Nearly half of business school deans responding to a survey believe the health crisis caused by the coronavirus COVID-19 will accelerate the closure of business schools. The survey, conducted by higher-education consulting and digital marketing firm Eduvantis, surveyed deans about the spread of the coronavirus’s impact on business education.
On March 24, Eduvantis sent the survey to B-school deans at 453 universities in the U.S. Forty-six deans responded and the survey results were made public yesterday (March 30). Among other questions, the survey asked: “What effect do you believe COVID-19 will have on the rate of business school closures across the country?” All but 7% of respondents believed the pandemic would accelerate the closure by at least 1% to 2% of B-schools. Some 28% of respondents said they think the spread of the virus will accelerate B-school closures by 3% to 5%, while another 21% of respondents said an acceleration of 5% to 10%, another 21% said 10% to 20% — and 7% responded that the coronavirus would accelerate the closure of B-schools by a rate of 20% or more.
“I think we might have all already forgotten that even before coronavirus came along, being in the business of business schools is pretty tough — and getting tougher,” Tim Westerbeck, president of Eduvantis, tells Poets&Quants. “It’s a mature market. We don’t see growth. It’s a market-share play. There’s a bit of an over-supply of management education relative to the market. Those are the conditions that a lot of schools have been dealing with for a long time.
“Their margins have shrunk. Their costs have gone up.”
B-SCHOOLS IN AN ‘OVER-SUPPLY’ MARKET WILL BE HIT HARD
MBA programs, in particular — where much of the value is the face-to-face meetings and relationship and network building — are seen to be particularly vulnerable. In a Poets&Quants survey published earlier this week, 43% of respondents who are planning to begin an MBA program this fall said if the classes are online, their tuition should be decreased by an average of 37.5%. Just 17% of prospective MBA students in the P&Q survey said they’d be unbothered by attending online classes, while 96% said missing out on the full on-campus experience is a major concern.
What’s more, Westerbeck points out, current B-school students — particularly at the undergraduate level — are already asking for refunds for room and board — and in some cases, tuition. “That’s going to hit so many institutions so hard,” he says. “These are big hits to the bottom line.”
Besides current students asking for refunds, Westerbeck says the costs incurred by moving online in a scramble has also been a big hit for many institutions that didn’t already have significant online infrastructure. From implementing online technologies and systems to training faculty and staff on its use, the cost of going online — particularly in a desperate and rapid way — can be substantial.
“They’ve been forced to behave very differently than their business models suggest,” Westerbeck says of B-schools. “Everyone has been trying to move more into online delivery, but not this way.”
SCHOOLS WITH ONLINE FOUNDATION ALREADY IN PLACE WILL BE BETTER OFF
In the Eduvantis survey, B-school deans were asked to rate how prepared they thought their schools were on a 1-to-5 scale in the categories of financially, making decisions quickly, managing communications, moving faculty and staff to remote work, and transitioning fully to online learning. The financial category had the lowest average at 3.30. Earning the highest mark was the ability to “make decisions quickly,” which earned a score of 4.15. Managing communications earned an average score of 3.85, while the transition to fully online earned a 3.62 and moving faculty and staff online received a score of 3.61.
Of course, schools with online delivery systems already in place have been able to make the transition easier than others.
“Those schools are just ahead,” Westerbeck says. “They had the systems and capacity in place and the mindsets and training to move that direction much more easily. I think for schools lagging behind in their intent to move to the online space at a sophisticated level, many of them were caught really, really off-guard and are now trying to make good with Zoom or some other technology that’s really not an educational technology, it just allows communications.”
DAY-TO-DAY OPERATIONS UNLIKELY TO RETURN TO NORMAL BEFORE FALL, POTENTIALLY LONGER
Another question on nearly everyone’s mind across the country and other parts of the world: When can life begin to return to normal? Some 87% of B-school deans responding to the survey don’t see that happening in higher education before July 1.
When asked their “current best guess” as to when day-to-day operations might return to normal at their schools, 28% of deans said by July 1, while only 11% said by May 1. But the majority believe autumn or even later is more likely. By September 1 was the projection for most (31%) responding deans. More than a quarter believe day-to-day operations at their schools won’t return to normal at all in 2020.
Westerbeck believes a timeline of returning to normalcy by this summer or even early fall might be a bit optimistic.
“I think we’re all trying to be hopeful and optimistic that this is just going to pass,” he says. “But when you look at all the things that are happening that are disrupting the way things have always been — you know, for students, for faculty, for administrators, for marketers — I can’t imagine it’s going to just go back to normal the moment the infection curve starts to flatten.”
3/4 OF DEANS BELIEVE THEIR SCHOOLS WILL NOW TILT MORE TOWARD DISTANCE LEARNING
Either way, when campuses do open back up and students, faculty, and staff begin to return, the vast majority of deans believe it will be in a different paradigm, according to the survey data. When asked how much they thought if courses at their schools would “tilt” more towards online learning once they do open back up normal operations, 74% of respondents said their courses would be offered at least slightly more towards distance learning. The majority (31%) said they thought their schools and courses would be “tilted a slight amount more towards distance learning.” However, more than a quarter (26%) said it would be “tilted somewhat more towards distance learning,” and 17% said courses at their schools would be “tilted substantially more” towards distance learning.
The structure of business education might not ever return to exactly how it was.
“People think this is going to change the model,” Westerbeck says. “But part two of that is there is a bunch of anxiety that comes with that because that means many more schools are going to be competing primarily or at least predominantly in the online space. That changes the whole competitive environment significantly for schools that don’t have a big brand or are competing with a lot of other institutions at the product level.”