Do MOOCs Upend Traditional Business Education?

The question keeps educators up at night: Do free, massive open online courses cannibalize enrollment at traditional schools? The results are finally in, part of a new study co-authored by Wharton professor Ezekiel J. Emanuel. Rather than poaching traditional students, MOOCs reach new audiences that business schools, at least, want to target.

In this Knowledge@Wharton interview, Emanuel notes that “it doesn’t seem that MOOCs are undermining traditional business schools, but may be complementing them, enriching them and providing a great opportunity to [engage] other diverse student bodies.”

An edited transcript of the conversation is below.

Knowledge@Wharton: Please summarize your research findings for the study you co-authored,  “MOOCs Won’t Replace Business Schools – They’ll Diversify Them.”

Ezekiel J. Emanuel: We were interested in how MOOCs (Massive Open Online Courses) might affect business education. Everyone is worried … that MOOCs might kill business schools — that free or cheap on-line education might take apart the bricks-and-mortar traditional high-end business schools like Wharton. We were wondering if that is likely to be the case.

The surprising finding to us is that with nearly a million people registering for the Wharton core courses — like accounting and operations as well as some added courses like gamification and the business of sports — it turns out that MOOCs seem to attract people who are not in the usual MBA or executive MBA-kind of programs. [They attract] people from developing countries – there is a high proportion of them in MOOCs. They don’t [typically] [get] MBAs or executive MBAs. {MOOCs attract] first-born Americans, who tend to be highly educated but not terribly well employed.– They are a big proportion of the MOOCs. That was surprising to us, and yet they are not a big representative group in the MBA and executive MBA program.

Again, very surprising to us, [there are] a lot of under-represented minorities, African-Americans, Hispanics and others taking these massive on-line open business courses — obviously a group that we’re trying to get, to increase their representation in the regular MBA and executive MBA programs.

“It doesn’t seem that MOOCs are undermining traditional business schools, but may be complimenting them, enriching them and providing a great opportunity to [engage] other diverse student bodies.”

Getting these people, who are otherwise not in the mainstream of MBAs, into business education through MOOCs seems to be very surprising. It suggests that MOOCs are serving a different kind of clientele than regular MBAs and executive MBAs — those people who maybe are traditionally excluded or under-represented in our regular bricks and mortar classes. That might serve as a very enriched population to target for recruitment into MBA and executive MBA programs: smart, well educated, very interested people who otherwise we might not have contacted. In that regard, it doesn’t seem that MOOCs are undermining traditional business schools, but may be complimenting them, enriching them and providing a great opportunity to [engage] other diverse student bodies.

Knowledge@Wharton: What are the key takeaways of your research?

Emanuel: I think the massive on-line education courses that reach thousands, tens of thousands, hundreds of thousands of people on various platforms like Coursera and edX have been a real worry. [People are concerned] that they’re going to upset the higher education marketplace, maybe undermine traditional education. We were very interested in that.

The three or four big takeaways from our study are first, these massive on-line open education courses or MOOCs seem to target very important groups that otherwise aren’t involved in the traditional MBA or executive MBA programs. Groups like students in developing countries, especially non-Bric countries. Students, first generation Americans, recent immigrants who are well educated from their home country but maybe under-employed in the United States, probably are using these MOOCs to gain additional skills and training, and to demonstrate that they are competitive for jobs here. And then another very surprising group – under-represented minorities were also very over represented in the MOOC program as compared to the MBA or the executive MBA program. Nearly 20% of the enrollees on the American side were under-represented minorities. And that’s a group that many business schools have been trying to target to enroll in traditional MBA and executive MBA programs.

A second surprising finding was that women did not fare that well, especially women in developing countries, in these MOOCs. [The MOOCs] tend to be still dominated by well-educated men. There may be bigger barriers for women. Maybe they don’t have the educational preparation to take advantage of the business-style MOOCs. It may also be that they don’t have access to the Internet and necessities like computers.

A third big takeaway: Many people lament the fact that there’s high enrollment numbers, but when you look at the number of people who complete the course and get certificates, it’s way down at 3% or, in the case of business schools, 5%. Even though that’s a small percentage, it’s important to remember that when you start out with very large numbers, hundreds of thousands, that small percentage is many, many thousands of people, many more people than you have in a regular MBA program.

But more importantly, many of the students say, “Look, getting a certificate is not that important for me. I got a lot of information or a lot of knowledge, or what I wanted, without getting the certificate.” So, we need to think through how MOOCs are actually satisfying the educational needs of students, rather than figuring out that the end result is to get everyone a certificate.

That may also have some important implications for the pricing model. Charging at the end for a certificate may not be the wisest move. Maybe another platform for charging — like a monthly subscription fee or some other [payment] program — would be a much wiser way of revenue generation.

Knowledge@Wharton: What are some of the practical implications of your findings for educators?

Emanuel: One of the important elements from our study of students who take the business massive on-line courses is that they are probably a very good target population for recruiting traditional MBAs.

These are groups that business schools have wanted to enroll, students from developing countries, under-represented minorities, who traditionally are under-represented in business school. And so these massive on-line courses may allow targeting for recruitment that could be greatly enhanced. I’d say that the second important conclusion certainly for business schools is that they should look at MOOCs and these on-line course opportunities as opportunities, not as competitive, and shy away from them fearing that they’re somehow going to undermine what they do in a traditional classroom or an executive MBA program. At least initially, they don’t look competitive. They look like they might be synergistic.

“I think the fear and the loathing that often accompanies MOOCs among academic administrators is probably overplayed.”

Exploring more deeply with the students who have taken the courses and what they think they’ve gotten out of them, how these courses can enhance or maybe bring them into the executive MBA, bring them into the traditional MBA programs — I think is where we should be looking.

I think the fear and the loathing that often accompanies MOOCs among academic administrators is probably overplayed and we need to think of it much more as a positive opportunity to expand all the great resources we have educating students.

Knowledge@Wharton: Do your conclusions apply to other groups besides those targeted in this research?

Emanuel: This research focused on business schools and business education because we had this unique opportunity given the fact that Wharton was running these core preparatory courses in things like accounting and marketing and operations, as well as some of the additional, more expansive courses like gamification. But the conclusions probably extend to higher education much more broadly.

Many higher education administrators have on the one hand thought they needed to experiment with massive on-line education. But on the other hand, they are kind of dreading it and fearing that it’s going to somehow undercut their finances and enrollments. What we suspect is that there’s actually an opportunity to use the on-line courses to augment what is happening in the traditional educational program. In fact, there are different audiences to use.

The big challenge, which our study doesn’t solve, is the question of how do you make a business model that makes sense for MOOCs, because it does look like completing the program, completing a set of courses and paying for that is probably not the optimal approach.

Knowledge@Wharton: Is there any story in the news that’s relevant to your research?

Emanuel: There was an article in The Wall Street Journal just the other week talking about how business schools might adapt or might fear massive on-line education, but it had no data. One of the things that we have tried to do is — instead of having a lot of speculation about massive on-line courses and what they’re going to do to higher education and who’s taking them — to actually collect data. The University of Pennsylvania has been probably the leader in offering massive on-line education courses both for business as well as in the non business areas: mythology or poetry or my own health policy course. We’ve also been pioneers in actually looking at who’s taking the courses, why they’re taking them. We’ve been among the first to document the high number of people who sign up, about a third of them actually take the course, begin the course as initiators. But only about 5%-10% of those who have started the course actually complete it.

I like to say it’s rules of thirds. About a third of the people who sign up look at the first lecture. About a third of those who actually look at the first lecture complete the course. It’s a little bit of an exaggeration, but that’s a pretty good rule of thumb. We need to study each one of those.

It’s easy to sign up when it’s free. Once you’ve started the course, we need to understand what you’re expecting from the course and why many of those people get what they seem to want out of the course without completing it. What is it that people are looking for in courses that doesn’t require completing every lecture or completing every assignment? Is it brushing up in their knowledge? Is it prepping them for their next program or their next job?

“Once you’ve started the course, we need to understand what you’re expecting from the course and why many of those people get what they seem to want out of the course without completing it.”

I think a lot of additional research is going to be needed. At the University of Pennsylvania, rather than speculate, we have been delving into the data and trying to publish as much as we can to educate the conversation about massive on-line education programs.

Knowledge@Wharton: What sets your research apart from other analyses of this topic?

Emanuel: I think the University of Pennsylvania has been a leader in looking at people who take massive on-line courses and trying to understand who they are, why they’re taking the courses, which ones they complete, which ones they don’t complete, what socio-demographic groups they come from, what countries they come from.

Getting hard data and looking at the hundreds of thousands and now millions of people who’ve taken these massive on-line courses is one of the things the University of Pennsylvania is leading in. Another thing we’re trying to evaluate is what exactly people get out of the courses and how they use that information. A third thing we’re looking at is, in what ways do these massive on-line courses actually enhance education or maybe undermine education. [We are] trying to empirically evaluate their benefits in terms of actual education, knowledge retained, knowledge utilized…. That obviously takes more time, but we are committed … our group and many others here, to good quantitative research that will inform the discussion going forward about massive on-line courses.

Knowledge@Wharton:  What will you look at next?

Emanuel: We’re trying to understand more concretely what people are getting out of the course, what expectations they come into a course with, and when they stop, what have they gotten that allows them to stop. Or, are they stopping because it’s too much time or they don’t have the resources or there’s some other barrier that [stops them] though they would like to go to completion. So this idea of how exactly to tailor a massive on-line course to make it maximally beneficial for the groups that are taking it is a major issue, and something we know almost nothing about. So that will be a major focus.

My office and my research group are especially interested in the global perspective. I run Penn Global, and part of what motivates us is, who are the people in foreign countries, especially developing countries, who are using massive on-line courses? How can we enhance our offerings to really enhance their education? That’s our mandate in our office. And we are going to continue to research that particular issue.

The full study is published on HBR.org or at http://wp.me/p3Dxgw-aci.

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2 Comments So Far

Robert Becker

Do MOOCs upend traditional business education? I don’t think so. A MOOC, after all, is just a very long webinar; i.e. a lecture. It doesn’t threaten traditional education, because it is traditional education, only canned; i.e. recorded and therefore stripped of vitality.

If educational technology wishes to pose a threat, it will come from innovations, like the HBX platform announced by Harvard Business School. In that curriculum, an experiential design of learning is effective and attractive not because it is inexpensive or free or widely accessible, but because it is excellent in quality and generates superior outcomes.

People around the globe have a vast unquenched thirst for knowledge, skills, and education. I suspect in some underserved countries, the MOOC certificate commands a higher level of respect simply because MBAs are nearly unattainable.

I have been using free online education since 2005, when I visited free-ed.net to brush up on some calculus skills that had been covered in 18 years of mental dust. I share some of the characteristics of the mor typical MOOC students, educated but not particularly well-employed. This type of education, free (or low cost) and flexible, is a treasure. I am surprised more women, especially those who have off-ramped, are not taking advantage of MOOCs. In time they will.

it is too early to predict the role of online education. In 5-10 years the landscape will surely have evolved and matured, just as a Wharton MOOC is a far cry from free-ed.net.