An increasing number of applicants to MBA programs are now considering online options in addition to in-person programs, according to a new extensive study of online MBA programs. That’s a big switch from pre-COVID years when the market for online programs was more clearly segmented and not competitive with full-time, residential MBA experiences.
“The market has shifted dramatically,” says Sarah Wanger. executive director of Kelley Direct Programs at Indiana University. “The market used to be so bifurcated. Now the data shows that pretty consistently our leads are looking equally at many options, hybrid, online, full-time, or doing nothing and putting off doing their MBA. This was very different than our market pre-COVID. Before, it was one of two options: If they were going to do an MBA, it would either be in-person or online. There is increasing acceptance of the ability to learn online as a pretty good substitute to full-time.”
That is one of several findings in one of the most extensive studies of the online MBA market by the Kelley School of Business. In addition to surveys of applicants and students, the Kelley team interviewed 36 professionals at 24 different business schools with online MBA options. The study also found that most MBA candidates fail to understand how online programs can greatly differ, with some offering significant in-person opportunities and career support while others often less-expensive programs are 100% online.
‘MOST ONLINE MBA OPTIONS LOOK HOMOGENOUS NOW’
Sarah Wanger, executive director of Kelley Direct Programs
“Most options look homogenous now,” adds Wanger. “It looks like they are all offering the same thing. It is really difficult for the market to understand the differences. In the face of that, they will jump to another factor like a price point.”
Will Geoghegan. chair of Kelley Direct programs, agrees. “If you are not native to this world it can be very difficult,” he says. “We have all of these amazing value propositions that are tough to communicate. A learner doesn’t know the value of dedicated career coaches unless they are stuck in a sub-standard MBA with no career coach. They don’t realize the value of in-person experiences until they graduate and realize they haven’t met any members of their cohort. Most of the learners are looking at the price point but not the entire experience.”
Geoghegan also discovered that a school’s full-time MBA ranking has no impact on an applicant’s decision to apply and enroll in a school’s online MBA. “We don’t think learners are selecting our online program because of our full-time MBA ranking,” adds Geoghegan. “When we gathered the data, there was no halo effect. It may be true for the M7s, but it did not hold true for us. The university’s perceived brand was far more valuable to an online program than a full-time MBA program ranking.”
SOURCE: Kelley Direct
‘IT WAS A LITTLE SHOCKING’ THAT THE RANK OF A SCHOOL’S FULL-TIME MBA WASN’T IMPORTANT DECISION FACTOR
Wanger says that finding surprised her and the rest of the Kelley team. “It certainly was a little shocking to us because there still is this perception that a full-time program rank was important to the success of an online MBA,” she says.
An online MBA ranking, however, mattered most. Some 70% of Kelley’s latest incoming class identified program rank as an important decision factor for choosing the program. Some 13% said the school’s and university’s alumni network were critical, while 9% identified the ability to customize the program and choose a specific major and another 8% said in-person options to complement the online learning was a decision factor.
On a qualitative basis, Kelley found the most important decision factors were a competitive cost compared to other top-ranked options, the flexibility of the online format, a flexible curriculum, and a strong alumni community (see below). Other important. ingredients in choosing a program were scholarships, networking, the choice of courses and majors, and. full-time faculty.
The survey of Kelley’s 229-student Spring 2024 online MBA class found that fully half of them had seriously considered an in-person MBA program. “They ultimately self-selected into an online MBA, even though they still highly value in-person learning,” says Abigail Gschwend, Kelley Direct associate director of enrollment management, who presented the study at the recent Graduate Management Admission Council conference in New Orleans. “So anyway our admissions team can sell applicants on our in-person experiences and domestic and international immersions is helpful.”
SOURCE: Kelley Direct
‘MANY PROSPECTIVE STUDENTS ARE UNAWARE THAT NOT ALL ONLINE MBA PROGRAMS ARE EQUAL’
“We still want to sell learners on flexibility,” says Wanger. “Post-COVID, we are seeing that we still get a flexibility market even when we focus on in-person experiences because learners are hungry for it.”
In the study, Geoghegan and Wanger trace the early origins of online education and offer an assessment of its widespread acceptance. “Although a clear market disrupter throughout the end of the last century, the OMBA (online MBA) has moved out of the realm of maverick, under-rated degree programs, questioned by employers and scoffed at by recruiters, and has become an established qualification sought after by prospective students for the level of flexibility the OMBA can provide,” the pair write.
“Beyond flexibility, OMBA programs are now categorized by 71% of employers as equal to or better than full-time MBA programs in terms of quality. Prospective students looking to capitalize on this shift in employer perceptions are increasingly entering the OMBA market, with the number of students in OMBA programs surpassing that of full-time programs in 2022.”
“Many are unaware that not all OMBA programs are equal, with only the very top-tier programs delivering the most significant impact to learners. Thus, it is critical that higher education leaders identify how top-tier OMBA programs emulate and improve upon the full-time MBA model, rather than focusing solely on convenience and flexibility…Given the recent surge of OMBA programs in the marketplace, it is crucial to recognize that OMBA programs do not offer uniform levels of value. Each institution designs its program around unique value propositions and prospective student markets.”
AUTHORS CONCLUDE THAT ONLY SEVEN OF THE 24 SCHOOLS STUDIED ARE TOP-TIER
The study authors found that 14 of the 24 schools interviewed replicated earlier MOOC-model programs, focusing on convenience by offering fully asynchronous programs with little to no faculty or per interaction. “These programs woo working professionals seeking flexibility and ease. Some programs attempt to offer both convenience and minimal engagement by incorporating occasional live virtual office hours, hosting limited networking opportunities, or inviting online students to on-campus full-time MBA events. However, very few online students take advantage of these opportunities. Three schools provided little flexibility of convenience by offering only fully synchronous coursework, which requires learners to be online at the same time each week for online lectures with little to no prerecorded asynchronous content.”
Geoghegan and Wange considered only seven of the 24 studied schools top-tier. “These top-tier programs offer flexibility and convenience as well as high-impact, high-quality student engagement unique to OMBA students,” they wrote. “These programs incorporate weekly virtual live class sessions into every course, offer in-residence experiences/classes to supplement online courses, run OMBA-specific student clubs and organization, provide high-impact career services and coaching, host global and domestic immersions specific to OMBA learners, and incorporate intensive teamwork throughout their programs.”
“The misunderstanding regarding varying levels of impact among low-, mid-, and top-tier OMBA programs is not surprising,” they concluded. “Our review of OMBA program website for the top 20 programs ranked by U.S. News for 2023 showcases that the marketing for OMBA programs appears to represent all programs as occupying similar positions and offering comparable value. Complicating matters, some universities have established OMBA programs that are tangential to or separate from their full-time programs.
SCHOOL WEBSITES CAN OFFER MISLEADING INFORMATION ABOUT THEIR ONLINE MBA PROGRAMS
“At other institutions, the lines between modalities are blurred with learners moving between synchronous, asynchronous, and in-person modalities. These models conflate the value propositions specific to each program or modality, leaving administrations and school leadership to decide if and how they will combine curriculum, co- and extra-curricular programming, and student services for students across modalities. This confuses prospective students who lack symmetric information during their decision-making processes regarding which modality–and which program–offers the highest quality.”
In an interview with Poets&Quants, Wanger often came out of the interviews with other business school officials somewhat frustrated. “Every interview, we would come out of it trying to bang our heads against the wall,” she says. “Everyone else gets to tout that they offer students clubs or organizations for their online students but when you ask them about it they say, ‘Well, students could do it but they are in-person so most don’t.'”
The difference in career services across the online MBA options was also significant. “When you poke there, they might admit they have one coach for the entire school and they work with online students if those students call them.”
DON’T MISS: POETS&QUANTS’ ONLINE MBA RANKING or HOW ONLINE MBA GRADUATES RATE THEIR PROGRAMS
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