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November 24, 2013 11:38 pm

Moocs herald the disruption to come

Technological change will lead to more business schools shifting to fee-based, online models

Moocs, or massive open online courses, have a good chance of qualifying for the business school buzzword of the year. The intensity of the debate surrounding this topic is nothing short of amazing, with many pundits seeing the business school market about to be turned upside down while others sense irrational exuberance sprinkled into the debate.

One thing is certain, however: Moocs have caught the attention of business school deans and are playing a prominent role in networking events.

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Despite their anchoring role in the discussion, Moocs represent only one variant of online provision. And it seems that universities are mainly using them as a technological playground for developing and refining online delivery capabilities.

The disruptive influence of technological change will ultimately come from more and more business schools shifting to fee-based, online delivery models. Drivers of change are the rising number of students interested in more flexible educational offerings as well as the lure of reaping the financial rewards of expanding market boundaries.

Mass provision of highly standardised content will definitely become a fixture in the higher education landscape, but it is unlikely to represent a competitive threat to mainstream management education.

Premium providers especially will be able to sustain their traditional offerings based on face-to-face interaction in a physical classroom. They will surely add blended learning elements to make in-class contact hours more rewarding, but this will not necessarily represent a significant shift in their overall development trajectory.

We are still in a pre-competitive phase with business schools collectively trying to understand the challenges ahead. Becoming an early mover in the shift to online learning may not be a smart strategy since it is difficult to predict where technological progress will eventually take us. It is certainly not a given that online learning will always be a second-best to face-to-face instruction in terms of quality and customer experience.

It remains unclear what the future role of Moocs will be, with the possibilities ranging from serving as a platform for recruiting student talent globally to offering low-frills education to students with limited financial means. We may also see the emergence of a product life cycle for online offerings with the margins of maturing ones being eroded eventually because of technological progress. Moocs-like structures may serve as the last stop before final elimination.

The spread of online delivery is likely to happen much more quickly than expected by most market observers. The strategic alliance of Thunderbird School of Global Management and Laureate Education, with the objective of rolling out globally the online version of the Thunderbird MBA, indicates that for-profit providers are ready to attack the economic space of traditional business schools. And publishing houses, seeing the margins of their core business being increasingly eroded, are also looking for alternative channels through which they can market their content.

Can the spread of technology-enhanced learning even lead to an unravelling of the traditional business school? Possibly! Learning platforms may be provided by specialist companies and teaching offerings can be stacked on to them in the form of degree portfolios by institutional suppliers or individually by freelance faculty. Government-approved agencies can take over quality assurance and certification responsibilities.

The possible unbundling of business school activities represents the ultimate threat of disruption ahead.

The author is the director of research & surveys at EFMD and a professor of finance at EBS Business School, Germa ny.

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