Online Education in the Era of COVID-19: MBA Programs Embrace Remote Learning

The world has changed since our extensive report only a few weeks ago in early March 2020 on COVID-19’s early effects on business schools. At that time, only a few coronavirus cases had appeared in the United States. But currently, almost half of the world’s population—about 44 percent—now lives under some form of a government-mandated social distancing lockdown order, as do most people in America.

In the U.S., those lockdown orders now encompass 30 states and about 280 million people, which is almost 80 percent of America’s population. And with the epidemic now far more widespread in the United States than in any other nation, the U.S. has reported nearly 240,000 cases and 5,400 fatalities—more deaths than in the 9/11 World Trade Center catastrophe.

Dr. Deborah Birx, the White House Coronavirus Response Coordinator, told NBC News on March 31 she expects 200,000 Americans will die from the Coronavirus “if we do things almost perfectly.” That is equivalent to all the deaths from World War I and the Vietnam War combined. And the President warned Americans on April 1 to prepare for a “vicious” upcoming period in our nation’s history.

MBA Programs Scramble to Adapt

Business schools are scrambling to adapt to the upheaval, usually by complying with directives thrust down upon them with little advance notice by their university administrations.

Within hours of our report’s publication on March 6, the University of Washington, Stanford University, and Harvard University all closed not only their business schools but all their campus buildings, including student residences. And by now, almost all of the universities in the United States have followed suit.

One recalcitrant exception that re-opened after spring break—Liberty University in Lynchburg, Virginia—quickly suffered a spate of COVID-19 infections that spread like wildfire. The episode scared 800 students into fleeing the campus, outraged Lynchburg’s permanent residents and forced Liberty to shut down buildings for the remainder of the academic year.

The Human Impacts Hit Home

The human dimension of this crisis has spared neither business schools nor their parent universities. Our coverage previously focused on how a reckless, quarantine-breaking young doctor likely exposed most of the MBA students from the Tuck School of Business at Dartmouth College to the coronavirus. Since then, the dean of the highly-ranked Paris-based business school INSEAD, Ilian Mihov, was diagnosed with COVID-19 and remains in an isolation unit at a medical center in Singapore.

Only days before, the jet-setting Dean Mihov had been shaking hands during a reception at the school’s new Hub for Business Innovation. That’s INSEAD’s new branch campus in San Francisco, one of the first cities in the United States to declare a state of emergency and impose a mandatory lockdown.

In Evanston, Illinois, the virus ripped through Northwestern University’s Kellogg School of Management. There, four employees in Kellogg’s Global Hub left university buildings to isolate at home after receiving COVID-19 diagnoses and quarantine orders. So far, Northwestern has confirmed seven cases at the school’s Evanston and Chicago campuses.

And in Cambridge, Massachusetts—not far from the Harvard Business School—Harvard University’s President Lawrence Bacow announced plans to self-isolate following his COVID-19 diagnosis. Bacow is known to maintain a close working relationship with HBS Dean Nitin Nohria, who is arguably the most influential figure in graduate management education. Although a search had been underway for Dean Nohria’s replacement, Harvard’s administration reportedly asked Nohria to delay his retirement and steer HBS through the Coronavirus crisis.

It’s probably not a coincidence that Harvard’s administration extended Dean Nohria’s contract. That’s because he had championed the school’s pioneering new Harvard Business School Online brand of pre-MBA online courses, which we first covered during mid-2019 in this BSchools article.

Like Harvard’s, almost all residential United States MBA programs plan to move their courses 100 percent online for the foreseeable future—a trend we accurately predicted in our previous article.

Damage Control at Stanford

Trying to display a brave face, some of the most elite business schools in the world have suddenly undertaken massive public relations damage control operations as they struggle to crash-convert from on-campus to online instruction.

For example, this Poets and Quants article documents the challenges faced by Stanford’s Graduate School of Business while abruptly converting the school’s residential MBA program to online delivery. Caught off-guard, Stanford’s spokespeople go to extraordinary lengths to emphasize their achievements in setting up their online curricula in only a few days.

But these depictions ignore an inconvenient truth. The administrations of elite business schools like Stanford’s—schools that fought the overwhelming trend towards online education—knew (or should have known) that an uncontrolled epidemic could swiftly shut down their buildings. After all, universities like Stanford operated during the 1918 Spanish Flu Pandemic, the 1958 Asian Flu Pandemic, the 1968 Hong Kong Flu Pandemic, the AIDS Pandemic, the 2009 Swine Flu Pandemic, and the previous decade’s SARS, MERS, Ebola and Zika epidemics. These epidemics killed hundreds of millions of people around the world, and then as now, government-mandated lockdowns existed in many areas as the primary disease control strategy. That business schools like Stanford’s apparently did little in the way of developing prudent contingency plans well in advance is unfortunate.

Stanford’s GSB and business schools like it that didn’t offer MBA curricula online face a serious problem. Online classes desperately slapped together at the last minute—typically using off-the-shelf software like Zoom designed not for instruction but for virtual business meetings—are insufficient substitutes for the big-budget, premium-quality online educational courseware developed by all the top online MBA programs we’ve profiled here on BSchools since early 2018.

The investments required to create sophisticated courseware of this calibre for the top online MBA programs at schools like the University of North Carolina at Chapel Hill’s Kenan-Flagler Business School, Carnegie Mellon’s Tepper School of Business, and the University of Michigan’s Ross School of Business can seem staggering.

2U, an online program management (OPM) vendor whose clients include UNC, claims that it can cost as much as $10 million up front to create and market a single online graduate-level course. And that sum doesn’t include the added licensing fees for critical software components like Instructure’s Canvas platform, which we profiled in our BSchools report on learning management systems at the best MBA programs.

An April 2020 Poets and Quants report quotes the president of the higher education consulting firm Eduvantis, Tim Westerbeck. He explains that business schools caught flat-footed like Stanford aren’t able to transition to online education nearly as effectively as those with previously deployed online delivery systems:

Those schools are just ahead. They had the systems and capacity in place and the mindsets and training to move in that direction much more easily. I think for schools lagging behind in their intent to move to the online space at a sophisticated level, many of them were caught really, really off-guard and are now trying to make good with Zoom or some other technology that’s really not an educational technology; it just allows communications.

Ripping Off MBA Students?

Current and prospective MBA students understand these facts. What’s more, they believe that business schools without previous investments in online infrastructure will rip them off if the schools don’t adjust their tuition rates.

A March 2020 Poets and Quants survey of 300 respondents planning to matriculate in fall 2020 revealed that almost half think they should receive a discount on tuition from residential MBA programs forced to start online because of lockdowns. And these prospective students don’t think it should be a token discount of 10 or 20 percent. They think that business schools like these need to reduce tuition on average by almost 40 percent. Some students have already started asking for refunds not just for tuition, but for room and board as well.

P&Q’s interview with Westerbeck continues:

Besides current students asking for refunds, Westerbeck says the costs incurred by moving online in a scramble has also been a big hit for many institutions that didn’t already have significant online infrastructure. From implementing online technologies and systems to training faculty and staff on its use, the cost of going online—particularly in a desperate and rapid way—can be substantial.

“They’ve been forced to behave very differently than their business models suggest,” Westerbeck says of B-schools. “Everyone has been trying to move more into online delivery, but not this way.”

Pass/Fail Grading: An Inexpensive Accommodation

Schools like Stanford understand that under circumstances like these, they can’t possibly provide the kind of educational value that’s consistent with their value proposition, or with the prepaid tuition and fees they’ve already collected. Keep in mind that, counting opportunity costs, the total costs of attending private schools like these can exceed $320,000, of which tuition alone can exceed $200,000.

But these are business schools. They’re run by savvy business leaders, and money is important to these men and women. They’re not likely to reduce or refund tuition until they’ve exhausted other alternatives.

One way the schools can placate dissatisfied students forced to accept poor quality online instruction is by switching to pass/fail grading. This alternative costs the schools nothing, and with some students—especially the marginal academic performers—can earn tremendous goodwill.

Not surprisingly, Stanford’s GSB was one of the first business schools to take this step. A few days later, Michigan Ross announced a similar option.

Next, the University of California at Berkeley allowed graduate and MBA students to convert traditional letter grades to satisfactory/unsatisfactory marks. It’s interesting that Berkeley is a university with a long pass/fail tradition, even applying a modified pass/fail grading system to required courses in its super-elite law school as far back as the early 1980s. And although not widely known, these days Berkeley allows as many as one-third of a student’s courses to be graded on a pass/fail basis—a much higher limit than at many other universities. Because courses are now only available online, Berkeley’s administration is considering pushing that 33 percent cap even higher.

For the remainder of the academic year, several universities like Duke University and MIT will require pass/fail grading by all their academic divisions, including their business schools.

It increasingly appears that—just like closing campuses and switching to online instruction—the adoption of pass/fail grading will soon become nearly universal among destabilized American universities. These trends will likely continue until COVID-19 is eradicated from the population, which could take years. Hence, at many business schools, the combination of pass/fail grading along with online instruction could very well become “the new normal.”