It’s Monday evening in Roberto Garcia’s class on international competitive strategy at Indiana University’s Kelley School of Business. Sixteen students listen as he launches a discussion about a case study the students were assigned to write about.

“Did you think this case was realistic or not?” Garcia asks.

“Realistic,” reply many of the students.

“In what way?”

“It was stressful,” says one.

“What was stressful?”

“Seeing it through the eyes of [the main case study character],” the student replies. “That’s the value of a case like this,” says Garcia.

Garcia and his students are miles apart, conversing online over Adobe Connect. He sits at a desk in Bloomington, Ind., student Kyle Griffin joins from Houston, David Brunone from Baltimore, Robson Fonte from Sao Paolo, Brazil. A streaming video of Garcia dominates the middle of the screen. Left of that, a list displays the names of students in attendence. The professor’s discussion questions show up at the top right. A chat box scrolls away as students type comments and questions.

It only faintly resembles in-the-flesh teaching. Garcia can’t look at his class to see whether they’re bored or confused. But if the stream of remarks rolling into the chat box is any guide, they’re keeping up with the conversation. There are no dead silences, the bane of any instructor trying to spark a classroom debate.

Increasingly, this is how people get degrees. A third of all college students are enrolled in at least one online course, up from less than 10 percent in 2002. Seventy percent of colleges now say online education drives their long-term growth strategies. And, where for-profit universities once dominated online MBA programs, now highly rated business schools like Kelley and the University of North Carolina’s Kenan-Flagler Business School offer them.

Still, many employers remain unconvinced that online degrees measure up.

Moving from Classroom to Screen

Forget cookie-cutter lectures delivered to audiences of thousands. Most of today’s online MBA programs share little in common with massive online open courses (MOOCs), which have been criticized for their easy entry requirements and high dropout rates. Quality, web-based programs limit class sizes to about 30, says David Lindsay, dean of the business school at California State University, Stanislaus, which offers an online MBA. At the Ageno School of Business, part of the nonprofit Golden Gate University in San Francisco, administrators actually keep class sizes smaller for online than on-campus courses, says Paul Fouts, the school’s dean.

That’s because online sessions demand more of professors. To keep attracting students, they have to be available for questions every day of the week. “In an online course, if professors don’t respond within 24 hours, students give up,” Fouts says.

Seventy percent of schools that offer online MBAs are traditional brick-and-mortar universities, and they want to make the online experience match what students get on campus, says Vicky Phillips of geteducated.com, a consumer guide to online colleges. At the Kelley School, Ageno and Cal State Stanislaus, students use the same textbooks, have the same professors, get the same assignments and tests, and are subject to the same admissions requirements as on-campus students. Lindsay says it costs Cal State Stanislaus about the same to offer its online MBA as it does its on-campus version, when fixed costs like buildings and the investment in program launch are excluded.

All of that may account for the similar learning outcomes reported for online and on-campus MBA students. In a 2010 study of 2,000 students taking MBA courses, researchers at three universities reported that “no significant differences are found in student success rates” between the online and in-person groups. Geteducated.com made the same conclusion in 2001 when it studied the topic.

Expanding the MBA Market

Academic institutions save little if any money implementing these programs, though online programs do widen their reach, pulling in working students whose outside commitments would otherwise make school attendance impossible. In a June 2013 survey of 1,500 students in online degree programs, only 30 percent reported that they would have enrolled in college if an online program had not been available. Marketing to adults is one way colleges plan to stay afloat at a time when higher education enrollment is trending down.

An online MBA is the perfect fit for 27-year-old Ben Golata of Vacaville. An Air Force pilot, Golata flies a refueling tanker and never knows when he’s next going to be deployed. After he leaves the service, he’d like to get a job in aviation consulting. He thinks an MBA will help him get there and wants to be ready to jump into his next career as soon as he finishes his service. But he’s sometimes required to fly halfway around the world at a moment’s notice, so a brick-and-mortar program isn’t an option, he says.

He was skeptical of the online MBA at first. “I wanted to make sure it actually meant something,” he says. But he talked to former students, shopped around and settled on Indiana’s Kelley School of Business. It’s costing him about $60,000, and if all goes well, he’ll graduate in February.

And in an interesting twist, Golata has actually found it easier to make connections online than in person. “LinkedIn and Facebook are right there, so you can connect with [fellow students] while you’re talking remotely,” he says. And many schools require students to spend some time on campus. With Kelley, they come to Bloomington for a 1-week course at the beginning of each year. The school also holds networking events around the country and helps students set up local gatherings with classmates, says Terrill Cosgray, director of Kelley’s online programs. At Golden Gate University in San Francisco, some hybrid courses require students to be on campus every other week.

The Toughest Sell: Hiring Managers

Golata can’t say how future employers will react to an online degree. On his resume, his MBA will read like one earned on campus.

But employers who dig further could be skeptical. In the Society for Human Resource Management’s latest survey (2010) of 450 human resource professionals, only one-third said they viewed job candidates with online degrees as favorably as those with traditional ones. In a January 2013 report by the College Board, 40 percent of academic leaders surveyed reported that a lack of acceptance of online degrees by potential employers remains a barrier to the spread of online learning. And a survey this spring of graduate students who had completed online degree programs found that 54 percent had experienced no change in employment status since obtaining their master’s.

But hiring managers may be getting it wrong. Phillips says they make the mistake of lumping all online degrees with prolific, for-profit “degree mills.” (She once was able to buy a $500 MBA for her dog from one such school.) In reality, two-thirds of students who enroll in online college courses do so at nonprofit schools, according to the June 2013 market research survey.

Those who want an online degree might avoid future employer skepticism by choosing wisely. Phillips says three school characteristics make employers more likely to question the quality and value of an online degree: lack of regional accreditation, no physical campus and a location more than 300 miles from where the applicant lives. That is, they’re unfamiliar to employers.  

The On-Campus Degree Isn’t Dead (Yet)

Still, online coursework doesn’t fit everyone. “If you’re not self-directed and self-motivated, then online is not for you. Successful online students don’t need a lot of hand-holding,” says George Lorenzo, author of The Complete Idiot’s Guide to Getting Your MBA Online. Indeed, the College Board survey found almost 90 percent of academic leaders cited discipline as a problem among online students. And Cosgray says that students getting into an MBA from a dramatically different field — say computer programming — may find online tough because they can benefit from more in-person support.

The variety of learning styles also means that the traditional MBA won’t go extinct, says Cal State Stanislaus’ Katrina Kidd, who directs the school’s online MBA program. “Many students prefer face-to-face instruction,” she says. “Depending on whether they prefer to learn visually, audibly or hands-on, a traditional or executive MBA program may be a better choice.”

But the work world is changing, and online programs may more closely match the experience of collaborating in teams scattered around the world. Cosgray says some students living in Kelley’s service area actually choose its online MBA because they want to get better at virtual communication. That means that as production lines continue to spread around the globe, employer perceptions of online education may well flip.

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