Real Threat to Business Schools is Technology Behind MOOCs: MBA News

SuperText’s destructive potential emanates from its cost-efficiency, something that has fostered the growth of MOOCs.

In evaluating the true costs at 28 of the world’s largest business schools offering full-time MBA programs, Wharton professors Terwiesch and Ulrich conclude that current expenditure levels may come under scrutiny as a consequence of the availability of more cost-effective alternatives.

Right now, they estimate that each student is paying US$3,000 for every MBA course unit and that this comes at a cost of roughly US$1,500 to business schools per student, in terms of faculty salaries.

However, at The Wharton School, which now runs 14 MOOCs, it costs just pennies to register a new student and a few dollars for every student that actually completes the course (because the nature of MOOCs’ accessibility brings with it low completion rates, at roughly 5%).

The discrepancy in costs is exacerbated by the need to fund faculty research to keep schools in touch with the business world’s breaking trends and developments – something that the authors believe takes up half a typical faculty member’s time.

It costs business schools as much as US$400,000 for every article published in a top academic journal, according to the results of the Wharton professors’ informal survey into the number of articles faculty produce each year.

The SuperText technology behind MOOCs, therefore, is likely to influence business schools’ approach whether they want it to or not. However, the Wharton authors highlight the potential it can have in strengthening rather than weakening business schools.

By incorporating SuperText technology, they say we can expect three main outcomes from business schools:

1. Faculty sizes may shrink by as much as a third as professors are displaced – as the authors state: “Why go and see a local clown in the town square if you can watch one of the best in the world on the big screen?”

2. Schools may try to grow their audience with the same faculty resources. For example, harnessing the technology’s potential has brought over a million registrants to Wharton’s four foundation MOOCs in marketing, operations, accounting and finance. In addition, in the year since the MOOCs’ launch, applications to The Wharton School have risen by 15%. Business schools could also turn to SuperText to generate additional revenues through its use in executive education, where a faculty member is involved in the production of the course but not necessarily in its delivery.

3. Reassessing the structure of an MBA education – rather than compressing your business education into a two-year period and then waiting for its practical usage to reveal itself in your subsequent professional life, we could instead see business schools offering more mini-courses that are available on demand in a scenario that the Wharton authors compare to the ability to download individual songs from an album via iTunes to be accessed whenever and wherever desired.