Business education is being digitized, at least partly: there has been massive growth in the number of online MBAs launched in recent years.
But the Financial Times’ Online MBA Ranking, out today, suggests that many new courses have not yet made their mark: the list is dominated by the same names as yesteryear.
Warwick Business School, in the UK, retained the number one spot, a pole position that it has held since the ranking was launched in 2014. Warwick has done that because of its course’s good value for money, and strong faculty and graduates’ career progress.
The top four places remain unchanged from 2018. IE Business School of Spain is in second, with the US’s Isenberg School of Management and the Kelley School of Business in third and fourth, respectively.
There was one noticeable change this year, however: the MBA@UNC entered the list at number five. This reflects growth in the online MBA market. The course was established in 2011 by the University of North Carolina’s Kenan-Flagler Business School.
The FT ranked the best 10 online MBAs in 2019, down from 20 in 2018.
The ranking places the most weight on alumni career progress, cohort diversity, and the quality of online education delivery. The key criteria for career progress are the salary achieved by students three years from graduation, and the percentage increase in salary.
The average salary for the best online MBA programs in 2019 ($148,742) is a way off that achieved by full-time, on-campus MBAs ($189,975) that are ranked by the FT this year.
Another big difference between online (distance-learning) and campus MBAs is the salary increase. The average boost for online courses is about 32%, compared with 119% for the 10 top full-time MBAs ranked by the FT. But this does not suggest online MBAs are less valued than their campus counterparts.
The salary increase gap can be explained partly by the FT’s methodology. The newspaper uses alumni salaries on graduation as the base for its online MBA ranking, rather than using the pre-MBA salary as the base, which it does for the full-time ranking.
The gap also reflects the difference in student demographics. Full-time MBA students are usually in their late 20s or early 30s, a time when they are expected to enjoy rapid promotion at work, and thus a big pay rise.
In contrast, online MBA students are more likely to be older, in their mid-30s usually, and to switch careers after graduation. This means there is less scope for their salary to grow, as they may have already achieved much of their career growth.
Take, for example, Warwick’s online MBA salary: $214,141 on average. That’s more than the $118,406 average salary achieved by its full-time MBA students. However, the percentage salary increase among Warwick’s online MBAs was 38%, compared with 83% for the full-time cohort, according to the FT. Warwick’s online students are usually older, with more career progression, and higher pre-MBA pay than their full-time peers.
The FT data also show that the top online MBA programs are almost entirely comprised of domestic students. That is at odds with a commonly held belief that online learning can improve access to education for overseas students.
The average proportion of international students at the five US schools in the FT’s 2019 online ranking is about 7%. The proportion for the seven US schools in the top-10 of the full-time ranking, is around 43%.
This suggests that campus courses have a distinct advantage over their online counterparts. Most business schools would agree that a diverse range of nationalities enriches the learning experience and enhances networking, which are key reasons why people get MBAs.
This is not the case for every distance learning MBA program though. Birmingham Business School’s Online MBA—which is delivered 100%-online and was the first of its kind to be accredited by AMBA—has attracted approximately 300 students from 60 different countries since its launch in 2015.