Disruption Ahead: What MOOCs Will Mean for MBA Programs

Knowledge @ Wharton:

In a new research paper, Christian Terwiesch, professor of operations and information management at Wharton, and Karl Ulrich, vice dean of innovation at the school, examine the impact that massive open online courses (MOOCs) will have on business schools and MBA programs. In their study — titled, “Will Video Kill the Classroom Star? The Threat and Opportunity of MOOCs for Full-time MBA Programs” — they identify three possible scenarios that business schools face not just as a result of MOOCs, but also because of the technology embedded in them. In an intereview with Knowledge@Wharton, Terwiesch and Ulrich discuss their findings.

An edited transcript of the interview appears below.

Knowledge@Wharton: Christian, perhaps you could start us off by describing the main findings or takeaways from your research?

Terwiesch: Let me preface what we’re going to discuss about business schools by saying that Karl and I have been in the business school world for many, many years. We love this institution, and we really want to make sure that we find a sustainable path forward for business schools.

Business schools in the world of these massive online courses are somewhat threatened, and a lot of that has to do with our cost structure. We are very expensive organizations. There are two main reasons for that. We do two things. We teach and we do research, but only the teaching part comes with revenues, and so often, the research work that we do, all this great research work that is funded for us, is funded by our students. The second thing is, honestly, like most non-profits, we don’t always have an eye on efficiency. If you and I were running an airline together and we were to fly our planes half empty, very quickly, bad things might start to happen. Yet that culture of efficiency and productivity is something that we haven’t had in the business schools. As these MOOCs come along, the cost pressure on our institutions is going to change because suddenly, there’s a very serious alternative to coming to a two-year degree program at Wharton.