The new kid on the block in MBA qualifying tests is finding Canada a tough nut to crack, but GRE claims an ace up its sleeve may soon leave Canadian students with an alternative to the GMAT.

Compulsory testing for anyone wanting a seat in MBA programs has become a sizable business in Canada — $2-million last year alone.

While the Graduate Management Admission Council of McLean, Va., has had the field to itself for 55 years with its GMAT test, a new contender has emerged. Educational Testing Services of Princeton, N.J., has launched its GRE exam and is lobbying fiercely at business schools across Canada to have its 3½-hour test replace, or be accepted as an alternative to, the 4-hour GMAT.

To date, however, only one school — the Queen's School of Business — has signed on with the GRE (Graduate Records Exam) and only under special circumstances. Queen's says any applicant with a PhD or master's degree who has taken the GRE in the past five years can use that as a substitute for the compulsory GMAT (Graduate Management Assessment Test).

"We wanted to increase the diversity of the student base and we wanted to accommodate those who already had post-graduate degrees in fields other than business so we now accept the GRE," says Scott Carson, director of the Queen's MBA program. "I must add that they represent a very small percentage of applicants right now."

That limited market has not stopped Educational Testing from claiming a victory. It issued a news release trumpeting the Queen's decision and announcing that New York University's Stern School of Business and the Wharton School at the University of Pennsylvania had also joined other top schools such as Harvard, MIT, Stanford and the China Europe International Business School in accepting its new GRE.

At the time David Payne, ETS vice-president and chief operating officer, said the decision to accept GRE just made good business sense.

"Opening admissions to students who wish to submit GRE scores will improve the size, diversity and quality of the applicant pool and student body," he said. "These are the kinds of tangible benefits that business schools value and what the global business community increasingly demands to meet the challenges of the 21st century."

Despite the high prose, it seems Canadian business schools are not buying Mr. Payne's message. Their attitude seems to be "why fix it if it ain't broke?"

"We have no intention of changing from GMAT to the GRE at the moment," says Richard Powers, associate dean and executive director, MBA and master of finance programs, of the Rotman School of Management at the University of Toronto. "What we would need to know first is what GRE offers that GMAT does not."

Michel Patry, president of the Canadian Federation of Business School Deans and director of HEC Montréal, says the federation does not take a position on GMAT and GRE. At HEC, however, GMAT is the required exam for English speaking students.

"I know the people from Educational Testing have been visiting business schools making representations to deans but I believe to date they have not made major inroads," he says.

At York University's Schulich School of Business, Charmaine Courtis, executive director of student services and international relations, says Schulich has used GMAT since the school started and has no plans to change.

"I know there has been a lot of buzz and that representatives from GRE have visited all the campuses but there is no evidence the GRE is any better than GMAT, which is the best way we have found of assessing candidates to date.

"We can't see any reason to change."

All schools say that GMAT and GRE serve the same purpose. They are simply one of the ways schools assess the ability of applicants to make a success of their MBA courses and are part of a process that includes reviewing an applicant's past marks and his or her work experience.

"Your GMAT score (ranked on a scale of between 200 and 800) is not a deciding factor," says Rotman's Mr. Powers. "You can score poorly on it but if you had a great GPA (grade point average) and impressive work experience you can still make it in."

GMAT and GRE, not surprisingly, are similar in form. In fact, until three years ago Educational Testing wrote the annual GMAT test for GMAC under contract. When it lost that contract it decided to launch its own alternative, says Mr. Payne.

Each is delivered online in secure third-party test centres. GRE (the cost is about $184) uses those of sister company Prometric while GMAC ($250) uses Pearson VUE.

The test comes in three parts. The first two are multiple-choice questions designed to measure verbal and quantitative skills, while the last section involves writing two essays. The first makes an argument in favour of a proposition of the writer's choice, while the second analyzes and critiques a given statement or proposition.

Does GMAT deliver benefits to business schools when it comes to choosing the best applicants? Most certainly, says Rotman's Mr. Powers.

"We only get maybe four to six people a year out of a class of 265 who don't perform up to expectations," he says. "We asked our psychologists if there was a better way of doing it and bringing that number down.

"They just laughed and said four to six out of 265 is a phenomenal rate."

GRE, however, believes it may have an ace up its sleeve and it plans to play that card in December when it unveils the first tests that it says can accurately judge non-cognitive skills such as creativity and the ability to work in teams. The questionnaire will be given to third parties who know applicants well.

"It will be the first of its kind and we think it will greatly help business schools assess things they have never been able to judge before," says Mr. Payne.

Special to The Globe and Mail