Will MOOCs Undermine Top Business Schools, or Help Them?

Massive open online courses are not currently cannibalizing tuition-based programs at top business schools, according to an enthusiastic report from the University of Pennsylvania. Rather, MOOCs could become a recruiting tool for tapping new pools of potential students.

Business schools that offer MOOCs should also figure out how to charge the many students who sign up for the online courses without intending to complete them, write the authors of the report.

The report looks at data and survey responses from students in nine MOOCs offered by Penn’s Wharton School. The researchers found that 78 percent of the students were from outside the United States, and 35 percent of the U.S. residents taking the business MOOCs were foreign-born. Among the Americans, 19 percent were members of underrepresented minority groups, compared with 11 percent among M.B.A. students as a whole.

“Our data suggest that, at least at present, MOOCs run by elite business schools primarily attract students for whom traditional business-school offerings are out of reach,” write the authors.

Rather than undermine the existing business model, MOOCs may help Wharton and other business schools recruit outside the normal pipelines, the researchers speculate. “These three groups—students from outside the United States, especially developing countries, foreign-born Americans, and underrepresented American minorities—are students that business schools are trying to attract,” they write.

The Penn report also reiterates a point that has become a refrain among researchers looking at free online courses: Completion rates are poor metrics for judging the success of a MOOC because the goals of students who register for such courses vary. Indeed, only 5 percent of the registrants in Penn’s business MOOCs finished their courses, and those who completed were “disproportionately male, well-educated, employed,” and from countries in the Organization for Economic Cooperation and Development; also, American students “tend to be white.” But a mere 43 percent of students who were surveyed said that obtaining a certificate of completion was important to them.

Based on the apparently diverse motivations of people who sign up for MOOCs, the Penn researchers offer some business advice to institutions offering them: Find ways to charge students who have no plans to complete their MOOCs.

“Business schools must bear this in mind and move away from a business model of charging for certificates of completion,” the authors advise. “Instead, they must tailor offerings to the goals of these learners, whatever they may be.”

Penn, which has released several reports (not all of them flattering) based on data from its MOOCs, was an early institutional partner with Coursera, the largest MOOC company. The university also owns a stake in the company. Penn’s provost, Vincent Price, is listed as a member of Coursera’s advisory board.

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