Supply and demand is understood by every business school dean, but how to apply the theory to MBA programmes is proving to be a thorny problem. For while many of the world’s most talented and highly paid management teachers are in the US, the growth in potential management students is not: it is in Africa, Asia and the developing world.

The Kenan-Flagler School at the University of North Carolina, one of the top 25 business schools in the US, has now bitten the bullet with plans to launch a distance-learning MBA that adheres to all the entrance and content criteria used for its other MBA programmes – including a requirement for applicants to take the GMAT test.

James Dean, the school’s dean, says that although Kenan-Flagler is the first mover, he is certain others will follow. “We’re under no illusion that we will be the only top school in this space.”

With many US online degree suppliers, including for-profit companies, coming under fire for the poor quality of their programmes, the big question for UNC will be whether it can maintain the quality it offers in its four other MBA degrees. Prof Dean has no doubts that faculty, curriculum and students on the MBA@UNC will be up to scratch. Faculty are selected from the school’s existing professors and students must meet all the entry requirements of the full-time and three part-time programmes, the evening and weekend programmes and the OneMBA.

“The students will need to demonstrate that they have mastered the same content as the full-time MBA students,” says Prof Dean. “We don’t see this as any different from our existing programmes.” The price will reflect that: at $89,000 the fees will be in line with those charged for the school’s weekend EMBA programme.

What is clear is that rapid changes in technology have given top schools the opportunity to develop such programmes. “It really brings together a lot of trends we have seen around the world,” says the dean, in particular students’ willingness to use the technology. “The population of students, people in their 20s and 30s, are so comfortable with technology and technology-mediated learning.”

Significantly, the programme employs a new business model. Kenan-Flagler is working with online learning specialists 2tor to develop the programme; 2tor has already developed programmes in other disciplines with the University of Southern California. Under the deal, 2tor and UNC will split the profits from the programme equally, says Douglas Shackelford, professor of taxation of accounting and faculty leader on the programme. The investment by 2tor on developing the product will be $15m. In addition 2tor will market both the new programme and Kenan-Flagler’s other MBA programmes.

UNC is not the first to explore the interdependence of academia and the corporate world. Thunderbird in Arizona is looking at similar options as it plans how to develop courses overseas. Angel Cabrera, Thunderbird president, says one reason is that commercial enterprises have access to capital that non-profits do not. “What we’re trying to do is have a hybrid model that takes the best of both worlds,” he says.

While curriculum design, quality control and degree awarding powers would unquestionably remain within the academic world, technology support, publishing and other peripheral services might not. “It depends what makes best business sense from the perspective of scale and student services,” says Prof Cabrera.

With private and public universities in the US strapped for cash and universities in Europe and elsewhere facing a funding crisis, Prof Cabrera says Thunderbird will not be an exception in looking for corporate investment.

It is the sort of issue that would be unthinkable to a traditional business school five years ago. But with competition from for-profit education providers, the market is rapidly changing. In the UK, Chris Brady, dean of the business school at BPP, the for-profit company bought by the Apollo Group in 2009 – Apollo’s University of Phoenix is the world’s biggest supplier of online MBAs – says all but the very top business schools must consider online learning.

“Five years down the line I think essentially everything we do will be online,” he says. He believes students will be able to choose whether to study online or in a classroom, depending on convenience and cost. “Even if you are a student studying face-to-face, you would still have access to everything online.” He believes this will be the path taken by most mid-range schools. “If they don’t, they can’t grow.”

Those that have already taken the online plunge argue that online or blended programmes (a combination of online and face-to-face learning) are no soft option.

“The amount of hand-holding needed is amazing,” says Paris de l’Etraz, vice-dean of online programmes at IE Business School in Madrid. “Blended is more work than a part-time or a full-time programme.” IE has several online MBA programmes and will launch an EMBA with Brown, the US Ivy League university, next year.

Such programmes have substantial benefits, says Peter Wilson, who runs the Fast Track MBA at Babson in the US. “What a blended programme does is allow you to provide a live laboratory for them [participants] to test the things they are doing at work.”

UNC is hoping that lessons learnt developing MBA@UNC will feed back into its other programmes. Susan Cates, associate dean, says this is proven. “Every professor I have talked to who has had an opportunity to rethink courses has said that it has made existing programmes better.”

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