The Rise of the Distance Online MBA: TopMBA Mentor

The distance online MBA market is growing rapidly, but prospective students should exercise caution, warns Nunzio Quacquarelli.

Distance online MBAs have grown massively in popularity over the past decade. Ten years ago, only 2% of respondents to the QS TopMBA.com Applicant Survey expressed an interest in studying by distance. By 2012, this had increased to 10%, with 6% expressing an interest in online programs.

There are three primary variables underpinning this growth. The first is a long-term trend: the growing appetite among a broader community of people for an MBA. Lower to middle-income managers looking for the lowest cost option are the main demographic driving this growth. There is also a strong interest in emerging markets – Africa and parts of Asia in particular – in which high-quality local provision is harder to come by.

The second is simply that the number of institutions offering distance learning programs has increased exponentially since UK schools like Warwick Business School, Henley Business School, the University of Strathclyde and the Open University pioneered the format 30 years ago. The current market leader, the University of Phoenix, has an MBA class of 30,000 students.

The third is a short-term factor; a greater caution amongst professional managers in making educational choices following the economic crisis of 2008-09. This has led to an increase in the number of people who are looking to carry on working while they study. Consequently, there has been a jump in demand for executive MBAS, but also for the distance blended learning model.

The latter has certainly become a more viable option, with an increasing number of highly-ranked schools moving to offer such programs. IE Business School, for example, has its Global MBA, which is intended to offer similar content to its full-time program. The University of North Carolina Kenan-Flagler is another. Names like these certainly go a long way towards opening up distance online provision to a new candidate pool.

Employer attitudes hard to gauge

Employer attitudes to distance online MBAs are mixed. Generally, there is a low level of awareness, largely due to most students remaining in their current positions while they study (though there is evidence that many change careers at least once within five years of graduation).

Employers remain focused, therefore, on hiring graduates of full-time and executive programs, with which they are familiar, and the alumni of which already work for them. There is a perception of quality associated with these formats, while there still is a sense of caution about the type of graduates online programs produce. According to QS research, only 10% of employers hire graduates of distance online programs – in line with expectations.

The employers who have embraced distance online programs are those who are very internet orientated themselves, in the e-commerce space, or professional services firms catering for internet start-ups. These companies are looking for people who are internet savvy, and may actively seek out those who have done an online MBA. Completing such a program cultivates certain skills and habits, and demonstrates an engagement and interest in the online world.

Part of the caution exercised by employers comes down, no doubt, to the great variation in quality of distance online programs. There is a huge information gap here, so QS decided in 2012 to introduce the QS Distance Online MBA Rankings. For this, we looked at the accreditation of the business school, as well as setting thresholds for things like faculty, infrastructure and reputational indicators.

We also put an emphasis on the blended component, in the belief that schools which create opportunities to meet with faculty and other candidates face-to-face are making a commitment to quality. The 20-institution ranking, for which we evaluated 40 programs, has been very well received as a genuine and valid attempt to highlight quality in the marketplace. For the second edition of the ranking, we aim to evaluate around 80 programs and rank 30-40.

The limitations

While there certainly are quality programs out there, we have to accept that the distance online format has its limitations. One of the first things full-time students are told is that you will learn more from your fellow students than anyone else. You see them nearly every day, working together towards your common goals. As good as technology has become, working at home by yourself is still a very different experience. It’s much harder to develop softer leadership and team-playing skills, which are a hugely important outcome of the MBA experience. Studying at home also means that students are unable to acquire the international experience on which 67% of employers place a premium.

However, perhaps it will be the case that people will develop different types of soft skills, which will allow them to influence and motivate people through the non-traditional channels which increasingly define many modern workplaces.

The other major challenge is one which also applies to traditional full-time programs, but is exaggerated by the deluge of new providers and the resultant increase in access in the distance online space, and that is a shortage of high caliber faculty. The number of high-quality programs that can exist at any given time is limited by how many scholars are passing through high quality doctoral programs. At the moment, it is possible that this number is smaller than the outgoing retiring contingent. The working professionals to whom some providers are reaching aren’t quite able to offer the same deep understanding.

Many Asian schools are setting up their own doctoral programs, which may go some way to help with this, but any current initiatives will take five to seven years to have an impact. But the fact of the matter is that there is a limit. While it’s good that, financially and geographically, more people can get MBAs, when academics are being stretched, it becomes problematic.

So, in short, if you’re considering an online program, you really need to research the commitment faculty can make, how many access hours there are and how many have PhDs. You also need to try and research the caliber of other students on the course – very few operate selective entrance criteria. In this respect, the EMBA still has an advantage – but, with increasing levels of crossover between the EMBA and blended programs offered by top institutions (still relatively scarce), it may well be that this becomes a less clear-cut distinction in years to come.