Will Video Kill the Classroom Star?

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Wharton Profs. Christian Terwiesch (left) and Karl Ulrich
Wharton Profs. Christian Terwiesch (left) and Karl Ulrich

The Threat and Opportunity of MOOCs for Full-time MBA Programs

New research by Christian Terwiesch, Andrew M. Heller Professor and Co-director of the Mack Institute, and Karl Ulrich, CIBC Endowed Professor and Vice Dean of Innovation at the Wharton School, examines the emergence of the Massively Open Online Course (MOOC) and its impact on business schools.

Prior to the 20th century, entertainment was predominantly delivered via live performances. The advent of motion pictures fundamentally altered the entertainment industry: Why go and see a local clown in the town square if you can watch one of the best in the world on the big screen?

Christian Terwiesch, Andrew M. Heller Professor and Co-director of the Mack Institute, and Karl Ulrich, CIBC Endowed Professor and Vice Dean of Innovation at the Wharton School contend business schools are vulnerable. A top full-time two-year MBA program costs about $120,000. Blessed with those revenues, elite business schools have not focused much on efficiency. Their research shows that it currently costs a business school about $1,500 in instructional costs to provide one course to one student. Moreover, business schools encourage faculty research, which itself does not generate revenues, but costs approximately $400,000 per scholarly article published.

The emergence of the MOOC (Massively Open Online Course) offers the prospect of dramatically lower instructional costs, possibly without the financial burden of faculty research. Based on their experience at the Wharton School, Terwiesch and Ulrich show that it costs just pennies to register a new student in a MOOC and a few dollars for every student that actually completes the course. With such a cost advantage, one might predict that MOOCs will offer the same fate to professors as befell stage actors in the early 20th century.

Professors Terwiesch and Ulrich argue that this prediction is likely incomplete. The threat to business schools is not the MOOC, but the technology embedded in the MOOC: chunked asynchronous video content created by an expert. This technology, which they call SuperText, has the potential to destroy full-time MBA programs as they are known today. However, if used differently, the same technology can be used to strengthen today’s business schools by boosting student learning and leveraging faculty and other expensive assets. Unemployed clown or the Charlie Chaplin of education? Profs. Terwiesch and Ulrich outline a set of actions every faculty member and every business school can take to influence that destiny.

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