Real Threat to Business Schools is Technology Behind MOOCs: MBA News

The arrival of MOOCs (Massive Open Online Courses) has caused something of a stir in the world of higher and business education, with many speculating on the potential effects on delivery and access.

However, in a new report, two faculty members at The Wharton School, University of Pennsylvania argue that it is the technology behind MOOCs that poses the real threat to the way in which business schools currently operate.

Professors at The Wharton School look for true impact

In ‘Will Video Kill the Classroom Star?’ Christian Terwiesch and Karl Ulrich point out that MOOCs typically attract students looking for education to address a specific problem at work or simply for enjoyment’s sake –far removed from the MBA student looking to change or accelerate their career with a prestigious degree.

The difference is all the more pronounced given that the academic learning element of an MBA is only one part of the experience – with career management and co-curricular activities, such as event, conferences and expeditions, cited as other crucial aspects in reputable programs.

However, this doesn’t mean that the technology behind MOOCs isn’t a danger in itself. The Wharton authors posit that, just as much live performance gave way to motion pictures with the advent of 20th century technology, the technology embedded within MOOCs could have a comparable impact on business schools, faculty and students.

This technology, short video segments created by an expert instructor, termed SuperText, “has the potential to destroy full-time MBA programs as we know them today. However, if used differently, the same technology can be used to strengthen today’s business schools,” The Wharton School authors write.

Threat within MOOCs lies in business education's true costs

SuperText’s destructive potential emanates from its cost-efficiency, something that has fostered the growth of MOOCs.

In evaluating the true costs at 28 of the world’s largest business schools offering full-time MBA programs, Wharton professors Terwiesch and Ulrich conclude that current expenditure levels may come under scrutiny as a consequence of the availability of more cost-effective alternatives.

Right now, they estimate that each student is paying US$3,000 for every MBA course unit and that this comes at a cost of roughly US$1,500 to business schools per student, in terms of faculty salaries.

However, at The Wharton School, which now runs 14 MOOCs, it costs just pennies to register a new student and a few dollars for every student that actually completes the course (because the nature of MOOCs’ accessibility brings with it low completion rates, at roughly 5%).

The discrepancy in costs is exacerbated by the need to fund faculty research to keep schools in touch with the business world’s breaking trends and developments – something that the authors believe takes up half a typical faculty member’s time.

It costs business schools as much as US$400,000 for every article published in a top academic journal, according to the results of the Wharton professors’ informal survey into the number of articles faculty produce each year.

What to expect from business schools and SuperText

The SuperText technology behind MOOCs, therefore, is likely to influence business schools’ approach whether they want it to or not. However, the Wharton authors highlight the potential it can have in strengthening rather than weakening business schools.

By incorporating SuperText technology, they say we can expect three main outcomes from business schools:

1. Faculty sizes may shrink by as much as a third as professors are displaced – as the authors state: “Why go and see a local clown in the town square if you can watch one of the best in the world on the big screen?”

2. Schools may try to grow their audience with the same faculty resources. For example, harnessing the technology’s potential has brought over a million registrants to Wharton’s four foundation MOOCs in marketing, operations, accounting and finance. In addition, in the year since the MOOCs’ launch, applications to The Wharton School have risen by 15%. Business schools could also turn to SuperText to generate additional revenues through its use in executive education, where a faculty member is involved in the production of the course but not necessarily in its delivery.

3. Reassessing the structure of an MBA education – rather than compressing your business education into a two-year period and then waiting for its practical usage to reveal itself in your subsequent professional life, we could instead see business schools offering more mini-courses that are available on demand in a scenario that the Wharton authors compare to the ability to download individual songs from an album via iTunes to be accessed whenever and wherever desired.