Will Online Supplant Traditional MBAs? Experts Weigh In

We at Poets&Quants have been asking the question for years: Are online MBAs an existential threat to traditional two-year residential MBA programs? The answers vary depending on the answerer — and where and in what capacity they work. It is clear, though, that the coronavirus pandemic has been a boon to online MBA programs, as it has been to all virtual modes of communication and learning.

Now another batch of experts has weighed in to address the big question about online MBAs, namely whether they will, sooner or later, supplant traditional MBAs as business schools’ flagship degree programs. In its monthly survey of a panel of academics that include B-school professors from around the world, MIT Sloan Management Review found strong opposition to the notion that online MBAs will oust two-year residential programs.

Most — 52% — of the experts on MIT’s Strategy Forum panel disagreed with the proposition that “Online education and specialized degrees will supplant the traditional two-year full-time MBA,” and another 28% strongly disagreed. Only 12% agreed, and 4% strongly agreed.

Source: MIT Sloan Management Review

MOST ONLINE OFFERINGS ARE ‘LEGITIMATE SUBSTITUTES’ FOR AN MBA

“In practice, the generalist nature of the traditional MBA serves many people well — particularly those interested in being managers,” says Melissa Schilling, the Herzog Family professor of management at New York University’s Stern School of Business.

“Two-year full-time MBA degrees, for better or worse, have achieved a certain legitimacy as the service provider for future business leaders,” adds Jin Li, professor of management and strategy at Hong Kong University Business School. “In other words, this degree is ‘the signal’ to send to business communities. Changing that is challenging.”

Meanwhile, a total of 16% of panelists agreed that, yes, specialized and online programs will supplant the traditional MBA experience.

“Two-year full-time MBA degrees taken at a specific point in someone’s career are incompatible with the idea and ambition of lifelong learning and careers that do not follow an established linear trajectory,” says Tobias Kretschmer, head of the Institute for Strategy, Technology & Organization at the Munich School of Management.

In terms of career trajectory and resources, the traditional MBA might not suit many people. “Students who are more sensitive to price and opportunity costs, or who are looking to upskill without switching employers, will find these new formats and options attractive,” notes Timothy Simcoe, professor of strategy and innovation at Boston University’s Questrom School of Business. Such alternative programs do bring value, says Anita McGahan, professor of strategic management at the University of Toronto’s Rotman School of Management.

“The vast majority of online and specialized offerings are legitimate substitutes that offer some of the main benefits of the MBA, often for lower tuitions and fees. There is no question that online education and specialized degrees are tripping up many MBA programs.”

FULL-TIME MBA APPS ARE UP, NOTES ONE PROF

Even the panelists who agreed that online and specialized master’s programs have a lot to offer hastened to add that certain MBA programs will remain desirable — for some.

“The traditional two-year full-time MBA is likely to survive at elite schools as a loss leader — with generous financial aid to attract top students, burnishing those elite brands and driving scale for their online/specialized offerings,” writes Lori Rosenkopf, the Simon and Midge Palley professor of management at the Wharton School at the University of Pennsylvania. “As a result, lower-tier schools can expect increasing financial pressure, suffering in the competition for students as capacity scales.”

“The death of the MBA has been forecast for years. While it is easy to imagine the knowledge taught going online, the credentials and the cohort effects are another matter,” says Joshua Gans, chair of technical innovation and entrepreneurship at Toronto’s Rotman School.

The proof is in the data, notes Andrea Fosfuri, professor of management and technology at Italy’s Bocconi University: “After many years of decline, MBA applications worldwide have increased recently.”

DON’T MISS: IN U.S., ONLINE MBA STUDENTS NOW EXCEED FULL-TIME MBAs or THE BIG QUESTION ABOUT ONLINE MBA DEGREES: DO EMPLOYERS RESPECT THEM?