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Business schools' dilemma:
How to wire the ivory tower

Richard A. Cosier

The emergence of the Internet is the most important technological development in higher education since the introduction of the book, but to think that bits and bytes will replace business education as we know it is premature.

As powerful and wonderful as the new computer and Internet technology is and will be, it cannot take the place of what is at the center of any management theory and practice — the art of interacting with other people. Those of us engaged in educating the next generation of business leaders must remember the importance of face-to-face communication amid the e-education buzz all around us. But the buzz is getting louder. The question of how to wire the ivory tower appropriately is most pressing in MBA programs where the nation's top business schools are racing to put their "content" and "brands" online.

The long-running economic expansion, globalization and the growth of the Internet have increased the demand for MBAs. From 1992 to 1997, according to the International Association for Management Education, the number of management master's degree students rose 17 percent, while both undergraduate and doctoral enrollment declined. The number of international students in American MBA programs was up a stunning 61 percent in the same period.

Part of the virtual gold rush mentality for business schools has been competition from independent for-profit institutions, such as the University of Phoenix, offering MBAs online. The for-profit educational institutions, like their dot-com e-business counterparts, have, for now, only a small market share, 4 percent of MBAs, according to the International Association of Management Education.

The online programs are not the only competition traditional business schools face. A 1999 survey by Corporate University Xchange, Inc., a New York-based corporate education and research firm, reports a dramatic increase in corporations offering their own in-house business education. The number has grown to 1,600, including 40 percent of Fortune 500 companies, up from 400 in the early 1980s. "Assuming the current pace of growth," the survey projects, "the number of corporate universities will exceed the number of traditional universities by the year 2010, if not sooner."

The bottom line is that business education is experiencing a sea change both in delivery of knowledge and institutional structure.

In response to these new players in the game, the old big-name business schools, such as Columbia, Harvard, Dartmouth, Chicago, Stanford, Duke and the London School of Economics, have forged alliances with for-profit companies such as, Kaplan, University Access and Pensare to put their MBA programs online. Typically, the schools receive an equity stake and even a seat on the companies' boards. What final online educational form these alliances will take is yet to be seen, but the increasingly entrepreneurial B-schools are acting both to protect their franchises and to latch on to the promise and dollars of cyberspace education.

When Purdue University's Krannert School of Management began its distance-education MBA program in the mid 1980s, a clever computer systems fellow devised KR-mail, which was a modem bank and an 800 number for distance learning. The system was a homemade, rudimentary forerunner of the Internet and World Wide Web. It solved the problem of extending Purdue's reach from its campus home surrounded by cornfields to what has evolved into a healthy national and international executive-education student body.

The original designers of the Krannert School's two-year executive education program balanced the "online" home study with several two-week stints of campus-based classroom work, study groups and team projects. While technology has advanced and executive education at Purdue now includes Internet-based discussion groups, course Web sites and syllabi, the on-campus work continues to complement and give depth to the subsequent online work the students do.

Last year, the Krannert School of Management entered into a five-year, $27 million contract with a foundation made up of German business and government leaders to establish an American-style MBA program in Hanover, in the province of Lower Saxony. And while the Krannert School has built upon the engineering and science reputation of Purdue and is recognized as a leading "techno MBA" program, there was never a question that our faculty had to be personally involved in the German International School of Management and Administration to make the venture an educational success.

While preparing international groups of professional managers in Germany in the years ahead, our faculty and West Lafayette students will have the opportunity to interact directly with different people and different business models. Make no mistake about it: we are embedding information technology in the curriculum of both our on-campus and executive MBA programs in Hannover. But what an opportunity we would have missed had we left out face-to-face interaction, both in the classroom and informally in the hallways. It is hard to imagine graduates from a totally Internet-based program who will fondly remember and seek advice from classmates and professors whom they knew only in a chatroom several years earlier.

Looking toward the future, Krannert computer and systems experts are working with the university's computer center and library on the infrastructure of the next generation of technology, including videoconferencing and virtual classrooms. There are, however, no plans to eliminate or lessen the length of the executive master's degree students' stays on campus here and at our cooperative programs with the Business School of Tilburg University in the Netherlands and the Budapest University of Economic Sciences in Hungary. The faculty insists that the interaction with students is just too vital and not replaceable solely by Internet communication.

Equally important educationally is the students' participation in group projects, necessitating motivating and negotiating with people from different businesses, industries, nations and cultures. In other words, the environment is a great deal like that of the contemporary global business world, where dealing face-to-face with difference is often the line that divides success and failure.

The challenge for business schools, particularly those involved or planning to be involved in distance education, is to integrate information technology seamlessly and thoughtfully into our curricula both conceptually and in the practical, case-study work our students do. Finally, the marketplace will vote with its eyeballs and its feet on what combinations of online and on-campus education provide the best values.

Richard Cosier is dean of Purdue University's Krannert School of Management

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