Your undergraduate GPA is important. However, adcoms view your GPA holistically. This isn’t just how they view low GPAs, but how they view all GPAs.
How your GPA fits into MBA application
First, no matter how well or how poorly your GPA represents your actual ability, the adcom will consider it and take note of it when reviewing your application. You cannot, by convincing explanations or subsequent courses, erase a low undergrad GPA from adcom consideration, but you can work to mitigate it.
Second, the adcom will examine the context of your GPA. They can see some aspects of that context automatically when they look at your transcript (like rigor of courses and school), but for other contextual hints (like pneumonia during your sophomore year), you will need to state them directly, usually in an optional essay.
They will see whether your GPA trends up or down (a problem that might need explaining), and they will see from other areas of your application whether you were working during school or participated in a lot of activities, etc.
Why context of your GPA matters
The admissions committee will draw some conclusions from this contextual review. Here are a few scenarios that could account for a low GPA and that you may want to draw attention to in an optional essay:
If you worked while you were in college, the admissions committee will probably assume you had to, and so will be less likely to blame you for time management challenges that weren’t necessarily your choice.
If you started college in the U.S. barely knowing English and struggled for a year or two until your passion and ambition propelled you to the dean’s list, then you should explain this particular challenge in an optional essay.
If the adcom sees lots of activities, they’ll note the positive aspects (sociable, contributor) and the possible negative aspects if your GPA was low (less than great time management and prioritizing).
If your GPA trends up, they may understand that you were just a kid still growing up, and will most likely view your last two years as more representative. They will also note things like change of academic focus. For example, your grades really improved once you switched your major from Physics to other subjects.
Part of your job in writing your application is to anticipate and envision the context the adcom sees for your GPA and fill in the gaps. For example, if an overabundance of activities undermined your grades, you can show in your essays how you subsequently learned to better manage your time while maintaining your vibrant community involvement.