techniques (using a sample size of 201) to examine whether GMAT scores, undergraduate GPA, and age were statistically significantly different among groups of graduate students they had classified as high risk, questionable, or no risk based on their current graduate grade point averages. The authors concluded that the use of total GMAT scores in the admissions process may be misleading, and that admissions personnel may want to pay more attention to the specific verbal and quantitative components. Carver and King (1994) analyzed data for 467 students in an off-campus MBA program. They found that GMAT scores, undergraduate grade point average, and work experience were the best predictors of academic success. For students admitted as special exceptions, undergraduate institution and undergraduate major were found to be among the best predictors of graduate school grades. Arnold (1996) studied the academic performance of 126 individuals from an executive MBA program. He found that GMAT scores were the best indicator of academic success, but that including certain qualitative factors improved the overall fit of the model.

Whereas the works cited above took a number of independent variables into account, some studies have focused on the relationship between graduate academic performance and a single factor. Palmer and Wright (1996) specifically examined the relationship between age and performance in a graduate business program. They found that age was not statistically significant when the entire sample of students was taken into account. However, it was a significant factor for individuals who scored poorly on the verbal portion of the GMAT and for those in the upper portion of the age distribution. Schumacher et al. (1993) dealt with issues of computer and math anxiety as they related to MBA students, and calculated correlations between MBA grades and specific computer experiences and attitudes. Hancock (1999) concentrated on the issue of gender, comparing the performance of men and women on the GMAT relative to their academic performance in an MBA program. He found that the women in the sample performed significantly lower on the GMAT than did the men. However, there was no significant difference in graduate GPA between the groups. Thus he concluded that admissions personnel need to exercise caution when relying on GMAT scores in their admissions decisions. Adams and Hancock (2000) examined the relationship between years of work experience and MBA grade point average for a sample of 269 graduates from an urban university whose MBA program has a strong emphasis on entrepreneurship. They found that work experience was more closely correlated with academic success than were either GMAT score or undergraduate grade point average.

A number of the studies discussed above point out that each graduate business program should conduct its own empirical study, examining possible relationships between the academic performance of its students and any factors of interest. Given individual differences in MBA programs (in terms of location, percentage of fulltime students, most popular majors, etc.), the variables that are statistically significant in predicting academic success likely vary from one institution to another. Admissions personnel can develop their particular institutional requirements so as to admit those students with the best chance to succeed.

Data and Methodology:

The database consists of observations on 280 recent graduates (August 1997-June 2000) from an AACSB-accredited MBA program. The MBA program has an approximate enrollment of 300 students, of which about ten percent attend on a fulltime basis. The most popular choice of major is Financial Management. The dependent variable, used to measure academic success, is GPA upon graduation from the MBA program. The independent variables include GMAT total score, GMAT quantitative and verbal raw scores, undergraduate GPA, type of undergraduate degree (business or other), undergraduate institution (same as MBA or other), gender, and years of work experience. As in Adams and Hancock (2000), the work experience variable is measured by a proxy--years between the completion of the bachelor's degree and the first term of enrollment in the MBA program.

The role of the years of work experience variable in the analysis is of special importance to the administration and faculty. The usual admissions requirements for the school's MBA program emphasize the GMAT total and the undergraduate GPA (with some attention paid to the GMAT essay and letters of recommendation as well). In recent years, some of the administrators and faculty have suggested that the GMAT requirement should be waived for applicants with an impressive amount of work experience (assuming an acceptable undergraduate GPA). It is widely recognized that graduate business students with an extensive work background enhance the experiences of their classmates and of the faculty as well. Those contributions take place in classroom discussions, team projects, and within distance learning course chat groups and discussion boards. It is feared that the MBA program loses out on a number of these potentially valuable students during the admissions process. Speculation is that a number of individuals with considerable work experience may perform poorly on the GMAT (in large part due to a lengthy absence from an academic setting), and thus may be denied admission. The admissions office reports that some of those potential students will not even apply for admission to the program due to the GMAT requirement. They may be reluctant to take the test because they perceive that they will do poorly and/or because they do not want to take the time to prepare for the test. Furthermore, some of the college's closest competitors are currently willing to waive the GMAT requirement for applicants with considerable work experience.

Correlation and regression techniques were employed in an examination of the data. The primary goal was to ascertain which of the independent variables are most closely related to the academic success of the MBA students. Also of interest, however, were relationships between some of the independent variables used in the analysis.

Results and Discussion:

Table 1 displays descriptive statistics for all of the variables used in the analysis.

Table 2a presents the correlation coefficients between the dependent variable, GPA upon graduation from the MBA program, and each of the independent variables. Table 2b shows some important correlation coefficients for pairs of independent variables. Table 3 presents the results from a stepwise multiple regression. A coded work experience variable was employed due to a proposal that is currently under consideration in the admissions office. It has been suggested that a GMAT waiver should be granted to certain individuals whose undergraduate degree was obtained five or more years ago. Those individuals would be required to have a minimum undergraduate GPA of 3.0, to have been working steadily with evidence of growth in responsibilities, and to have a successful personal interview with admissions personnel. Thus a dichotomous variable was formed for work experience, distinguishing between those with fewer than five years of work experience and those with five or more years of experience.

The correlation analysis results indicate that the traditional factors used by the MBA program as the key determinants of admissions decisions--undergraduate grade point average and GMAT total score--indeed do have the strongest positive correlations with academic success as measured by graduate grade point average. Note that the correlation coefficient between undergraduate grade point average and GMAT total score is virtually zero. Thus it could be argued that those two factors represent distinct forms of academic ability, each having its own separate impact on one's ability to succeed in graduate studies. The work experience variable is also highly significantly correlated with grade point average upon graduation from the MBA program. Gender is found to be correlated with achievement in the graduate program in that females attain greater success. Females have significantly higher undergraduate GPAs than do males, but perform significantly worse on the GMAT. Perhaps somewhat surprisingly, those with undergraduate degrees in business perform marginally worse than those with undergraduate degrees in areas other than business. There is not strong evidence of a relationship between years of work experience and total GMAT score for those who have graduated from the MBA program.

We see from the stepwise multiple regression that 24% of the variation in graduate grade point average is explained by three factors: GMAT total, undergraduate grade point average, and years of work experience. That value for R squared is typical for studies that aim to predict performance in individual graduate business programs by means of a regression equation (for example, Ahmadi et al., 1997; Graham, 1991; Paolillo, 1982). Of crucial importance is the fact that all three of the independent variables in the equation are highly statistically significant as predictors of graduate grade point average, and that those variables have low correlations with one another.

Whereas the empirical results seem to generally favor the institution's traditional policy of basing admissions decisions primarily on one's undergraduate record and standardized test scores, there is also ample evidence to support those who propose to bring the work experience factor into the decision making mix. Those individuals with extensive work experience, as discussed earlier, are capable of making many contributions to the academic environment. Furthermore, the results indicate that there is a very strong positive relationship between years of work experience and academic achievement in the MBA program. Some highly experienced individuals are known to be reluctant to take the GMAT, and most are aware that there are other graduate schools of business that will accept them without it. Careful crafting of a policy waiving the GMAT requirement based on extensive work experience would likely bring to the program individuals who would be valuable contributors and who would succeed academically as well.


Adams, A.J., & Hancock, T. (2000). Work experience as a predictor of MBA performance. College Student Journal, 30(2), 211-216.

Ahmadi, M., Raiszadeh, F., & Helms, M. (1997). An examination of the admissions criteria for the MBA programs: a case study. Education, 117, 540-546.

Arnold, L.R. (1996). Applicant evaluation in an executive MBA program. Journal of Education for Business, 71(5), 277-283.

Carver, M.R., & King, T.E. (1994). An empirical investigation of the MBA admission criteria for nontraditional programs. Journal of Education for Business, 70(2), 94-98.

Graham, L.D. (1991). Predicting academic success of students in a master of business administration program. Educational and Psychological Measurement, 51, 721-727.

Hancock, T.M. (1999). The gender difference: validity of standardized admission tests in predicting MBA performance. Journal of Education for Business, 75(2), 91-93.

Palmer, J.C., & Wright, R.E. (1996). Predicting academic performance in graduate business programs: when does age make a difference? Delta Pi Epsilon Journal, 38, 72-80.

Paolillo, J.G.P. (1982). The predictive validity of selected admissions variables relative to grade point average earned in a master of business administration program. Educational and Psychological Measurement, 42, 1163-1167.

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Wright, R.E., & Palmer, J.C. (1997). Examining performance predictors for differentially successful MBA students. College Student Journal, 31(2), 276-281.

Wright, R.E., & Palmer, J.C. (1998). Predicting performance of above and below average performers in graduate business schools: a split sample regression analysis. Educational Research Quarterly, 22(1), 72-79.
Table 1 -
Descriptive Statistics

Variable                        Mean     Standard Deviation

MBA GPA *                         3.57           .23
Gender (a)                         .45           .50
Years of Work Experience (b)       .55           .50
Undergraduate Degree (c)           .61           .49
Undergraduate Institution (d)      .31           .47
GMAT Total                      471.50         82.33
GMAT Verbal (raw)                27.25          6.31
GMAT Quant (raw)                 27.40          7.29
Undergraduate GPA                 3.06           .46

* dependent variable

(a) 0=male, 1=female

(b) 0=fewer than five years, 1=five years or more

(c) 0=non-business degree, 1=business degree

(d) 0=different from MBA, 1=same as MBA

sample size = 280

Table 2a -
Correlations of Independent Variables with Graduate GPA

Gender                       .118 **
Work Experience              .155 ***
Undergraduate Degree        -.108 *
Undergraduate Institution    .025
GMAT Total                   .336 ***
GMAT Verbal                  .293 ***
GMAT Quant                   .284 ***
Undergraduate GPA            .311 ***

* significant at. 10 level

** significant at .05 level

*** significant at .01 level

Table 2b -
Some Important Correlations for Pairs of Independent Variables

Gender and GMAT Total                   -.243 ***
Gender and Undergraduate GPA             .235 ***
GMAT Total and Work Experience           .036
GMAT Total and Undergraduate GPA         .003
Undergraduate GPA and Work Experience   -.113 *

* significant at. 10 level

* significant at .05 level

** significant at .01 level

Table 3 -
Results of Stepwise Multiple Regression

Multiple R                   .4908
R Squared                    .2409
Standard Error of Estimate   .1996

Variable            Coefficient   Standard Error    T Statistic

Intercept            2.599           .10715        24.25467 (***)
GMAT Total            .000909        .000145       6.25679 (***)
Undergraduate GPA     .16312         .026054       6.26081 (***)
Work Experience       .082422        .024135       3.41513 (***)

*** significant at .001 level

Hagan School of Business
Iona College
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