The Growing Allure of the Online MBA

The Online MBA has risen in popularity due to its increasing flexibility, recognition and quality.

The proliferation of Online MBAs is a modern-day phenomenon, linked to both the development of the Internet and the need for more flexible business education to suit practising professionals. Hence it may surprise some that their history pre-dates the Internet itself. It is believed that the first online MBA was offered by Aspen University in 1987 - hardly a period in which the World Wide Web was widespread. Europe followed the US route but it was not until 13 years later - in 2000 - that the online MBA arrived in the Old Continent, with IE Business School the first to launch it.

Online MBAs offer experienced professionals a convenient opportunity to combine work and study. Short and long-term statistics reflect the changes in preferences of business school candidates, from other professional and flexible MBA degrees to online MBAs. While in 2015 half of all flexible MBA programmes reported a boost in application volume compared to 2005, the share of online MBA programmes reporting an increase was even higher – 67%. By comparison, the trend in applications for executive MBA degrees and part-time MBA programmes has dwindled by 52% and 49% respectively. In the US, the increased interest in online MBA programmes is tangible  - in 2015, half of the schools received more applications than in 2014, and in 2014, 43% of programmes reported a boost in applications vis-a-vis 2013. 

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This information was circulated by the Graduate Management Admission Council in its 2015 Application Trends Survey. Though the online MBA data is primarily US-centric, the study is global with the participation of 641 graduate business programmes in 306 universities from 35 countries, 42 US states and the District of Columbia.

Employment and Online MBAs

But how does the online MBA fare through employers' eyes? GMAC sheds some valuable light on this question: in 2015, only 16% of part-time MBA and 11% of executive MBA programmes expected most applicants to have the financial backing of their employer. On the other hand, 35% of online MBA programmes anticipated candidates to be financially supported by their companies.

And there's a good reason for this. Online MBAs are the most likely group among business education alumni to keep their current employer, according to the 2015 Global Management Education Graduate Survey Report. Of all online MBA respondents, 88% report plans to maintain their current job. Most other professional MBAs - part time/flexible and executive students - are similarly inclined. The difference is that their rate is a bit lower than that of the online MBAs – 77% and 75% respectively.

It's no surprise that the contrast with other business programme graduates is stark. Just 15% of one-year and two-year MBA graduates plan to stay with their company. This is further confirmation that, statistically, most online MBA students are already well steeped in their profession when enrolling on the programme. For this demographic, the online MBA is a more suitable way of studying business than the full-time option, in view of a stable career and the reluctance to give up work and remuneration. Another reason for favouring online over full-time study is that many quality schools offer relatively the same quality in both programmes, with the same, or at least no less accomplished, academic staff and lecturers.

The online degree should not be a compromise or of lower quality. Indeed, the candidates themselves need to make sure that it isn't. Good research into their selected programmes is crucial. In addition, alongside the learning process, the online experience should provide comparable opportunities for networking too. Of course, proactiveness is the key here. It is mandatory for a school offering the online MBA to also boast high-level technological facilities. An interesting trend in online MBAs that has been gaining momentum in recent years is the blended option. This means that online classes and lectures are followed by offline face-to-face sessions - e.g. 70% online time, 30% face-to-face time. 

Robert Bruner, dean of the University of Virginia's Darden School of Business, underlines the importance of the hybrid form of learning. "I'd say that the comparison of online education today to the old distance-learning, closed-circuit TV systems is not just a comparison of apples with oranges, it's almost a comparison of rocks versus diamonds," he says in an interview for Poets and Quants. Bruner, whose school has online courses in its executive programme, is a believer that online education will continue to improve.

For experienced individuals

In 2015, online MBA students were some of the most satisfied with their education experience. Almost 90% (89% to be exact) would recommend their programme, with the value rating standing at 94%, second only to executive MBAs (95%). The methods of instruction used in the classroom demonstrate once again that the programme is tailor-made for professionals. Compared to other postgraduate business students, those taking the online MBA used the team projects method above all, followed by lecture/discussions, case studies and pure lectures. Theory gives way to practice as the most suitable method for experienced people to accumulate hard and soft skills, know-how and other valuable competences.

Other than this, there are some different specifics. Richard McNeal, a recent MBA graduate in Management from Marylhurst University, shared his perspective in an interview for "The online experience is distinctly different from the classroom setting in many ways. For eMarylhurst Universityxample, the online classroom tends to favour those students who possess above average writing skills because, essentially, all communications, not to mention assignments, are written. Also, online programmes require more developed time management and organisation skills — you have to be disciplined to be successful."     

The rise in interest in online MBAs in the US in 2015 came from both domestic and international candidates. Forty-three percent of the programmes reported that they received more applications from domestic students and 24% noted a decrease in these candidates. The attractiveness of the online degree was also acknowledged by international applicants, albeit maintaining a relatively limited share - just 8% of the overall pool. Thirty-five percent of the programmes reported that they had more international candidates than in the previous year and 25% said they had fewer.

Although it may depend on the programme itself, online MBAs are generally easier to access, compared to the full-time option. The acceptance rate for Carnegie Mellon's MBA, for example, is 60% for online applicants and 31% for the two-year full-time MBA. The median GMAT score for the former is 45 points lower than for the full-time option.

Online degree rankings and accreditation

With online degrees gaining steam, some media have started making their own online MBA rankings. Unlike the undisputed traditional clout of the full-time rankings, online rankings are yet to assert their power to influence public opinion. They are interesting, since their criteria differ from those of full-time and executive programmes.

One of the most prestigious of these is published by the Financial Times. In order to feature, a school should be internationally accredited, the programme must have existed for at least the last four years and a minimum of 70% of the course must be conducted online. The FT also stipulates that students should undergo a selection process before admission and an examination before they finish the course. Two online surveys are conducted - one examining the schools and one examining the alumni. The responses of the graduates account for 65% of the ranking's weight and form six ranking criteria: "salary today", "aims achieved", "programme delivery", "online interaction", "salary increase" and "value for money". The schools' responses make up the remaining 35% of the weight and form 10 criteria, such as "doctoral rank" and others. 

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Whereas the FT ranking is global, the US News & World Report ranks only American-based programmes. Student engagement carries the highest weight (28%). Admission selectivity and survey of academic officials at MBA programmes both carry 25% and faculty credentials and training, along with student services and technology account for 11% each.

Finally, it should be noted that, while online MBA rankings originated because of market demand, scoring high in classic, well-established rankings such as the FT Global MBA rankings and Bloomberg's Businessweek rankings is a good indication of the school's overall quality.

"If the school is ranked high by the Financial Times, it's probably a good bet" is a proven axiom that applies as much to the choice of an online MBA as to full-time MBA programmes.

And yet, rankings should always be taken with a pinch of salt. They provide useful information, often interesting statistics and, above all, valuable data concentrated in one place. However, their overall credibility is not to be taken for granted. Instead, candidates should pay equal, if not even more, attention to accreditation. Just as in all other programmes, online MBA degrees have good apples and some not-so-good ones. Differentiating between them depends on applicants themselves, but research is of the essence. Accreditations are the most reliable hallmarks not just for the quality of online MBAs but for business education degrees in general.

This article is original content produced by Advent Group and included in the 2016-2017 annual Access MBA, EMBA and Masters Guide under the title “Riding the Cyber Wave”. The digital guide file will soon be available for download.

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