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One of the metrics to measure the popularity of a B-school is application-to-admission ratio.

S. Vaidhyasubramaniam

As the 2010-11 admission season for B-schools kicks off, we need to take stock of the prevailing admission process simply because there is scope for a lot of improvement.

The Common Admission Test (CAT) scores are used for admission to Indian Institutes of Management (IIMs) and other premier B-schools. Every student attempts to bell the CAT with a hope that he or she will secure admission in an IIM or in any other premier B-school. Hence, students are forthcoming and pay the application fee of Rs 1,300 for the CAT.

Management institutes other than IIMs require students to apply separately to them with an application fee that is equally expensive and also set application deadlines that fall well before the CAT results are declared. The result: Double application fees!

The entire exercise of issuing application forms with deadlines before the CAT results are declared leverages, to the maximum extent, the aspirations of students to get admitted in these B-schools. Thus, application sale is becoming a lucrative revenue model for the B-schools, including IIMs.

Be that as it may, one of the metrics to measure the popularity of a B-school is application-to-admission ratio.

This ratio is often used to compare our B-schools with other schools globally. Is this a valid comparison considering that the scene is different for admission to MBA programs in the US based B-schools? The application-to-admission ratio is calculated by dividing the number of applications by the maximum number of seats available. For example, if there are 20,000 applications for 100 seats, the application-to-admission ratio will be 200:1.

The Harvard Business School (HBS) is one of the world’s leading B-schools and the application-to-admission ratio for their prestigious MBA programme in 2008 was approximately 9:1. Contrast this with the ratio in India.

More than 2.5 lakh students appeared for the CAT in 2008 to fill about 1,800 seats in the IIMs. Going by the application-to-admissions ratio of 138:1, the IIMs come through as more selective than the Ivy League Universities! Besides this, many institutions also use CAT scores for MBA admissions.

Assuming that there are 50 such institutes each having 200 seats, taking the total number of seats (including IIMs) to 11,800, the ratio for the entire system still stands at 21:1.

Is it correct to use this ratio as a barometer for the quality of Indian B-schools and then arrive at a conclusion that B-schools in India are better than the best in the world? The answer is NO.

Admission to premier B-schools in the US, besides other parameters, is based on Graduate Management Admission Test (GMAT) scores and students have the benefit of knowing their scores before they apply.

The cost of an MBA application at HBS for the year 2009 is a non-refundable $235. Application fee for B-schools of comparable type also fall in the same range or even higher.

Applicants who have a good GMAT score and chances of reasonable success in the application process will alone come forward to spend $235 for a HBS MBA application. This is one of the reasons (not the only one) why the ratio is 9:1 and does not make HBS inferior to a B-school with a higher ratio.

In India, the application deadline in some premier B-schools is set before the CAT results are declared.

If applications for admissions are issued after the CAT results are announced, then the situation will be different.

It will be a real test for schools that currently boast of a high application-to-admission ratio in the order of 30:1 or 40:1.

This is because students will be cautious and not spend huge sums on buying application forms as they have the benefit of knowing their CAT scores which more or less determines their chances.

The government can administer CAT as a National Testing Service on the lines of GMAT and mandate all B-schools to partner this initiative.

Since CAT is also being administered online from this year, the frequency of the exam can be increased gradually to eventually enable students to register and appear on any day, subject to availability.

After the CAT scores are obtained, candidates can apply to individual B-schools based on their scores. This will help students to save on their application fee budgets as they do not have to apply blindly to all institutes. Such a move will also bring to light the true standing of an institute as measured by the application-to-admission ratio.

The best institutes will have the highest ratios as they will attract the maximum applications. For the academic year 2010-11, the IIMs have already advertised for CAT and many B-schools have also followed suit by releasing advertisements for the 2010-11 admissions. It is now the opportune time for the policy-makers to make CAT a National Testing Service. In other words, ‘Nationalise CAT!’

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