Beware the Oncoming Commodification of the Business Degree

As business schools around the world move to manage their increasing costs through economy-of-scale opportunities like online program managers, they risk long-term commodification of the school’s courses, and potentially its degree programs.
Vector of computer monitor displaying shopping cart with graduation cap in it.

Much has been written about the disruptions facing today’s colleges and universities. Increasing costs lead institutions to raise tuition, resulting in reduced enrollments as prospective students seek alternative higher education options. This scenario led Clayton Christensen to predict that half of all U.S. colleges and universities will close within the next decade. Business schools will not be immune to this disruption. Online delivery models, specialized master’s degrees, and for-profit boot camps will almost certainly reduce enrollments in traditional MBA programs. Business schools have many new opportunities in this disrupted ecosystem, but they must be thoughtful as they chart their course forward if they hope to build a sustainable competitive advantage.

Perhaps the most exciting and concerning trend in higher education is the move toward online learning. Online learning is exciting because it offers a mechanism for business schools to reach more students, and though it includes substantial upfront costs, these fixed costs can typically be distributed across the increased student population. Online learning is concerning to business schools because it doesn’t typically result in the same teaching quality as traditional face-to-face learning, and issues of student cheating are difficult to manage. More importantly, online learning is not currently geared to address and improve the skills our future business leaders must possess (e.g., empathy, communication, collaboration, grit, integrative thinking, etc.). Despite these concerns, online learning is clearly what large numbers of students want, and that demand appears to only be getting stronger. What is the business school to do in this complex 21st-century environment?

Online Program Managers

Business schools must embrace the online learning phenomenon. However, heading down this path without a broader strategy is short-sighted and dangerous. Business schools must also carve out their own domains of expertise in this space. One common way that traditional face-to-face courses and programs are converted to an online format is through online program managers (OPMs). OPMS are firms that partner with colleges to develop, manage, and, in some cases, market online courses and degree programs for the school. OPMs work with faculty and use best practices in online teaching to adapt course material designed for face-to-face meetings to online delivery formats.

OPMs manage all or most of the upfront development costs for such conversions and then recoup those costs—and their profit—from long-term revenue-sharing agreements with the college. This financial structure results in both the business school and the OPM focused on the quantity of student output to maximize the revenue-sharing agreement. Perhaps far more troubling, this approach, when taken to its logical conclusion, results in the commodification of the business course and eventually the business degree.

“Business schools need to follow a differentiation approach and use best online teaching practices to drive students onto campus for experiential training that yields deep learning.”

To wit, because OPMs use best practices to convert traditional business courses to online courses, online courses will converge toward one of a few similar learning structures. Once students witness the similarity of courses across institutions, they will enroll in the cheapest course available, and the commodification of the business degree will be complete. This pedagogical commodification will be disastrous for business schools and may make Christensen’s prediction look conservative.

There is a better, more strategic way. Rather than compete in a race to the bottom by commodifying the educational experience for students, business schools need to follow a differentiation approach and use best online teaching practices to drive students onto campus for experiential training that yields deep learning. Combining this approach with strong assessments that demonstrate what the students have learned in verifiable and replicable ways will further differentiate what a school has to offer future business leaders.

The success of this approach rests in the tight connection between the knowledge shared in the online portion of the course and the understanding that is engendered during the in-class portion of the course. Thus, the online course material must accomplish two goals. First, it needs to share the foundational information that will be covered during the class. Second, and most importantly, it must be delivered in an engaging way that primes the student to enter the classroom excited and ready to apply that knowledge. Put differently, the online material offers students the “secret password” to enter the physical classroom and join their colleagues in a vibrant discussion about why the material they are learning matters and how it can be applied at their work.

Discover, Discuss, Do

At the University of Texas at San Antonio’s Center for Professional Excellence within the college of business, we differentiate our executive education programs by using a pedagogical model we call “Discover, Discuss, Do” (an adaptation of the “See One, Do One, Teach One” learning model often used in American medical schools). The Discover phase is an online experience whereby students learn by becoming immersed in the course material. It is our replacement for the lecture component found in the traditional face-to-face course. Each online session starts with a diagnostic assessment that establishes the learners’ baseline knowledge in that subject. Throughout the online session, the knowledge the learner achieves is continually reassessed. The online session comes to an end with a series of questions on which learners collaborate to answer.

The Discuss phase of the model represents the first portion of the in-class experience. The questions ending the Discover phase of the online experience become the springboard by which learners enter the classroom, immediately engaging in a dynamic exchange of ideas. The instructor’s role is to facilitate these discussions, keeping the participants on track and continually moving toward larger groups discussions. Participants learn in the Discuss phase through active participation, sense-making and sense-giving, and reflection. These activities have the secondary benefit of helping students develop their communication skills, including becoming better listeners.

The Do phase of the model represents the second portion of the in-class experience and pits learners’ newfound knowledge against real-world problems, forcing them to develop solutions. Simulations and experiential exercises are commonly used during this phase of the classroom experience, and participants typically work in groups, which further develops their collaboration skills. The Do phase is critical in this learning model, as it demonstrates to participants the applicability of what they have learned. Demonstrating relevance also keeps the learners engaged, as they can readily identify the new tools they have added to their skillset (see the Sidebar for an example of how the Discover, Discuss, Do framework looks in a class).

Through the development of the Discover, Discuss, Do pedagogical model, we have differentiated the learning experience and created barriers to entry that protect against the commodification of purely online and generic hybrid programs. At the same time, we have leveraged the online experience to share basic course knowledge and assess student knowledge retention. Ultimately, though, we have used the online experience to drive learners into our classroom, where we can offer them an unparalleled, differentiated learning experience.

Bruce C. Rudy, senior executive director of the Center for Professional Excellence, associate professor in management, University of Texas at San Antonio College of Business Bruce C. Rudy is senior executive director of the Center for Professional Excellence and an associate professor in management at the University of Texas at San Antonio’s College of Business.