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Far From a Threat, MOOCs Could Help Solve the B-School Diversity Problem

Business schools worrying that massive open online courses will cut into enrollment and revenue are missing a chance to diversify their schools, new research shows.

A study written by three University of Pennsylvania researchers and published on Tuesday in the Harvard Business Review analyzed the demographics of the more than 875,000 students enrolled in nine business courses that Penn’s Wharton School offered for free online.

International students and underrepresented minorities account for a disproportionate number of those enrolled in Wharton’s MOOCs, unlike traditional MBA programs, the researchers found. This suggests that those populations have an interest in business education that traditional programs are not tapping.

Seventy-eight percent of students in business-oriented MOOCs came from outside the U.S., while 45 percent of students in full-time MBA programs and 13 percent of executive MBA programs came from abroad. Among students in the Wharton online courses, 19 percent were underrepresented minorities, compared to 11 percent of students at the top nine business schools in the country. Business schools make special efforts to recruit those students, the report says.

“MOOCs are a tremendous opportunity [for business schools] to expand into underserved markets. Nearly half of the international students enrolled in Wharton’s MOOCs hail from developing countries,” wrote Gayle Christensen, Brandon Alcorn, and Ezekiel Emanuel, the Wharton researchers.

Most business schools haven’t gotten into the MOOC game, although schools such as Wharton and Stanford’s Graduate School of Management have experimented with offering them. Harvard Business School shunned MOOCs in favor of a tuition-based online program aimed at undergraduates studying liberal arts.

MOOCs aren’t the only type of online education offering, however, and the researchers didn’t investigate the full threat posed by distance learning. MBA programs that charge tuition and issue degrees at top business schools—not ones that are free and open to anyone—could erase lower-tier schools, some deans predict.

Students taking MOOCs aren’t necessarily the same ones who might seek a full-time MBA. For one thing, they don’t care as much about completing the courses. Only one in 12 students in the study still watched course videos after eight weeks. That may make sense, considering that only 43 percent of students said earning a credential would be “extremely important or very important” before they started the courses.

The Wharton researchers also didn’t offer evidence that underrepresented and international students will start flocking to graduate business programs—or that schools are plucking applicants from the MOOC pool—but they are at least hopeful.

“Open, online business courses are reaching [underrepresented minorities and people in developing countries] in droves. These MOOC courses might then provide a highly enriched recruiting pool for full-time and executive MBA courses,” they wrote.

MOOCs could be tapping a population that’s hungry for more business education. But the high MOOC dropout rate and the gulf between steep B-school tuition and “completely free” means, at least for now, that MOOC students and full-time MBAs look like two utterly distinct groups.

Weinberg is a reporter for Bloomberg Businessweek covering business schools.

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