The Coronavirus: COVID-19’s Effects on Business Schools

Following the potential exposure of as many as 100 Dartmouth College MBA students to the coronavirus, concerns about the pandemic’s effects on business schools are suddenly assuming intense urgency. The SARS-CoV 2 virus that causes the COVID-19 coronavirus disease—the world’s number-one story now and for the foreseeable future—has killed more than 3,350 people and infected more than 100,000 in over 60 nations on all continents except Antarctica.

According to this video report by WHDH-TV in Boston and the New York Times, a Dartmouth-Hitchcock Medical Center employee displayed coronavirus symptoms when he presented for an examination by a medical worker. That worker told the patient, who had just returned from Italy, to self-isolate at home for at least the next 14 days while waiting for test results.

But the patient broke his quarantine and instead showed up hours later at The Engine Room, a packed music nightspot less than five miles from Dartmouth’s campus. The following Tuesday, New Hampshire public health officials verified that he was the state’s first presumptive coronavirus case based on a positive test result, before announcing that a second presumptive case who also tested positive was a “close contact” of the patient. New Hampshire’s health commissioner then issued an executive order requiring the patient to isolate at home and avoid any contact with others.

Who else was at the Engine Room that Friday night, February 28? It was an invitation-only, private mixer attended by about 100 students from Dartmouth’s Tuck School of Business, along with about 30 or 40 physicians-in-training from the residency program at Dartmouth-Hitchcock, an academic medical center. Coincidentally, on that very day, the United States Centers for Disease Control in Atlanta had issued yet another travel advisory. The CDC instructed everyone who had returned from Italy to self-isolate at home for at least 14 days. So far, the coronavirus has claimed 107 lives and infected 3,090 people within Italy, and that country has closed all schools, colleges and universities across the nation through at least March 15.

On Facebook, the Engine Room’s owners reported that after consultation with state officials, they had canceled three night’s worth of events while the venue had been “sanitized.” Meanwhile, commentators in those Facebook threads expressed outrage.

The Dartmouth administration’s carefully-worded email message containing the news on March 3 sent shockwaves through the university community. Although the administration downplayed the report by asserting that Tuck students at the nightclub “were believed not to have had any direct contact with the employee,” the administration was not certain, and even if it was, “direct” contact may not be necessary to transmit the SARS-CoV 2 virus in all cases; that’s because the related SARS coronavirus has been shown to live for up to nine days on hard surfaces. Furthermore, the following day, the Los Angeles County public health director, Dr. Barbara Ferrer, declared a state of emergency and delivered what NBC Nightly News in its top story termed a “startling warning shaking the region of 10 million people:”

Use verbal salutations in place of handshakes and hugs and whenever possible, try to keep six feet between you and other people you don’t know. . .

Business Schools Grapple with the Coronavirus

Meanwhile, the broad effects of this illness on business schools like Tuck continue to appear. The effects range from the abrupt cancellation of exchange and immersion programs, to a switch from in-person to Skype and FaceTime application interviews, to the sudden conversion of on-campus classes into online instruction.

Before we provide a sampling of these effects, first we present an update on the rapid and relentless spread of this dangerous illness in two nations.

COVID-19: Out of Control in China, Hidden in the United States

Due to COVID-19, about 10 percent of the world’s population—mostly within China, South Korea, Singapore, Iran and Italy—remains locked down under some form of compulsory isolation.

Despite the Chinese government’s recent assertions to the contrary, two Western journalists who arrived in China in early March 2020 report that the illness remains out of control following the collapse of the healthcare system in metropolitan Wuhan some weeks before. They report that the number of infected patients in China continues to double on average at least once every five days, following the typical exponential growth curve that’s standard among many infectious diseases. As of this writing, China’s government has officially reported about 80,000 infected people and 3,000 deaths, although most astute observers believe those levels to be dramatically understated.

In mid-February 2020, a paper from a theoretical biology and biophysics group at the Los Alamos National Laboratory argued that despite the extreme confinement efforts in China, the disease still remained uncontrolled. The experts estimated that on average, every carrier was infecting between 4.7 and 6.6 individuals before home quarantine containment policies were instituted—up to 66 times the transmissibility of some variants of influenza—with a doubling time of only 2.4 days. By contrast, after the lockdown, on average each Chinese carrier was still infecting more than two others.

What does this mean? In other words, despite the most aggressive social separation initiative in history, China still couldn’t control the spread of the disease. The authors reached a sobering conclusion. They suggest that because:

. . .quarantine and contact tracing of symptomatic individuals alone may not be effective. . .active and strong population-wide social distancing efforts, such as closing down transportation systems, schools, discouraging travel, etc., might be needed to reduce the overall contacts to contain the spread of the virus.

In the United States, media reports across the nation indicate that only about 160 cases have been confirmed so far, with eleven deaths, mostly in the Seattle-Tacoma area. However, before March 2020 very little testing took place in the United States; a single Canadian province, British Columbia, had run more tests than the 600 run within the entire U.S. during this period. Furthermore, many barriers to testing continue to exist across America, where a coronavirus test requires a doctor’s order, a medical lab visit and $3,200 for those without insurance coverage. By contrast, in South Korea, the test is free of charge to patients and widely available from fast, drive-through testing labs.

COVID—19’s Effects on Business Schools

Besides the massive exposure among the students at Dartmouth’s Tuck School, a number of the coronavirus’ other effects on business schools have suddenly drawn intense scrutiny.

“A Turning Point for Online Education”

The first effect of the coronavirus is likely to be that business schools will aggressively extend online education to supplement or temporarily replace their on-campus programs. Andrew Crisp of the London-based business school consulting firm Carrington Crisp told Poets and Quants,

The really interesting thing is the rapid improvement of the online provision. If students have a good experience, this could be a turning point for online education.

According to the Financial Times, by early March two of these temporary conversions had already happened in Northern Italy, one of the nation’s regions hardest hit by closures of public facilities. There, campus shutdowns related to coronavirus outbreaks forced a switch to online instruction by two Milan business schools, MIP Politecnico di Milano and the SDA Bocconi School of Management.

A few weeks earlier in the United States, the President had signed an executive order precluding anyone who has traveled within China during the previous 14 days from entering the U.S., and shortly afterward, all American airlines suspended flights serving China for the foreseeable future. Additional schedule cutbacks on Asia routes took place early in March, with some U.S. carriers asking employees to take unpaid leaves of absence. For these reasons, American and European on-campus business school programs that rely on students from Asia could be severely impacted by a lack of demand from potential students who may be unable or unwilling to travel.

For example, the University of California at San Diego’s specialized business master’s degree programs tend to attract huge proportions of Asian students. At the university’s Rady School of Management, programs in quantitative methods will probably suffer the toughest blow. At least half of the students in the school’s business analytics master’s program are Chinese nationals, and the master’s in finance cohort counts more than 90 percent of enrollees from China. About 10 to 15 percent of MBA students are also Chinese nationals, according to P&Q.

By contrast, schools with flexible online MBA capabilities like SDA Bocconi and Indiana University’s Kelley School of Business are reported to be considering online starts for foreign students enrolled by their on-campus divisions. After the epidemic ends, these students can continue in person.

By contrast, those laggard universities still without any online MBA capabilities—mainly the super-elite M7 schools—will probably end up forced to accept more domestic candidates. They would do so in order to protect their all-important yield ratios while a much higher proportion of international admits than usual declines to enroll.

No Admissions Testing

Second, for the foreseeable future, students in seven nations including China, South Korea, Thailand, Kuwait and now Italy are not going to sit for admissions tests like the Graduate Management Admission Test (GMAT) or the Executive Assessment (EA). This embargo on the tests that more selective business schools typically require will hit Chinese business school applicants especially hard, because more candidates now take the GMAT in China than in any other nation besides the United States.

What’s more, some experts expect that the test administrators—the Graduate Management Admissions Council and for the Graduate Record Examination (GRE), Educational Testing Service—are likely to expand testing suspensions during the next few days. They expect the forthcoming suspensions to include all Asian nations facing epidemics along with additional areas of Europe affected besides Italy. Assuming that happens—an eventuality that seems inevitable to many—some experts speculate that universities may simply dispense with their admissions testing requirements for the foreseeable future. What’s more, within the past few days, some business schools were reported to even extend “conditional” enrollment offers to applicants unable to take admissions tests, although details on such waivers were not yet available before this article’s publication.

This uncertainty around testing is likely to further drive enrollment in online MBA programs. As we’ve now covered in depth within more than half a dozen articles here on BSchools, it’s well-known that schools frequently award GMAT, GRE, and EA waivers to students applying to online programs who have sufficient work experience. These waivers are even offered by several top-ranked schools, like the University of North Carolina at Chapel Hill’s Kenan-Flagler Business School.

(Parenthetically, in a further erosion of admissions testing requirements for MBAs, during early 2020, two super-elite M7 on-campus MBA programs even got into the GMAT-waiver game for the first time. They are the MIT Sloan School of Management and Northwestern University’s Kellogg School of Management. Of course, securing the waivers generally requires applying to these schools’ deferred enrollment MBA programs early.)

New Locations for Some International Events

Third, a number of events scheduled for the Asia-Pacific region by United States business schools now face location changes to safer areas such as South America, although whether the rescheduled events will take place or eventually face cancellation remains to be seen. These include business center networking tours, social impact projects, and global immersions frequently associated with online as well as on-campus programs. The Kelley School told P&Q that it canceled trips to China, Thailand, and Indonesia, and may have to cancel trips to South American locations as well; Washington University’s Olin School also moved its summer trip from Shanghai to Peru.

Canceled International Events

Fourth, some U.S. business schools’ instructional activities within Asia are being axed altogether. One that made news on February 13 was a program abruptly canceled by Stanford’s Graduate School of Business. This was a long-planned exchange with an MBA partner of MIT’s Sloan School in China that the GSB canceled the day after it began, blaming logistics problems. According to Vox:

Recode has also learned that the Stanford Graduate School of Business—arguably the world’s most elite training ground for budding tech executives and venture capitalists—has canceled its exchange program with students at Tsinghua University in China. The school says the program was canceled one day after it started; Stanford stopped short of expressing concern about its students becoming infected on the trip.

“This was a programmatic decision made due to the changes in air travel to and from China and our concern for the Tsinghua students’ ability to get home, not based on health concerns,” Kristin Harlan, Stanford Graduate School of Business (GSB) director of strategic communications, told Recode in a statement.

Besides Stanford, most other business schools—including the University of Michigan’s Ross School—have abandoned their China involvement for the time being. And not surprisingly, Tuck has scrubbed its student consulting projects outside the United States irrespective of location.

MBA Fair Cutbacks

Fifth, a number of events marketed to the business school community are facing cutbacks throughout the Asia-Pacific region. These include MBA fairs like the QS World MBA Tour, the MBA Tour and Access MBA.

The World MBA Tour has a single event scheduled for Asia, in Shanghai on March 29, with only 13 universities from outside China planning to attend. The MBA Tour still has events scheduled in Jakarta, Manila and Taipei from March 14 through the 18, but only five schools appear listed. By contrast, Access MBA plans the most robust schedule, with six events in Asia kicking off in Bangkok March 28; at that event 16 schools continue to appear on the schedule, mostly from Europe.

Some observers believe that it’s only a matter of time—maybe a few weeks at most—before many such events that we published updated schedules for in BSchools only days ago will be postponed throughout Europe, the Middle East and North America as well. The risk exposure is probably too great for these tour promoters, who are probably engaged in conversations with their law firms, liability insurance carriers, and client business schools right now about their plans.

Financial Assistance for Chinese Students

Finally, an ancillary effect relates to the costs of graduate management education during business shutdowns within China related to the pandemic. China is still a poor country, and even affluent Chinese parents rarely maintain at least three months of living expenses to guard against job furloughs. Moreover, Chinese consumers are severely leveraged, with most consumers carrying substantial debt burdens.

Chinese parents of students in specialized business programs may face severe financial stress if the Beijing government decides to keep businesses closed for an extended period to combat the outbreak. Students from these families typically enroll in graduate school immediately following their undergraduate degrees, meaning they don’t self-fund specialized studies through prior full-time jobs like many MBA students. Many of these Chinese students may need financing support arranged by business schools if they are to continue their studies, even in online degree programs that allow them to study without attendance on campus.

BSchools has already heard about a few, limited attempts to help these students. For example, Australia’s University of Melbourne extended a support package of roughly U.S. $5,000 to enrollees facing cash flow problems caused by the pandemic.

How Will On-Campus Programs Adapt to COVID-19?

One thing is for certain: As the debacle at Dartmouth’s Tuck School of Management demonstrates, no longer is the coronavirus on the way to the United States—it’s here.

But what’s not at all apparent is how the business schools that have so far resisted the overwhelming trend towards online management education—including those like Tuck, Wharton, and Stanford—plan to continue instruction while COVID-19 attacks their university communities. Consider this curious public relations language from Dartmouth’s news website:

Dartmouth is planning to hold spring term classes on campus. We are also preparing contingency plans to ensure business and learning continuity in the event that circumstances change unexpectedly.

By “learning continuity,” what does Dartmouth have in mind for the Tuck School? When public health officials order university buildings closed as they did a few days ago in Milan—and potentially shuttered during an extended emergency period because of COVID-19—how will on-campus business schools like Tuck adapt?

Will the coronavirus force them to at long last embrace online education?