With COVID intensifying the viability of the process of b-schools transitioning to online setup, the announcement for acceptance is starting to explode along with the rising number of intriguing difficulties and challenges.
In this episode of Business Casual, our hosts will answer some of the questions people from the MBA community are probably wondering about:
- Why are established schools in a rush to jump into the online learning mode?
- What are the downsides to joining an online MBA program?
- Would applying for an online MBA dilute things, or is it in fact going to make the network stronger?
- What would be the possible reason why US employers are actually getting a little bit colder while global recruiters seem to be more receptive to hiring online MBAs?
[00:00:07.390] – John
Welcome to Business Casual. The weekly podcast of Poets and Quants. I’m John Byrne, the editor of PNQ, and with me today, as always, are my splendid co hosts, Caroline Diarte Edwards and Maria Wich Vila. Maria of course is the founder of Applicant Lab. Caroline is co founder of Fortune Admissions, the former director of admissions at INSEAD. We want to talk today about the explosion in online learning in business education. It seems we can’t even keep these online MBA stories off our home these days. Two weeks ago, there was a really big news that Wharton was launching a new cohort of executive MBAs that would largely be online at a price tag of $215,000. The same cost as its traditional in person executive MBAs in Philadelphia and San Francisco. But that’s not all. Just the other day, Georgetown announced that it’s part time MBA program in Washington DC. Was going online. The week before that, Northeastern University in Boston announced that it was unveiling a brand new online MBA. They had been in the market since 2006. And we’re one of the early pioneers. They’re slashing the price of their online MBA by $40,000 to they’re introducing a lot of experiential learning.
[00:01:38.250] – John
In fact, one fifth of the program will be experiential. You have this fall the first part time cohorts at both Berkeley and NYU Stern that are going online. And it’s just everywhere you look there is the introduction of online learning. Even Kellogg has made announcements that in their part time program there is going to be a bunch of online components. The same is true of UVA Garden, which just enrolled its first part time MBA program in Washington DC metro area. Many of the components of that program will be via the Internet. So my question is, what’s going on here? Why are schools. So in a rush to jump in this into the online learning mode. Maria, you have thoughts?
[00:02:30.770] – Maria
Yeah, absolutely. I think that a lot of these schools have been thinking about doing online education, that we’ve seen them dipping their toe in it for many years. And I think what happened, as we’ve discussed before here on this very podcast, is that COVID just accelerated the feasibility of all of this things that may have been kind of pipe dreams or brainstorms or maybe one day we’ll do an online program. COVID forced these schools to go online and to start providing courses in a sort of virtual format. And I think once they realize that they could do it, I mean, obviously there are downsides. You’re not going to get that same interpersonal connection with the other people. But once they realize that they could give some strong semblance of the MBA experience online, I think that really helped accelerate the development of these programs. And I think it’s an interesting pros and cons list for them. Right. I think the pros are obviously that now people all over the world can access these executive programs. Before, obviously, if you were living in the Middle East or Asia or Europe, if you had to travel to Philadelphia or San Francisco once a month, once a week, whatever the cadence is, it’s really hard to do.
[00:03:47.360] – Maria
And so now this will allow people to get that education wherever they are in the world. Now, the downside, I think, is that the relationships that you forge will not be as strong. And also I wonder if at a certain point it does start to dilute the brand name, right. Because these executive programs are a little bit more pay to play. I’m not saying that they don’t have standards, but it is a lot easier for someone with they look more at your professional accomplishments. Right. And so academically, we’re not sure how those folks compare. So I would hope that they are on par as the sort of person who would have gotten into Wharton full time had they applied 15 years ago. But yeah, now there’s going to be a lot more Wharton MBAs out there. And so is that going to in some way dilute things or is it in fact going to make the network stronger? So there are a lot of things that we could talk about.
[00:04:38.230] – John
Yeah. Caroline, your take.
[00:04:40.220] – Caroline
Yes, I agree that the pandemic accelerated this and some schools had already been moving in this direction. And I think what happened when everything went online so suddenly in the spring of 2020 is that schools suddenly have to get to grips with it at a much more fundamental level, how to deliver all of their teaching online. Right. And also a lot of professors who until then had been quite resistant to embracing new ways of teaching and new technology were forced to do so. They didn’t really have a choice. And so I think that this has created the opportunity for schools to deliver more of their teaching online and engage, get more of their professors involved and therefore deliver more courses than they might otherwise have been able to do at this stage in that evolution. So I think it makes a lot of sense. And as Maria said, the difficulty if you’re delivering an EMBA program or a part time program, is that the geographical reach for that program can be quite limited. Right. And schools like to have people from a lot of different geographies because they bring diversity to the classroom and may well be from different sectors and industries and roles and so on.
[00:06:03.380] – Caroline
So it’s wonderful to have people from a broad geography in the classroom, but it’s very difficult for people to be traveling regularly right, if it’s long haul. So the online format makes it much more feasible for people to engage from across the world. And I think it’s a nice mix to have some online and then some on campus. And I’m sure when they deliver those on campus modules, they will be very well aware of the issue that Maria mentioned. They really have to work very hard during those times to build the relationships because there is a big risk that you won’t build the same quality relationship that you would if you were sitting alongside someone in the classroom and working together in a team physically 100% of the program. So I would imagine that when they are on campus or when they do bring the cohort together, they will be very focused on the relationship building elements, the networking building that cohesion between the students.
[00:07:11.810] – John
Yeah, really true. I think this explosion in online education does raise a number of interesting issues and challenges. For one thing, one online program is not equal to another. There are blended versions of these. Some offer in resident sessions, some don’t. Some have weekly live internet classes. Some are completely asynchronous, meaning that you’re only watching videos and engaging with your classmates on your own zoom sessions or on discussion boards with no real contact involving a live faculty member. So oftentimes we just talk about online MBA. But in fact, one program can differ greatly from another. Some programs, I would say most programs, offer no career support or development resources for professionals at all. The more expensive ones do. But even there’s somewhat limiting because of the nature of the virtual world. And then there’s the issue of price prices all over the place. You have the disruptively priced players like the University of Illinois, the Gee School of Business and Boston University Quest Ram School of Business. Both have online MBA programs that are very successful and are priced at under $25,000. And then you have schools that are going for the big bucks, like Wharton.
[00:08:38.090] – John
The Wharton I think move is a really interesting gamble. Obviously, Dean Erica James, who’s been in that job for two years, is anticipating that Wharton’s incredible reputation and the quality of its traditional EMBA programs. And the quality is fantastic. It’s a very rigorous program, probably one of the most rigorous EMBA programs in the world. She’s betting that she can leverage that brand and that image and get an equivalent amount of money for an online version of the program. You’ll probably find enough takers to make it viable, I would think. But in the beginning when people started thinking about online learning, they thought technology would allow higher education to become more affordable and more accessible. And in some cases it has. But in many cases, at least with elite brands that are leveraging those reputations, it has not. There are many premium priced online degrees out there, I would say even shockingly so, given the things that you sacrifice in online education that have been mentioned by both Caroline and Maria. It’s kind of astounding that to think that someone would pay, let’s face it, a quarter of a million dollars to Wharton for an online MBA.
[00:10:00.650] – John
And I’m saying it’s a quarter of a million, even though the price tag is 214 $800. Because once you borrow some money and pay the interest on it. And once you have to pay for your travel to the in residence sessions, you’re easily at 250 or above. I mean, isn’t that an exorbitant price to pay for an online degree?
[00:10:21.650] – Maria
Maria well, the way how you phrase the question, John, makes me think that you want me to say yes. No, I want torches. I mean, it’s an exorbitant amount to pay. But first of all, supply and demand, baby. Economics 101, right? Like, if people are willing to pay a quarter of a million dollars to get an online Wharton degree, then God bless them. God bless Wharton, god bless the people doing it. That’s the free market at work.
[00:10:52.070] – Caroline
[00:10:54.770] – Maria
The two greatest things, aside from the raw educational content is, for example, that these programs can provide is, for example, access to the alumni network. And I also think if I were in charge of one of these online MBA programs. I would actually invest in bolstering the career services because if you can start getting some real career wins from people. Someone who’s like. Yeah. I just did this online MBA at Wharton. And before this I was like a mid manager in my CPG company in Dubai and I just got a great job in London and I doubled my salary. Those sorts of wins will immediately I mean. That’s going to ratchet up the demand. I think. Considerably. So if they start creating it as a truly viable alternative to the full time MBA in terms of some career outcomes, yeah, it’ll be harder. Yeah, it’s going to take more work, but boy, oh, boy, I think demand would really skyrocket.
[00:11:48.230] – John
Yeah, I think you’re right. Now, Caroline, do you think generally online MBA programs are not good programs if you want to pivot in your career, that they’re better if in fact, you want to try to accelerate career where you already are employed?
[00:12:03.470] – Caroline
Well, traditionally, executive MBA programs, the ones that are more likely to be shifting online, I think have been targeted at people who are looking at career acceleration. And I would imagine that a lot of the people who are signing up for the part time programs. For the modular programs. And also for the online programs. Probably there’s less of overall. There may be less than ambition to make such a dramatic career change as some of the people who are doing the full time programs where they’re often looking to change the industry sector. Change their function. And possibly even change their geography. Right? And so if people are working at the same time as studying, then they’re more likely to be evolving in their careers rather than making a dramatic change. Having said that, all of the part time modular format programs over the past ten to 20 years has seen.
[00:13:04.370] – Maria
[00:13:04.680] – Caroline
And more of their students looking to actually make a career change. There has been a shift where there is a bigger proportion of those students who are looking to make a career change versus just evolve and accelerate their careers. And so schools have had to respond to that. I think it’s an important thing to look at if you’re signing up for an online program is what career support will get, because in the past, that’s typically been a gripe of EMBA students and part time program students, as you say, but they didn’t have the same access to the fantastic career services support that the full time flagship MBA program students have. And so that is a very important consideration. Having said that, these days, recruiters also switched online with the Pandemic, where they also learned to recruit online in a way that they didn’t before. And so it’s not as essential to be on campus now as it might have been three years ago for recruitment. Right, because a lot of the recruiters are delivering their information sessions online, they’re doing interviews online. It doesn’t all have to be face to face in the same way that it was in the past.
[00:14:24.020] – Caroline
And so that lends itself very well to the online programs. And so it may well be the fact that now online students have access to pre opportunities that they might not have been able to apply for, get such easy access to prepandemic.
[00:14:41.650] – John
True. And to the extent that more and more work is being done remotely at companies all over the world is another indication that there’s an acceptance of online learning. Now, GMAT recently did a study, and this is one of four stories that address online MBA degrees on our homepage today. Four, okay. And their study showed that global recruiters were warming to online MBA grads while US employers were getting colder. And we asked for academics why that might be so in the US. Part of it, I think, is employers want their employees to get back to work, and so they are becoming less receptive to all the remote work that’s occurring. They have all this empty real estate they don’t want to give people back. And I think to the extent that that remote work helped accelerate their acceptance of online MBAs, the fact is they’re trying to claw back their employees into offices is resulting in a different reaction when it comes to looking at the value of the degree. I think that’s part of it. Why would you think that US employers are actually getting a little bit colder while global recruiters are actually seem to be more receptive to hiring online MBAs? What do you think, Caroline?
[00:16:13.350] – Caroline
Well, I definitely agree that it’s a big challenge for employers right now. And I was talking last week with an Instagram classmate who runs the office of one of the big consulting firms in New York. And we were talking about this. That they have been struggling to convince their staff to come into the office to. You know. People have just got into the habit of working remotely and what they’ve seen is that the younger generation haven’t learned as much to the younger consultants because they’ve been working remotely. So that lack of face to face exposure to their colleagues and to their clients has really impacted their learning curve for the younger staff who joined during the pandemic. So I think it is a big concern, and so I could understand that they are concerned about their employees engaging more and more online. But I’m not sure why that would be a difference in the US versus other countries, because I’ve also talked to friends in London who are having the same issues, who are running teams, and it’s exactly the same dynamic. So I’m not sure why there would be such a different US versus internationally.
[00:17:30.820] – John
Yeah. This chemical study showed that global recruiters view graduates of online in person business degree programs equally skyrocketed from 34% in 2021% to 60% this year. But in the US. Only 29% of the surveyed employers said that they viewed graduates of online and in person MBA programs equally. That’s the lowest of any world region. It’s down from 33% a year ago, which is really interesting, I think. Now that said, this is all about who fills these surveys out, what the sample size is. But usually GMAT does pretty darn good surveys, and I think it’s probably reflective of the overall recruitment of MBAs, even though I would think there’s a lot of anchoring of traditional programs in there, and recruiters who actually hire from traditional programs. So this is still new to them and they may not be as accepting. I think that any person who wants to use an online MBA at whatever school, whether it’s an elite school offering a program like Michigan, Carnegie Mellon, Indiana, Kelly, or Wharton for that matter, or one of the lesser schools in the second tier, if you want to pivot, you need to actually ask the program, can you do it?
[00:19:03.420] – John
What kind of career support will you get? Will there be one coaching? Can you talk to recent alumni who actually were able to transition through a new discipline, a new industry, a new job as a result of getting their online MBA, and then ask them, what do they have to do to make that happen? I think that could be really valuable to you before you take a step. If in fact you want to pivot and if you just want to accelerate your career in your existing industry or even with your own employer, I think it’s an easier gamble to take with an online MBA where you don’t have to quit your job. It’s totally flexible. You can stretch it out depending on your personal and professional responsibilities and burdens, and usually it’s a lot cheaper, which is important to know. Now, in our story on Wharton’s Big Gamble, it’s a commentary. And one of the things that we point out is that you can take every single Harvard Business School online course in their catalog. That would be 19 courses on every business topic imaginable. Pretty compelling things. In fact, everything from design thinking and innovation to sustainable investing.
[00:20:24.070] – John
If you took every one of them, it would cost you $33,000 15% of the price tag on the Wharton program. Now, of course, you wouldn’t be getting a degree, you wouldn’t be getting any live Internet classes that Wharton is offering, and you wouldn’t get any in residence sessions, but you would be able to put Harvard Business School’s name on your resume. And Harvard Business School, being in the job that they’re in, actually tell you how to list these credentials on your LinkedIn profile or on your written resume because they know they are resume worthy credentials to have. If you had the choice, Maria, would you take the 19 Harvard Business School online courses, or would you enroll in the Wharton online MBA?
[00:21:17.890] – Maria
Well, I don’t think it’s an apples to apples. So the equivalent Harvard also has something called the Advanced Management Program, which I think is like an eight week program. And there are options where executives actually come and live on the campus. They live in dormitories. They’re very nice dormitories. They’re, like, way nicer than the ones for MBA’s unit. But nonetheless, they live in a dormitory. They go to classes, they have case discussions. So that program is one that really does replicate the HBS experience, albeit being much shorter. The other benefit of that program is that I believe that those graduates are able to be in the Harvard Business School alumni database versus those who simply take a class ad hoc here and there. Do not get that. At least they haven’t so far. And if they do, I’ll be kind of annoyed. But, yeah, I would rather do the Wharton thing because it’s a holistic curriculum, and hopefully there will be some sort of element of cohorts as well so that I would see some familiar faces from class to class. So, yeah, I mean, that definitely sounds like a much greater value proposition.
[00:22:28.550] – John
Yeah. And you mentioned the Harvard advanced management course. It’s $84,000, which is also a fraction of the 215 that weren’t as charging for its new online MBA. Caroline, you would prefer, I think, as you experienced yourself, just to read it a full time MBA experience. But if you had to do an online program, what would you do?
[00:22:56.210] – Caroline
Well, I think perhaps I would wait for you or Show and see how things go with this online Warden program because they’re launching it, so there could be a few teething problems. But I think the question of pricing is very interesting. And I’m sure that some other schools will be quite delighted to see that Walton is charging such a high price for the online program because they’re putting a stake in the stand. And I think other schools may therefore feel more confident to follow their leads. Right until now. As you said. Online programs have been much cheaper and so this is really quite a big change and quite a bold move. I would imagine that because we were discussing it’s quite surprising that the price is so high given that you don’t get the residency or you don’t have some of those elements included. Which you get on the other executive MBA program that they offer. And I wonder if there may be some higher costs involved in the online delivery. So in some cases we’ll find that to deliver effective online teaching, they actually have to have a smaller group, right, besides the group that you can have in a physical classroom.
[00:24:16.020] – Caroline
So in a physical classroom, it’s quite feasible to teach a group of 60, 70, 80 plus people and make it a very engaging experience that’s much more difficult to do online. And so schools have learnt that to be more effective, they have to break those groups down, right, to actually be able to enable people to speak and interact and engage. And so there may be some higher costs involved for water in the online format because they might be following that model where they’re sort of breaking people down into smaller groups and therefore it’s much more faculty time in the online program.
[00:24:54.870] – John
Yeah, well, the other interesting thing about this Wharton Cohort that will go online is that Wharton is positioning us as a global executive MBA because obviously now via the internet you could reach across borders and offer the program. And they’re expecting a good number of people in that program to be from Europe, Latin America, the Middle East and elsewhere in the world. And that’s sort of an interesting proposition because while the Wharton brand name is very valuable, let’s face it, but it doesn’t travel as well as Harvard, MIT, Stanford and many other higher education brands. So I think that’s another interesting aspect of it. It also increases the cost of the few resident sessions that will occur, the 25% of the program. Because if you are living in the country outside the United States, and now you have to travel to Philadelphia or San Francisco for some of those resident sessions and some of them will be held internationally. But international travel is a lot more expensive and a lot more burdensome than just traveling from one city to another, united States to their traditional programs. Do you think you’re going to be able to track a truly global audience for this online MBA?
[00:26:14.850] – Caroline
Caroline I think I’m sure that’s what they’re aiming for, right? And they’re also able to skin the market. As you say, though, there is this global audience that suddenly gets access to this degree that might not otherwise have had the opportunity. And so the incredible expansion of the geographical reach for this type of program means that a lot of people would be interested and therefore they can skim off the people who are willing to pay that very high price tag, but that also will help to support the prestige of the program as well. Right. People look at a price and make an association of quality, right. Whether that’s the right assumption to make or not. When people see a high price tag, they make an assumption that the quality is good. Right. And so I think that that high price tag will help to uphold the brand image of the program that I’m sure that Morton is very concerned about. Right. Because the last thing they want to do is to undermine their brand.
[00:27:25.790] – John
Yeah, that’s true. Okay, you do MBAs. I’m going to ask you an MBA question about all this. If you were someone who wanted to get an MBA, and you actually had the choice between a full time program, be it one or two years, or an online MBA program, what would be on the branches of your decision tree?
[00:27:46.870] – Maria
Maria I think it’s what I want to get out of the program. So if I, for example, am already an executive running a business or running a family business, or in a very senior position in a multinational, then I think the online format would make more sense. But all in all, I still think in person is the better way to go. Yes.
[00:28:11.310] – Caroline
Caroline yeah, I think if you have the flexibility in your lifestyle to be able to take a year or two out of your career and relocate, then I think it’s very difficult to replicate right. That intense experience and the relationships that you build and the whole transformative aspects of the full time MBA program. And so I’m very glad that I had that opportunity. But as Maria said, later in your career, for professional reasons or for family reasons, people don’t necessarily have the ability to just abandon everything and move away and be in a completely different place and not be earning an income for an extended period of time that’s much more difficult later on in life. I think it’s for a different group of people, right? Yeah. It will attract a different cohort at different stage in their career.
[00:29:10.950] – John
Very true. So there you have it. I think the good thing about this is options, right? What’s happening here is that business schools are offering people incredible options, incredible differences. It may make the choices more complicated and difficult, but at the same time, you all have to love the fact that you can pick from one of the great brands like Warden and pay the price and get a fully featured online MBA with 25% in person. Or you can go in the University of Illinois and pay $24,000 and get your online MBA and do it with a truly global audience, with weekly Internet live classes. In fact, at Wharton, they’re every other week INSEAD of weekly. So you got a lot of choices, a lot of options, a lot of differences. And I think that basically what’s happening here is we’re seeing the market segment in a way that’s very valuable to the applicant students and to business schools themselves. It’s like they’re actually listening to what the marketing professors in their schools are saying for once. Okay, this is John Byrne with Poets and Quants. Thanks for listening.