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Risky Business
Online Programs Could Cut Number of Business Schools in Half

Here’s a prediction that should keep business school presidents up at night: half of all U.S. business schools will not see the end of this decade, thanks to increased use of online courseware.

In Bloomberg Businessweek, Patrick Clark writes that as elite schools offer more online material, they will squeeze lower-tier schools out of the market entirely:

The threat, says [Richard Lyons, the dean of University of California, Berkeley’s Haas School of Business] is that more top MBA programs will start to offer degrees online. That will imperil the industry’s business model. For most business schools, students pursuing part-time and executive MBAs generate crucial revenue. Those programs, geared toward working professionals, will soon have to compete with elite online alternatives for the same population.

Lower-ranked business schools, rather than recognized names such as Harvard Business School and Wharton, are most vulnerable to this phenomenon. When the big players start offering online degrees, they’ll draw far-flung students who might otherwise have opted for the convenience of a part-time program close to home.

To survive, less competitive schools will either have to open their doors to an even less-selective pool of students or close their doors altogether.

We’ve already noted how business schools’ hiring decisions are already hampering their attractiveness to prospective students. On top of these problems, high tuition and poor job placement numbers have many students rethinking the value of an MBA. The cachet of a business degree and opportunities for networking were once enough to keep students applying, but moving forward schools will have to offer more convenient, cost-effective options if they want to stay afloat.

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  • Boritz

    All business schools that remain standing will need to adapt to the changing realities of the profession. Instead of traditional MBA concentrations such as finance, accounting, marketing and quantitative methods, the new sub majors that will be in demand are crisis management such as running projects in an industry like insurance where the law changes frequently (very frequently) and crony capitalism/lobbying. The old training based on concepts indebted to Adam Smith is not going to cut it anymore.

  • DirtyJobsGuy

    The vast majority of MBA programs cater to the required degree market (usually government) where what you learn is absolutely unimportant. This combined with the Education Masters market will eventually disappear (as it should).

  • Jagneel

    Good riddance to business schools.
    Trivial and wishy washy bull.
    These courses are free of any serious content. They almost float in the air. Leadership, strategy, …. They produce graduates who invent nothing make nothing. They make their living skimming from the top.

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