Online Courses to Turn MBA Programs Into Dinosaurs, Panel Says

Business schools may be forced to close or overhaul their offerings because of the rapid growth in cheaper online alternatives for management training, according to professors and deans.

“Half of U.S. business schools will be out of business in five to seven years because of online disruption,” Roger Martin, a professor and former dean of the Rotman School of Management at the University of Toronto, told a forum on education in London hosted by management ranking organization Thinkers 50.

Technology has widened access to business education through the creation of massive open online courses, or MOOCs, enabling students to cut costs and focus their learning by picking modules and working from home.

“The advent of online learning, and the propensity of more and more companies to bring teaching of management in-house, versus outsourcing it, makes disruption a very big deal for business schools,” said Clayton Christensen, a management professor at Harvard Business School.

An MBA at Harvard Business School, ranked first in the Financial Times MBA annual survey this year, will cost $56,175 in tuition for 2015 and an estimated $91,200 including housing, health insurance, utility bills and other fees.

The Georgia Institute of Technology will offer a master’s degree in computer science as an MOOC for less than $7,000 in tuition fees, which the school said is a “fraction” of what it charges for a master’s program on campus.

European Mergers

The “tsunami” of change has already reached Europe, said Santiago Iniguez, dean of IE Business School in Madrid. The pressure on costs and the need to compete globally has led business schools in Europe to join forces, including the merger of Reims Management School and Rouen Business School in France this year.

Business schools also face a challenge convincing employers that what they teach adds value, Martin said. The schools tend to teach commoditized skills, such as finance, when they should focus on teaching creative problem-solving, he said.

For many employers, the role of a business school is to identify talent in the admissions process, Martin said.

“Business schools have to get past that we’re a fabulous selection mechanism to actually teaching something, or we will be disrupted,” Martin said.

Business education may evolve to a system in which business people pick and choose the courses they need, instead of following a single curriculum, Christensen said. While Harvard is aware of the threat, it’s hard for established institutions to remake themselves to meet the challenge, he said.

“I hope that we’re scared stiff,” Christensen said. “What we have to do is quite clear. Whether we can do it is another question.”

To contact the reporter on this story: Oliver Staley in London at ostaley@bloomberg.net

To contact the editor responsible for this story: Lisa Wolfson at lwolfson@bloomberg.net

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