Bringing Prestige & Status to the Online MBA

When the dean of the University of North Carolina’s Kenan-Flagler Business School first broached the idea of launching an online MBA program, his faculty and students were highly skeptical. “Many of our full-time MBA students are not convinced this is a good idea,” says Dean James W. Dean. “They underestimate the challenge of what it is for people to remain in their jobs and work and study for the degree.”

Even Dean concedes that he had doubts. “To be honest, I was initially skeptical,” he says. “I wondered: Can you really do an MBA online that you could be proud of? I came around to the idea that this was a great opportunity for us and could change the nature of business education at the top schools.”

The upshot: This July, Kenan-Flagler will be the highest ranked business school in the U.S. to offer an online MBA program. In the initial class, the school expects to enroll 50 students at a cost of $89,000 each, a price tag that includes up to four weekend residencies at different locations around the world. UNC is partnering with 2tor Inc., a company that provides the technology platform and instructional design to deliver courses online.

The two-year program, dubbed MBA@UNC, will feature pre-arranged live sessions that employ live streaming video as well as archived lectures and interactive simulations that can be accessed 24/7. Case study and lecture discussions also will be in both real time and via forum boards. “The level of intimacy will be at least as high or higher than in the classroom because there are fewer people involved,” says Dean. “You can hide in the back row in a classroom, but if you are one of ten on a computer screen you can’t.”

THE UNIVERSITY OF PHOENIX NOW HAS MORE THAN 30,000 CURRENTLY ENROLLED MBA STUDENTS.

Online MBA degrees, of course, are nothing new. About 11,000 MBA students are currently studying for online MBAs at some 90 schools accredited by the Association to Advance Collegiate Schools, the same accrediting body that gives approval to the Harvard’s and Stanford’s of the B-school world.  Accredited institutions with online MBA programs include the University of Florida, Arizona State, and Penn State. The largest for-profit player, the University of Phoenix, has been offering an online MBA since 1989. More than half of its 66,000 graduate students are enrolled as MBA candidates, and Phoenix now buys more case studies from the Harvard Business School than any other institution.

But very few of the online players boast the prestige of the Kenan-Flagler Business School, which typically ranks among the top 20 U.S. MBA programs. “If you look at the trend, it started out that the only providers were low quality and low reputation,” Dean says. “Over the last few years, there’s been a gradual migration toward the top so you see lots of reputable schools offering these programs. It follows the pattern of disruptive innovation, which starts from the outside and then makes its way inside.”

Some believe that high quality MBA degrees are likely to follow the pattern of how socially acceptable online dating has become.“Ten or 12 years ago, online dating seemed to have some scary edge to it,” says Ian Van Tuyl, who as vice president of production at 2tor is working with UNC faculty to build the curriculum. “Today even your grandmother is urging you to go online and find someone. My sense is that online degrees will become as accepted as online dating is today.”

IE Business School in Spain arguably has the high status global online program available today. The 15-month program has four 32-student cohorts a year, three in English and one in Spanish. With the exception of two one-week residencies at its main campus in Madrid, the entire program is online (see story on IE’s Global MBA Online). The cost: about $50,000 for an MBA. Since the launch of the program in 2001, IE has turned out about 1,000 MBAs, a number that includes grads in its specialized business master’s programs in sports, digital marketing and biotech. “We’re looking at our peer competitors and we can’t believe they are not getting into this,” says David Bach, associate dean of MBA programs at IE. “There is going to be a lot more of these programs at top schools. Companies haven’t cut back on training and development as much as they have cut back on travel. So if you can provide high quality instruction anywhere in the world without people having to get on a plane, that is a competitive advantage.”

INDIANA’S KELLEY DIRECT PROGRAM NOW HAS 1,500 STUDENTS ON FIVE CONTINENTS.

In the U.S., the pioneering top-rated institution so far has been Indiana University’s Kelley School of Business. Now ten years old, Kelley Direct boasts 1,500 current students on five continents, with roughly 40% of them in graduate business programs in partnership with such firms as John Deere, United Technologies, and Cummins. Indiana’s program also requires two one-week residencies at its main campus in Bloomington. The total cost: $57,000. Most students complete the MBA in 27 months though the coursework can be spread over five years.

Duke University’s Fuqua School of Business boasts a pricey $146,600 hybrid program, with five short, in-person residency sessions at its campus in Durham, N.C. as well as London, St. Petersburg, Dubai, New Delhi, Shanghai and Singapore. In between each residency, there’s about two months of learning from home via online classroom sessions, team projects and exams. Some 116 students from 105 countries are enrolled this 15-month-long Global Executive MBA program.

Not everyone is convinced that online instruction is a quality substitute for an MBA program that brings together faculty and students on a campus for two years. Dave Wilson, CEO of the Graduate Management Admission Council, which administers the GMAT exam, says he believes online education is best suited for “rudimentary” courses in basic accounting or finance. “I’m not convinced you can use technology for deeper Socratic inquiries between a professor and the students,” says Wilson.