The perfect blend
How an MBA helped
one student
build her
career in
coffee
Page 4Business Education
Online Learning
FT SPECIAL REPORT
Monday March 2 2020 http://www.ft.com/reports | @ftreports
Inside
The Financial Times
online MBA ranking
The top 10 courses from
around the world
Page 3Tech ventures reshape
business education
New disrupters want
to profit from a world
that’s hungry to learn
Page 2Online or on-campus?
Students need to weigh
the benefits of flexibility
versus networking
Page 2Masterclass
Insights into strategy,
luck and irrational
bias from this year’s
top-ranked school
Page 4Lizette Melendez grew up in El Paso,
one of the poorest cities in Texas, and
was the first in her family to go to uni-
versity. Now the American, who is
Latina, is studying for an MBA at a top
USbusinessschool.
Sheisnotdoingsointheconventional
way. Ms Melendez is part of the first
cohort in the MBA@Rice, launched by
Houston’s Jones Graduate School of
Business at Rice University in 2018 on
the2Uonlinelearningplatform.
Most of the course is delivered digit-
ally. Flexibility was important for Ms
Melendez, who could not afford to quit
her job as policy adviser to a member of
the Austin, Texas, city council because
ofundergraduateloandebt.
Experiencing financial hardship has
inspired Ms Melendez to explore
launching a social enterprise, possibly
to raise financial literacy in public
schools. She is therefore keen to hone
herbusinessskills.
Peter Rodriguez, dean of the school,
claims that the MBA@Rice is a step
towards democratising business educa-
tion. The lowest and highest student
incomes in the online cohort are below
those in the executive MBA class, which
issimilarinageandexperience,hesays.
“It is not such a significant difference
that they have blue-collar jobs. But
online education helps combat the geo-
graphical and cost challenges of getting
anMBA,”saysProfRodriguez.
Enrolling a diverse intake is a priority
formostbusinessschools,includingstu-
dents from less affluent backgrounds.
Diversity of thought improves class-
roomdiscussion,theschoolsargue.
Technology can lower the financial
barriers to a full-time MBA, such as
quittingapaidjobandfundingsteeptui-
tion and living fees. It can also improve
access for people from poorer areas who
donotliveneartopschools.
The most elite residential MBAs cost
upwards of $200,000 — not including
the lost earnings from full-time study.
With schools incurring smaller costs for
classroom facilities, digital degrees are
oftenafractionoftheprice.The $22,000 iMBA from the Gies
College of Business at the University
of Illinois at Urbana-Champaign is
about$61,000cheaperthanthecampus
version, which is being phased out,
though Illinois residents get a hefty
discount.
Jeffrey Brown, dean of Urbana-Cham-
paign, says that larger online class sizes
offset the substantial cost of paying fac-
ulty to teach. “Online learning is an
economies-of-scalegame.”
He adds: “We are making a high-qual-
ity MBA accessible to people who other-
wisewouldnotbeabletoaffordit.”
But there are no agreed definitions of
socio-economic status, or consistentstandards for measuring progress on
financialdiversity.
Evidence is hard to come by; compli-
cating matters is the fact that online
MBA students tend to have significant
work experience and a correspondingly
decent income. However, some stu-
dents are the main breadwinners sup-
porting their low-income families, says
John Colley, associate dean at the UK’s
WarwickBusinessSchool.Online MBA students also come from
multiple countries with different
incomelevelsandpurchasingpower.
Some programmes are as expensive
online as they are on campus, raising
questions about their accessibility.
North Carolina’s Kenan-Flagler Busi-
ness School charges $125,589 for its
online MBA, just shy of the full-time fee
($133,252 for those who do not reside in
thestate).
Kenan-Flagler’s dean, Douglas Shack-
elford, keeps online classes small to
maintaininteraction,whichhearguesis
reduced in large groups and inflates the
costoffaculty.
“It is a misconception that high-qual-
ity online education is easy and cheap to
produce,” says Prof Shackelford, adding
that his business school offers a limited
number of scholarships based in part on
astudent’sfinancialneed.
If costs are minimised, virtual study
can be a vehicle for social mobility,
according to Lisa Umenyiora, executive
director of careers at Imperial College
BusinessSchool.
Of the London school’s online MBA
cohort that graduated in 2019, 67 per
cent changed roles within four months
and many were promoted, Ms
Umenyiora says. The average salary
increasewas32percent.
Ms Umenyiora adds that, unlike at
some institutions, Imperial’s online stu-
dents have access to all of the school’s
career services, including individual
appointmentswithcareersconsultants.
However, Prof Rodriguez at Rice:
Jones says that online students may
miss out on vital networking opportuni-
ties with students, professors, alumni
andcorporaterecruiters.
While many business schools have
built digital networking platforms,
he says they require more effort and co-
ordination to use. “Networking is
more incidental and frequently availa-
bleoncampus.”
Ms Melendez concurs. She adds that
recruiters remain wary of online learn-
ing.“Thereisstillstigmathatitiseasyor
fake. It sets off alarm bells,” she says.
However, the stigma fades away when
she name-drops Rice, a respected insti-
tution. “Then, they view it like any
otherdegree.”
In order to recoup her tuition fees,
Ms Melendez is interviewing for
project management jobs in the public
sector. “Before, I could only dream
about these roles. Now I am getting calls
backfromrecruiters.”Digital degrees open doors to
broader student demographic
Diversity
Businessschools want a
more varied student intake.
Technology may offer a
solution, writesSeb MurrayMBA on the way: Lizette Melendez‘It is a misconception
that high-quality onlineeducation is easy and
cheap to produce’T
he future of the MBA is dig-
ital. While the number of
applications for places on
campus-based courses has
declined globally for the
past two years, demand is up for most
onlineMBAs.
Online MBAs outgrew all other
professional MBA programme types
in the US in 2019, according to the
applications data gathered each year
by entrance test administrator theGraduate Management Admission
Council(GMAC).
“Theshiftisfromallformsofphysical
study to online,” Sangeet Chowfla,
GMAC president, says. “Online gives
new options for people who used to go
for the part-time evening or weekend
programmes as well as the new genera-
tionwhohavegrownupdigital.”
There is some evidence that online
MBAs are cannibalising campus-taught
courses. The MBA.com ProspectiveStudents Survey last year found that 42
per cent of those considering part-time
study were also considering an online
MBA,upfrom32percentin2015.
However, it is also true that online
programmes are drawing in people who
would never previously have consid-
ered a business education, either
because of the flexibility offered by
being able to study wherever and when-
everyoulikeorbecauseofthelowercost
ofsuchcourses.“The demographic of the typical
online student is older and more
experienced than campus-based stu-
dents,” Mr Chowfla says. “Therefore it
cannot be just a case of online courses
taking away demand from campus-
basedcourses.”
Business schools are reacting by
increasing their online MBA offerings.
Five years ago just 20 per cent of the
862 institutions accredited by the
Association to Advance CollegiateSchools of Business (AACSB) said they
offered an online MBA. At the end of the
last academic year, this had grown to
35percent.
“Learners demand more options,
which is why we have also seen a growth
in specialist, accelerated and part-time
masters programmes,” says Juliane Ian-
narelli,AACSBchiefknowledgeofficer.
Schools, she adds, have become
better at delivering online education,
Continued on page 2An accessible
option — but
not always a
cheaper one
As demand for online MBAs surges, providers are
adopting different strategies. ByJonathan Moules
MARCH 2 2020 Section:Reports Time: 27/2/2020 - 16: 49 User: neville.hawcock Page Name: BEB1, Part,Page,Edition: BEB, 1, 1