The MTP Business Learning Blog

This blog is produced by MTP for senior professionals highlighting relevant and interesting books and articles on business, finance and strategy, and the opportunity to comment on them. It also contains news of MTP and its clients and, from time to time, extracts from MTP publications.

Wednesday 16 April 2014

Half of Business Schools might be gone by 2020

‘Half of Business Schools might be gone by 2020’ by Patrick Clark, Business Week, March 14th 2014
There may be an element of overstatement in the headline but this article contains some valid reasoning and presents a powerful case.  It is meant to refer to US Business Schools but the arguments are equally relevant to the UK and the rest of Europe.  The smaller Business Schools, without the benefit of a strong brand, may fail and the reason is the growth of online learning.

Up until now, the major US schools such as Harvard, Stanford and Wharton have not offered MBAs on line but the author believes that this will change as the previous downmarket reputation of online degrees is turned around.  He also believes that the top schools will be unable to resist the pressure to go online; some are ‘slowly warming to the digital world’ and competition will cause all the top names to follow suit.

If this trend does continue, the minor league schools will suffer badly.  A bright student who lives in Milwaukee and now takes the local route will be faced with a choice; would my job prospects be best improved by a ‘face to face’ MBA course from the University of Milwaukee or an online degree from Harvard?  The answer is the latter, whatever the relative learning and social benefits of the two methods.

There will also be financial benefits for the top schools as long as the new online students are incremental to existing numbers; and, knowing the difficulty of being accepted on the best MBA courses, this will be probably be solved by more flexible admission criteria.  The author does however fail to mention the potential impact of this development on the reputation of the top schools; if Harvard go online, will it be seen as a ‘proper’ Harvard degree and will it dilute their reputation as one of the top business schools?  The answer may determine whether the author’s forecast really will materialise; I have a suspicion that the really big names may stay out of online MBAs for a long time yet, maybe for ever, and it will be the second rank schools that will take the virtual route.

It is perhaps symptomatic of the insular nature of US business education that the article does not mention the other big threat to the top US Schools – the competition from similar institutions in other countries for their overseas students, who pay higher fees and represent a large proportion of volume.  As schools like INSEAD and LBS cement their international reputations, developing countries lure faculty for their own schools and global companies design their own courses, there could be an even bigger threat to all US Business Schools, not just the minor ones.

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