stat help

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Year

Admissions

Enrollment

1

86

54

2

108

77

3

134

91

4

141

96

5

154

106

Wayne McDonald, the director of the program, is currently putting the second phase of the plan into action. He knows that in order for the MBA program at Horton to attain national recognition they must become more selective in the admissions process. The number of applicants is now large enough to do this without falling below a critical mass of 60 enrolled students each year.

The major issue facing Wayne and the MBA program is how to go about selecting students into the program. Wayne recently met with the MBA Admissions Committee which consists of himself and two faculty members, Dr. Susan Thompson, who is a finance professor, and Dr. Hector Gonzalez, who is a marketing professor.

Wayne: Thanks for coming to the meeting today. As you both know, our recruiting effort over the past five years has been extremely successful. We were able to exceed our original enrollment goal last year. While many of our students have been outstanding and have given our program visibility in the business community, we have had a number of weak performers. Professors have watered down their courses to keep these people afloat in the program. If we are to have a nationally recognized, quality MBA program, we must become stricter in our admission policies. Fortunately, we are now at the point where we can be much more selective and still have our minimum critical mass of 60 enrolled students each year.

Susan: Wayne is right. Our current admission standards require a minimum score of 400 on the GMAT and a minimum undergraduate grade point average of 2.0. Obviously, this is not much of a hurdle. Personally, I would like to see the minimum requirements set at 580 on the GMAT and 2.75 for the undergraduate grade point average.

Wayne: Well, raising the minimums is one way of going about it, but there are many other factors that determine the degree of success a student has in our MBA program. We should consider these factors in our decision making process.

Hector: Too bad we don't know in advance which students are going to excel. Wayne, do you know what other schools are doing?

Wayne: From conferences that I've attended, I have found that many MBA programs put a lot of emphasis on the GMAT score and the undergraduate grade point average of the student. While some schools set minimum entrance requirement on each of these criteria as we do currently, other schools combine these measures into a single overall score. For instance, there is a 'formula score' that many schools use which multiplies the undergraduate GPA by 200 and adds the result to the GMAT score. If the formula score is above a certain figure, say 1000, then the student is considered to be admissible.

Susan: But there are so many other factors to consider. Surely we don't want our admissions decision to be based solely on a formula. There are many students who attend colleges with high grade inflation. Those applicants would have an unfair advantage over applicants from stronger schools with regard to undergraduate grade point average.

Hector: Yes, I agree. There are also studies that have indicated the GMAT is not a strong predictor of success in graduate school for many reasons, including cultural bias.

Wayne: I am not advocating that we go to a strictly mathematical basis for making our decisions. However, higher minimum standards than we currently have or some sort of formula involving GMAT and undergraduate grade point average might be a useful screening device for sifting through applicants.

Susan: I'm not opposed to your suggestion. Such an approach could be used to identify those students with high potential for succeeding in our program. In a sense, many of these decisions could be automated.

Wayne: That would certainly be a great timesaver. Our admissions committee would only have to meet to discuss those applicants with other strong characteristics or extenuating circumstances.

Susan: Excellent idea! Now, if we go with raising the minimum requirements for GMAT and undergraduate GPA, how much should we raise them? Or if we go with a combined score approach, what formula should we use and how should we set its cutoff values?

Wayne: We could go with your earlier suggestion of a 580/2.75 minimum requirement or with the formula score I described earlier. I could talk with directors of other MBA programs to get some feel for how they set their cutoff criteria. After we gain some experience with future admissions, we could adjust the cutoff criteria.

Hector: Why wait until then? We have five yeas worth of data already! We should be able to develop our own criteria based on our own past experience.

Susan: We might even want to consider developing our own formu1a

Wayne: Great ideas! That's why I like working with the two of you on this committee. However, I would limit the data to the last two years because of several changes we made in the program a few years back. The data for the last two years are more reflective of our current program.

Hector: In looking at these data, how are we going to measure the degree to which a student is successful in our program? Whether they graduate or not?

Wayne: Fotunately or unfortunately, depending on how you look at it, practically all of our students have eventually graduated. One of the things we are trying to accomplish is to make our program more rigorous and demanding, to raise the level of quality. If this is going to happen, we have to be more selective with the students we admit.

Susan: Why not consider the grade point average of the student at the end of the program?

Wayne: The major problem there is that the students in our program do not take the same set of courses in their second year because they select different areas of concentration. Some go into marketing, some into finance, others into either accounting or management. There is a real lack of comparability in those final GPA figures. But what we might do is look at the first year GPA in the MBA program. The courses taken by students in the first year are essentially the same because they are required core courses. It is not until their second year that they began taking elective courses in the different concentration areas. What first-year MBA grade point average would the two of you, as faculty members, define as indicating a successful first year?

Hector: Given the breadth of those first-year core courses, their level of difficulty, and our mild degree of grade inflation, I would say that any of our students in the past two yeas with at least a 3.2 average would be considered successful in the first year. Would you agree, Susan?

Susan: I believe most of the faculty would go along with that.

Wayne: Don't set your goals too high! Remember, we need at least 60 students per year to even have a program. We probably need to look at the data to see what's possible.

Hector: When can we get access to the past data? I really would like to get started.

Wayne: I'll have one of the staff members write a database program that will pull up the relevant information on all students who have completed the first year of the program in the past two years.

Susan: Please have a copy of the data set put on a disk for me so that I can play with the data on my computer at home.

Hector: Just send mine through the electronic mail. I should have some time tomorrow to look at it.

Wayne: I'll get the data to you as soon as I can. Let's plan to meet again in two weeks to see what we have discovered by then. I look forward to hearing your ideas.

Assignment

Wayne McDonald's assistant gathered the data for the past two yeas of experience with the Horton MBA program and stored the information in the file HORTON.XLS on Blackboard. The Data Description section provides a partial listing of the data along with variable definitions.

Using this data set and other information given in the case, help Wayne McDonald and the MBA Admissions Committee develop admissions guidelines for the Horton MBA program. In particular, you should examine the usefulness of the suggested guidelines discussed by the MBA Admissions Committee and consider the possibility of modifying their proposals. Keep in mind that you want to set the guidelines in such a way that the best students are selected and the minimum enrollment of 60 students per year is reached. For each proposal you consider, check for any potential bias in the guidelines, i.e., check to see if there were any unsuccessful students in the past two years who meet the proposed guidelines or any successful students in the past two years who would not meet the proposed guidelines. Use important details from your analysis to support your recommendations.

Data Description

The data for the Horton MBA admissions case is contained in the file HORTON.XLS on Blackboard. The file contains data for the 202 students who completed their first year in the MBA program over the past two years. A partial listing of the data is shown below.