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    The StratEDgy blog is intended to be a thoughtful hub for discussion about strategy and competition in higher education.

Coming to a Business School Near You: Disruption
January 26, 2014 - 9:14pm

Lately it seems you can’t read about higher education without thinking about disruption.  Based on some recent developments, business schools may be the first to feel the heat.

 

Clay Christensen has written and spoken quite a bit about disruption in higher education and the management education market and here are two of his best:

Disrupting College and Clay Christensen: GE And Perdue Farms Will Disrupt Harvard Business School.

 

 

In a nutshell, many – including us – believe disruption in the business school market is near because most business schools offer a largely undifferentiated curriculum and are “overshooting the market” by producing graduates that are too expensive to be hired by all but the most selective of industries and companies.  In addition, they are providing too many services at too high a cost, leaving themselves open to lower cost competitors that may have a more focused value-proposition for students.

 

 

The following items illustrate this trend from various perspectives:

 

The Economist reports that business schools are on a “building spree,” citing new buildings and new campuses. Business schools may acknowledge that disruption is on the horizon, but some are taking a multi-pronged response, including “investing now in better facilities, to keep up with rivals.”   At the same time, according to the article, “Higher education is, many think, on the brink of being disrupted by distance-learning technology. In the future, many more students are expected to study remotely. Trophy campuses could become relics.”  The article showcases many of the internationally elite business schools adding significant costs to serve their highly-selective clientele of students and recruiters.

 

 “She’s Doing an Elite MBA for Under $1,000,”  (spoiler alert: she is not earning an MBA degree) showcases a woman piecing together business school content through free, online courses from top schools instead of pursuing a traditional graduate degree.  This student’s decision will largely be validated (or not) by recruiters and hiring managers who are perusing her credentials in the future.  A recent Poets and Quants article gives a good “how to” guide for stitching together the appropriate content. The article quotes Dave Wilson, outgoing CEO of GMAC:  “The next MBA degree may not be a degree but a portfolio of certificates,” says Wilson. “The market will determine the worth of it.” With the number of schools offering MOOCs in business topics increasing from an estimate 26 in February 2013 to an estimated 51 institutions in November 2013, there certainly are many options available for online study.  In fact, the majority of the institutions offering MOOCs in business topics are accredited by the AACSB (Association to Advance Collegiate Schools of Business).

 

Ashford University recently announced that it will begin accepting Coursera and Udacity courses to fulfill general education requirements for its undergraduate degree programs.  With Wharton now offering many of their core courses through Coursera and HBS about to launch a series of online courses, perhaps the idea of an “all-star MBA,” where students build their degree portfolio by taking courses from the best faculty at a variety of institutions, isn’t so far away.

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