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Top Schools Move Online But Traditional MBA May Be Under Threat

Harvard business school entered the online education race yesterday. The MBA community has erred on the side of caution as management education moves to a new frontier.

Sat Mar 22 2014

Early on Friday morning, Nitin Nohria released an announcement that caused the business school world to either caution or rejoice. The Dean of Harvard Business School had confirmed that online education has reached the very top of the industry.

The announcement would end speculation about the details of the school’s first online foray. It was public knowledge that the Ivy League institution was developing an online program, but little else was known.

Jana Kierstead, perhaps in slip-up, put brief details of the online effort, HBX, on her LinkedIn profile in October last year. The profile read: “a new team dedicated to delivering high quality business education through innovative online products”. For Harvard, the eventual launch was just the next milestone in its evolution.

The school wanted to infuse innovation into teaching, engage with new and wider audiences, and maintain interaction between its students.

For the business school community, however, the move has the potential to shake-up the online education market and pave the way for elite schools to gain a foothold on Moocs – massive online open courses.

At the time in October, John Fernandes, the chief executive of the business school accreditation group AACSB, issued a cautious assessment. “They’re going to get high visibility with students all over the world. I don’t want to say it’s going to displace face-to-face education, but it’s going to be a big piece of the pie,” he said.

In September, Wharton, another top U.S MBA provider, expanded the amount of courses they provide online with learning platform Coursera. Their traditional full-time MBA costs nearly $100,000 for the first year of study, but their online expansion means you can now access much of that content online for free.

The business school world is scrambling to set-up online versions of their MBA courses online. Many of them are around the same price as campus-based programs.

This change is in part down to a falling interest among prospective students for traditional full-time programs. Conversely, interest in distance and online learning has shot up, with MBA intakes buoyed by the ability to study on their own terms.

The flexibility has drawn a different type of MBA candidate; those on online-based programs are often older and have more years of industry experience.

The rise of online programs is enabled by new technology. Most Mooc platforms are run by outside companies such as Coursera and Future Learn. Harvard has created its own innovative platform to support its online-based business offerings.

The MBA community was aware of the potential damage that the online education revolution can cause.

Richard Lyons, Dean of Haas School of Business, delivered a damning assessment last Friday. “Half of the business schools in this country could be out of business in 10 years – or five,” he told BusinessWeek. 

He said there was a threat that more business schools would offer MBA degrees online – but that is already happening.

Just this week the Institute of Logistical Management launched an online-based MBA for just $3,000. And Canada's Sandermoen School of Business launched a fully-online MBA specialized in real estate leadership.

Not a month goes by without a top-ranking school rolling out a new online-based program. But it is the lower-ranking schools that stand to lose the most, it has been said.

When the industry leaders offer online programs, they may attract students in other countries who were put off by relocating because of geographical commitments, or attract people by the prospect of learning for free.

Business Schools have admitted that competition will increase. Lesser-known schools could stand to lose out on local students who opt for higher-ranking online-based programs.

Harvard is the latest big-name brand to unveil – officially – a Mooc. But the elites are slowly warming to the digital world. Commentators have suggested that top schools' Moocs are marketing initiatives, and big names already have strong brand recognition that attracts top students.

The biggest threat could be traditional executive MBA courses. Students on these programs are usually tied down to jobs and other commitments, preferring the flexibility of part-time or distance study.

David Lefevre, Acting Programme Director of the Imperial College Business School MBA, says executives could switch to new online programs.

“There may be a few students who would have chosen a part-time Executive MBA Programme but will now switch to the primarily online format,” David says. But he added that programs appeal to different types of people, and each have distinct benefits.

Graham Clark, Director of the full-time MBA at Cranfield School of Management, says that the attendance time on the school’s executive program “is increasingly an issue” for some employers. “We are actively looking to incorporate online solutions into our MBA programs and to make the most of face-to-face time, whether in the classroom or in webinars,” he says.

“There is no doubt that we can deliver some knowledge transfer virtually and we are excited at this potential for innovation.”

But he asserts that Cranfield will not deliver MBA programs fully online.

“Our emphasis on personal development and leadership cannot be delivered virtually,” Graham says, but adds: “We need to ensure that we don’t use this as an excuse to rule out using technology more effectively and, indeed, recognise the exciting opportunity for innovation.”

Harvard believes they can deliver high-quality courses virtually. “The HBX faculty team has thought carefully about how to create an online offering that mirrors the energy you find in an HBS classroom, and that allows students to benefit from the diversity and experiences of other students,” says Professor Bharat Anand, Faculty Chair of HBX.

The discussion of developing online programs, though, will be high on the list of most schools’ agendas, says David. Imperial just launched an online-based Global MBA.

He argues that the same academic rigour can be delivered virtually. “We are launching now as we believe that online technology has reached the stage at which the required interaction can be conducted through technology,” says David.

Suggestions that the industry’s business model may be in peril, however, are disputed. David disagrees that online-MBAs pose a threat. “Online programs give those who wish to study an MBA more choice and enable schools to reach out to those unable to attend campus on a regular basis,” he says.

Meanwhile, other schools are considering how to adapt to changing times. The online revolution is gathering pace and the fear is that some programs may be forced to adapt.