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MOOCs May Create a Global Trail of Failed Business Schools

 

MOOCs are a futurist’s delight. Today, “disruption” is the word du jour for every guru, and each one claims education is ripe for it. And why not? Higher education is basically a cartel, propped up by government funding and loans. Students have a bevy of choices, but are they really all that different?

Probably not… and that’s why Duke’s Bertrand Guillotin and Vincent Mangematin of Grenoble Ecole de Management argue that lower-tier schools could be wiped off the map, courtesy of MOOCs:

“MOOCs raise more questions than they answer. They may well leave behind a global trail of failed business schools and along with them, legions of unemployed part-time and full-time teaching faculty and administrators. A 15 percent consolidation rate among non-elite business schools would lead to 1,800 school closures.”

“Legions” of unemployed faculty and administrators? Welcome to the private sector, where “tenure” is replaced by “tenuous.” Yes, the authors of this Financial Times column have it right: “Customers’ expectations and bargaining power are increasing, while that of business schools is decreasing.” While for-profits may have grabbed the attention of academics initially, MOOCs could be the impetus behind reform.

And why not? The speed and scope of change has been breathtaking, according to the authors:

“In less than two years, close to 100 leading universities and business schools have launched 450 costly MOOCs and enrolled almost 5 (million) students. Involving Wall Street and Silicon Valley as partners in these ventures, these business schools are changing the rules of competition. But they are doing so at the cost of eliminating their peers.”

What’s more, many of these courses are free. As a result, MOOCs threatens the very revenue model driving business schools:

“Most business schools are typically standalone teaching institutions that depend on public funding and tuition revenues to survive. Since MOOCs result in the mass-standardization of course content and commoditization of knowledge, they reduce most schools’ ability to generate revenues from teaching and charging a premium since their course content has been standardized.”

In other words, MOOCs can deliver the same quality education as most schools at little to no cost. While elite schools are shielded from such threats by their expansive capabilities (and brand reputations), lower-tiered programs often lack this market positioning:

“MOOCs appear to be highly disruptive to lower-ranked business schools. Of the approximately 13,000 business schools worldwide, the elite number is less than 1,000. The risk is high that the remaining 12,000 business schools will to a certain extent become commoditized.”

The authors offer a solution to the perceived threat represented by MOOCs: adapt.

“Non-elite business schools may be forced to merge with other entities if they do not wish to wither on the vine… in the world of commoditized business knowledge… Alternatively, they could focus much more on differentiation and move away from standardization. Since online education will never provide the magic of class debates, an increased student and teaching faculty face-to-face interaction (small classes) and stronger connections with employers might also help the majority of business schools to survive the growing MOOC phenomenon.”

Of course, a completion certificate possesses far less value than a degree from an accredited institution. Just as lawyers and legislators can change or stretch laws, educators can always beat back MOOCs by barring them from degrees. Make no mistake, though: MOOCs have changed the equation. Schools are going to compete more directly (or partner) with each other to ensure their survival. In terms of cost and quality, students can only benefit.

To learn how you can take the core courses at Wharton through MOOCs, click here.

Source: The Financial Times

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