Online MBAs move beyond isolated, independent study

If leading business schools once spurned the idea of online degrees, they are now increasingly adopting them — and experimenting with different formats, content and pricing.

The Covid-19 pandemic was a turning point for many, as it demonstrated the value of remote learning in allowing students and teachers, alike, to attend wherever they were located, and whatever their work and personal commitments.

Isabelle Bajeux-Besnainou, dean of the Tepper School of Business at Carnegie Mellon University in Pittsburgh, Pennsylvania — which came fifth in the FT’s Online MBA ranking this year — says: “The need for flexibility is more and more present in the market. It’s incredibly important for working professionals.”

Tepper offers options to study for an MBA online, as well as in person. Students who take the online course also sometimes visit campus for short periods, in order to benefit from networking with each other and the chance to meet their professors.

Participants can opt for an accelerated version, as well, which grants credits to those who have already studied relevant business courses at undergraduate level — allowing for “stackable” degrees that are quicker and cheaper to complete.

Other traditional providers are breaking the taboo, too: the Wharton School of the University of Pennsylvania offers an online option for its executive MBAs, and Berkeley’s Haas School of Business launched a Flex MBA in 2021, which provides core courses online and the possibility to take electives in either format. Given the Californian city’s heavy traffic, it even promotes the qualification as “an MBA without the commute”.

Similar congestion problems in Miami have helped support what William Hardin, dean at Florida International University’s College of Business, says is a rich range of MBA options: not just in-person, online and hybrid but also “blended”. Participants are able to switch “à la carte”, as he describes it, between different formats to suit their schedules.

There has been a shift in the perceptions of online education. The pandemic was a driver. It moved mindsets

Some schools have sought to avoid fears of cannibalisation by maintaining similar prices for their different formats. Bajeux-Besnainou stresses that online and full-time on-campus courses, alike, draw on the same breadth of faculty expertise. “We have one principle at Tepper: we use the same curriculum,” she says.

However, Boston University’s Questrom School of Business has chosen to compete on price, offering an online MBA at a substantial discount to its in-person version: for just $24,000, starting in Spring 2024, compared with $63,798 full-time, on campus. It keeps the online costs low partly by stripping down the elective elements to focus on a core series of courses.

A few schools have moved away from in-person tuition entirely. Purdue University closed its two-year residential MBA to new entrants in 2020 due to falling demand, but has seen steady growth in its online version. Jeffrey Buck, dean of the School of Business and Information Technology at its sister institution, Purdue Global, says: “There has been a shift in the perceptions of online education. The pandemic was a driver. It moved mindsets.”

That reflects changes in how online courses are taught. He points to a move away from isolated, independent study pre-pandemic, to far more interactive approaches with seminars and interactions in synchronous sessions.

Similar trends are affecting non-traditional education providers. Robyn Scott, founder of Apolitical, a learning platform for governments, believes that tailored high-quality content is driving the increased demand for her organisation’s offerings.

While there is a shared appetite with the private sector for topics such as sustainability and artificial intelligence, she says that courses for the public sector need to be differentiated to meet its specific needs — such as linkage to relevant policies, or legislation.

She also points to the importance of communities being able to study together — whether engaging with many officials across an entire government department, or connecting them with their counterparts in other countries. “There is a huge interest in cohort-based learning which brings the benefits of culture-building and knowledge exchange,” Scott says.

Commercial providers, such as Coursera, have partnered with universities to generate content. But Jeff Maggioncalda, the company’s chief executive, recently launched his own course on artificial intelligence. “Being a leader during this period of GenAI means learning is going to be more important than ever,” he explains.

FT Online MBA ranking 2024 — 10 of the best

Find out which schools are in our top-ten ranking of Online MBA degrees and read the rest of our coverage at ft.com/reports/online-mba.

AI is one of the most requested topics among users of his platform, and he is integrating the technology directly into its offering. This includes the use of AI chatbots to coach students and to answer questions, to set quizzes to test their understanding, make translations to offer courses in multiple languages, and to set up online “playground labs”, where users can experiment directly with large language models.

But online learning is not a panacea and the recent changes in formats, content and pricing are driving consolidation among commercial providers, as well as disruption within universities.

US edtech 2U, which acquired its rival EDX in 2021, has since suffered a sharp decline in its share price. In its latest guidance for investors, it forecast a net loss of $85mn-$90mn for 2024.

Anant Agarwal, 2U chief platform officer, says: “The whole market, post-Covid, shifted from growth at any cost to ‘show me the profits’. We sunset a couple of programmes, which had the effect of reducing the topline but has made our business much healthier.”

Last week, Accenture acquired Udacity — a commercial provider of massive open online courses — and said it would invest $1bn over the coming three years in the business, now renamed Accenture LearnVantage. It will provide tailored learning with certificates and “Nanodegree” programmes, which combine learning with experience around digital, data, analytics and AI. Analysts expect further acquisitions in the sector in the months ahead.