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Does the Online MBA Pose a Threat to Business Schools? : MBA News

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By QS Contributor Updated Apr 27, 2020
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Growth of fully online MBAs forces schools to develop new approaches to the way in which they offer MBA programs.

In a world where the availability of low cost online courses and MOOCs (‘Massive open online course’) is increasing rapidly, it was only a matter of time before business schools had to sit up and take note.

In theory, a fully online MBA could save students a substantial amount of money, with the high fixed costs but near zero marginal costs that this would entail. In this light it isn’t hard to see how the readiness of choice could have catastrophic effects on the premiums charged by leading schools for their traditional MBAs – were it not for their established quality and brand cachet.

However, in an article for the Financial Times, Geoffrey Garrett – dean of the Australian School of Business at the University of New South Wales – expresses his belief that many business schools are reacting positively to these challenges by changing the way they offer MBA programs, that takes embraces the advantages of the technology through which they are offered.

Schools Seizing Initiative by Running an Online MBA alongside their Traditional Format

Garrett points to UCLA Anderson School of Management by way of example. They offer an online Femba (fully employed MBA) that runs in conjunction to their traditional program. The admissions criteria, faculty content and cost are identical in both cases, thus preserving the brand cachet of the traditional program. The idea, according to Garrett, is that working professionals will so greatly appreciate the flexibility and convenience on offer that the lack of any savings in opting for the online MBA will be of no concern.

Garrett cites innovation at his own university as further evidence: the executive MBA program offered at the Australian Graduate School of Management now gives people the choice of combining a largely online MBA with a short, intensive residential experience. He says the onus is then on them to produce the goods and allow these students to make the very most of their time in the classroom.

It seems then, that business schools such as these are very much up for the challenge provided by online MBAs and MOOCs, with Garrett even envisioning a future in which busy professionals would be able to access much of the work required for their MBA program on their smart phones after their families have gone to bed.