Will trend be a boon or a threat to business schools?
- May 30, 2014
For a growing number of executive education programs at Virginia’s colleges and universities, the heat is on.
The temperature is being turned up because of greater competition in the marketplace from other institutions and, to a degree, from online programs.
Public schools are hustling for every dollar they can get in the face of resistance over rising undergraduate tuition.
“Institutions are scrambling to raise revenue, and the only place they can do that is executive education” fees, says Jean Gasen, executive director of corporate education at the Virginia Commonwealth University School of Business.
Executive education generally involves noncredit programs designed to sharpen the skills of managers and executives.
“All the state funded universities … are trying to reduce costs and increase revenue,” Gasen says. “The competition has become intense for more revenue.”
Roy Hinton, associate dean of executive programs at George Mason University School of Management, agrees.
“Executive education is a good financial stream. We can’t continue to make tuition hikes,” Hinton says.
To keep executive education programs prosperous and better serve their students, business schools are evaluating all the possibilities, including online offerings.
From 2002 to 2012, online education in the U.S. rose from 1.6 million students to 7.1 million, according to a recent report by the Babson College in collaboration with the College Board.
The survey also found that the percentage of academic leaders rating the learning outcomes in online education as the same or superior to face-to-face instruction grew from 57.2 percent in 2003 to 74 percent in 2013.
What the findings mean for executive education is still unclear, but what is clear is that online classes of all types are proliferating.
Gasen believes that executive education — particularly for senior management — is best delivered face to face.
“I am not convinced that the online programs for leadership and management are really making significant inroads. I don’t see a huge threat,” Gasen says.
The strength of personal relationships in executive education also can be seen in the increasing popularity of executive coaching, Gasen says.
“Years ago, executive coaching was something you did when you were in trouble. Now, it’s seen as a special opportunity for high performers to do better,” she adds.
The value of interaction
Lou Centini, senior director of executive education at the University of Virginia’s Darden School of Business, says online learning is at an inflection point where it’s being more widely adopted by individuals and organizations.
But he does not believe it will encroach on the high-level executive education that an institution with Darden’s reputation can offer.
“The way I look at it, the real threat … is not to the top 20 or 30 schools, but to the next several hundred,” Centini says.
He says that mid- and senior-level executives thrive in programs where they can talk to each other, interact with instructors and use their experience to bring ideas to the table.
None of that, he says, can be adequately duplicated online.
Centini points out that a recent survey of the 100 top executive education programs in the world found that 90 percent used face-to-face learning as their primary teaching method.
Hinton says executive education programs at George Mason University increasingly have become hybrid, a mixture of online and classroom instruction.
He also says programs are becoming more multidisciplinary, borrowing content from engineering and the sciences.
Hinton points out that Angel Cabrera, who became George Mason’s president in 2012, built a noted executive education program at his previous post, The Thunderbird School of Global Management in Arizona, and he brings new energy and insights to Mason’s programs.
Richard Coughlan, senior associate dean at the Robins School of Business at the University of Richmond, says programs customized to clients’ needs are very much in demand in executive education.
“They’re company-specific and industry-specific,” Coughlan says of the customized programs, which are increasingly part of the university’s portfolio. “We’ve got faculty who are willing to get inside a firm and truly understand them.”
Coughlan says companies see great returns when they invest in these tailored programs. Online education can’t offer that brand of personal attention and detailed instruction, he says.
Still, Coughlan notes that online education is knocking at the door of business schools throughout the country.
“UNC [University of North Carolina] at Chapel Hill has launched an online MBA,” Coughlan notes.
In fact, Bloomberg BusinessWeek recently reported a dire prediction by Richard Lyons, dean of the University of California, Berkeley’s Haas School of Business. He believes half the country’s business schools might disappear by 2020 as more top MBA programs offer degrees online and the acceptance of online education increases.
In Virginia, some business schools have embraced the online culture while others have not.
In Lynchburg, two deans have very different views about the benefits of the online experience.
“What we’ve found is that most of us in business are very driven people … especially, when coming back for an MBA or [executive education],” says Scott Hicks, dean of the business school at Liberty University.
“They want the most education at the lowest possible cost. Education will be forced to deliver: bigger, better, faster. And, the best way to do that is through this medium of online education.”
Liberty offers residential and online MBAs, as well as a dozen or so other online master’s programs in the business sector.
“We’re still in our infancy online,” Hicks says. “There’s about to be a paradigm shift, and everybody is waiting to see what’s going to happen long term.”
But Joe Turek, dean of the School of Business and Economics at Lynchburg College, is skeptical of predictions about online business education.
“I don’t buy it,” Turek says. “In my opinion, there’s no comparison between an online program and face-to-face [instruction]. I understand the convenience and flexibility of online courses. But it comes at a cost, and the cost is quality.”
Students tell him that the relationships they build in the classroom bring value to their courses.
Turek is convinced that many business schools are rushing to create online MBA programs because they see others doing it.
“I think we’re seeing a market response, not necessarily a thorough analysis,” he says.
High marks at JMU
At James Madison University, MBA director Mike Busing believes the great shakeout among business schools will be among for-profit institutions and marginal programs.
“My opinion is that if half the schools are gone, maybe they deserve to be,” Busing says.
JMU’s information security MBA program has been ranked ninth in the nation for online graduate business programs by U.S. News & World Report, and its MBA program was ranked in the top 50 for online graduate business programs.
“That ranking didn’t happen overnight,” Busing said. “We’ve been in the online business since before 2000. “There’s quite a learning curve to online education. When we started this model, it was basically teaching in a chat room.”
Longwood University’s College of Business & Economics went online with its MBA programs in 2006, in part because of its rural location. “Farmville is not a hotbed of industry. There are not a lot of people here wanting an MBA. We thought [going online] would open up our marketplace,” said Assistant Dean Abbey O’Connor, who also is director of the university’s MBA programs.
Longwood’s online MBA programs include concentrations in general business, retail management and, beginning this fall, real estate.
The programs also include summer residencies, in which online students come to campus to meet professors and hear special speakers. The focus is to help build relationships.
O’Connor believes the online presence will continue to grow and become more competitive.
She says the challenge for business schools is to differentiate their programs in an increasingly crowded field.
“Are Harvard and Longwood ever going to be competing for the same students — I don’t think so,” O’Connor says. “We’re going after a different target market.”
At Virginia State University, business Dean Mirta Martin has approached an online MBA warily.
She says many institutions VSU partners with have online MBA programs and are not selling out the seats.
“For us, it doesn’t make sense to cannibalize a market that is already at capacity,” says Martin, who will become president of Fort Hays State University in Kansas in July.
VSU is exploring the possibility of targeting a specific audience — nearby Fort Lee, an Army installation with a daily population of 34,000 — for an MBA using classroom and online instruction.
Online programs, Martin says, are one of the ways to help reduce the cost of higher education at a time when crushing student debt has become a crisis.
“Children are going out of college with debt larger than the mortgage on my first house. That’s what keeps me up at night,” says the departing business dean.
Another institution that took a long look at an online MBA was Radford University, which will launch its first program this fall.
“We will offer an accredited, quality program and in-state tuition. We think that will be attractive to our alumni and many others,” says Associate Dean George D. Santopietro of the College of Business and Economics.
One of the biggest challenges that schools like Radford face, he suggests, is not big-name schools but unaccredited institutions that offer inferior degrees for a low fee.
“Diploma mills,” he says. “They’ve been around for decades. Now, they have moved online.”