The professors also envisaged a scenario in which the “fundamental architecture of the business school could crumble” in the face of wide-scale adoption of distance learning technology.
In comments that echo their research earlier this year which forecast that two-thirds of MBA professors could be sacked due to the emergence of Mooc tech, Wharton School professors Christian Terwiesch and Karl Ulrich say business schools and faculty are “clearly vulnerable”.
Writing in Monday’s Financial Times the professors argue that despite the digital revolution, business education has barely changed and that costs have gone up rather than down.
They say that Moocs, the free online courses offered by technology companies such as FutureLearn and Coursera, offer the prospect of “dramatically lower instructional costs” and a shorter time out of work for students.
They say schools are vulnerable because most top-flight institutions focus on both teaching and research – but only teaching generates revenue directly.
“Research in contrast promises only intangible and indirect benefits… Yet, research is extremely expensive,” the professors say.
They added: “Leading Mooc providers do not pay for research and as a result Moocs also threaten to ‘unbundle’ teaching and research.”
The professors outlined three potential scenarios built around the assumption that Mooc technology will substantially increase the productivity of instruction.
The first scenario envisages increased output, such as additional executive education programs, if business school faculty sizes remain constant.
But the second scenario suggests that if there is a limited job market for MBA students and schools do not increase output, an increase in teaching productivity will “reduce the need for faculty”.
“In this scenario, a lot of local performers are replaced by dramatically fewer stars on the screen,” the professors said, in a reference to distance learning.
The third scenario challenges the assumption that learning, and becoming part of an MBA network and having access to employers, have to be bundled together in a two-year degree program, as is common in the US.
With the adoption of Mooc technology, the “fundamental architecture of the business school could crumble”, because the tech “eliminates the need for students to be in the same location at the same time”, enabling students to learn on demand.
The professors said: “Rather than spending two years in business school on the assumption that some of that knowledge will pay back in a distant future, why not learn what you need when you need it?
“And since newly-acquired knowledge can be demonstrated on the job the next day, the need for certification by a third party wanes.”
But they added that, if used differently, the same technology could strengthen business schools by boosting student learning and leveraging faculty and other expensive assets.
While impossible to forecast, these scenarios compound the potential threat that learning technology groups pose to traditional business school programs.
These groups have amassed significant users and financial resources: Alison, has about 3 million online users, edX has 2.7 million, and Udacity has 1.6 million digital learners.
Critics say learning technology companies rival universities’ business models and that Moocs pose a threat in particular to executive education programs, business schools’ main source of revenue.
Learning technology companies, on the other hand, say they are not rivals to business schools but instead insist that they are keen to work with them to improve students’ access to education.
Christian, a professor of operations and information management at Wharton, and Karl, vice-dean of innovation, added that educators must decide how to use Mooc technology to better serve the needs of aspiring business leaders.