Online Education and the Future of the MBA

I came across a CNBC article on trends in business education. At first, I misread the article’s title and mistakenly thought that someone was proposing a 25-year MBA program. That seemed to me, of course, a shocking inversion of the current trends, one which would give a whole new meaning to the phrase the “career student.”

The actual title of the article is, however, “The Unbundled MBA: How You’ll Earn the Degree in 25 Years.” The author of the article, John A. Byrne makes a number of compelling observations and draws equally compelling conclusions from those observations.

He starts by asserting that in 25 years almost no MBA students will be educated on site—that almost all MBA students will be enrolled in online courses, where they will watch digital lectures and other digitized classroom presentations until they master the material. Byrne compares the process to watching Seinfeld re-runs until one knows the dialogue almost by heart.

These courses will be taught not by researchers but by master teachers. (Byrne has a very pronounced bias against most business-related research, but more on that shortly.) These master teachers will be in such demand that they will, in effect, be independent contractors, unattached to any institution. In this scenario, the university as an institution will be finally exposed as an “unnecessary middleman” no longer expensively inserted between the student and the master teacher.

These developments will cause the cost of higher education to “plummet.” Students will be able to tailor their coursework to their individual needs, and degrees will become “little more than a quaint notion for the learned.”

Byrne acknowledges that in 2010-2011, business colleges finally accounted for a larger percentage of masters degrees than colleges of education, with just over a quarter of all masters degrees being awarded to students in business-related disciplines—primarily business administration but with significant numbers in finance and accounting as well. But Byrne points to the dramatic decline in part-time enrollment in MBA programs in asserting that the bottom may be about to drop out. He accepts the “doomsday” forecast s of Richard Lyons and Clay Christensen who have predicted, respectively, that half of America’s business colleges will be defunct in the next five to ten years and that half of the universities in the United States will be bankrupt in the next 15 years—all because of the impact of online education.

Citing studies that show that it costs a business college an average of $1,500 per student to offer a graduate course in business, Byrne asserts that online education will reduce the cost to “just a few dollars per student.” Moreover, citing research that shows that each scholarly article produced by a business faculty member costs his college an average of $400,000, Byrne points to research done by Roger Martin, the former dean of a business college, that puts the cost of each scholarly article of any actual use to business persons at $1.7 million. As geographic boundaries defining the service areas of individual institutions are rendered insignificant by the development of online courses and programs, the justification for these sorts of expensive overhead costs will disappear.

Indeed, Byrne believes that the formation of MOOC consortia by elite institutions will force second- and third-tier institutions out of the business of providing graduate degrees in business.

Byrne’s article reaches a sort of crescendo in the following paragraphs:

“Sure, you wouldn’t get an orderly sequence of classes that build on each other. You wouldn’t get the benefit of forging important friendships that would last a lifetime. You would lose out on the on-campus recruiting from the world’s best organizations. And you would not have the alumni network to support and encourage you over your professional life. But you would have the basic education for free. And in 25 years, you’re likely to have all of it.

“So what does all this mean for business students? Like the influx of foreign competition in nearly every business from televisions to autos, it’s great news. It means lower prices, more choice and greater flexibility. It means that you can increasingly get an executive education program from a Harvard, Stanford or other leading educational brand with much more résumé-boosting power rather than settle for a local or regional brand. If you want an MBA, it means that you can get the degree online from a nationally ranked business school, no matter where you are. You don’t have to slog through evening classes after work for years to get the degree from the local college no one has ever heard of.

“And If you don’t want to pay the prices set by Harvard, Stanford, Wharton and others for either a program or a degree, it also means there will be plenty of other excellent business schools willing to fill the gap with lower-priced product. Auburn University, a school with an exceptional reputation in the South, has an online MBA that costs around $45,000. It won’t be long before some well-known schools begin to accept some graded

MOOC courses taken elsewhere for free so you can shorten your time to get a degree.”


By the time I finished reading this article, I felt much as I do after I read a C- essay from a freshman composition student.

Except that this piece was published by CNBC.

What happened to the master teachers unaffiliated with any institution? The self-tailored and low-cost degrees?

How is it a forecast of the future to describe what is occurring now—that elite institutions have been trying to convince everyone, and not very successfully, that the digitized lectures of their “star” professors are more effective pedagogically than the multi-faceted instruction delivered in person by professors at less prestigious universities?

Moreover, since the best teachers are, according to Byrne, those who recognize the meaninglessness of most formal scholarship, are we then to believe that the faculty at elite institutions focus on their teaching largely to the exclusion of scholarly research and publication? That the teaching done by their faculty is what makes the elite institutions elite?

That this sort of gibberish can pass for expert prognostication makes about as much sense as a twenty-five year MBA.


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