Executive Education

Online Education's New Campus: Thunderbird


Online education has been gathering momentum for some time. Enrollment in for-profit degree programs is growing, and the response in academia signals growing acceptance of an educational format once considered a poor substitute for classroom-based learning. Now a well-regarded business school is planning an ambitious online venture that represents a new model for online education.

The Thunderbird School of Global Management (Thunderbird Full-Time MBA Profile) intends to announce its plans in the coming months, says President Ángel Cabrera. Details are sketchy, but Cabrera says Thunderbird is setting the foundation for "a commercial venture on the professional training side that will provide nondegree programs around the world through an online format."

After hundreds of years educating people more or less the same way—via a teacher in front of a class—online courses are the wave of the future, says Cabrera, who adds that his school doesn't want to be left out. Of the 4,160 U.S. colleges and universities surveyed by the National Center for Education Statistics, 66 percent offered college-level distance-education programs in the 2006-07 academic year, the most recent year for which information is available.

Years of Web and Satellite Offerings

"It's a tsunami in the industry and what you've seen happen with the media moving to the Internet is coming to education," says Cabrera. "It's a [trend] that you can ignore at your own peril."

Thunderbird already has some experience with online education. Since 2006, it has offered a Global MBA on Demand. The program is 19 months long and 75 percent of the course work is delivered online, with four one-week on-site seminars in the U.S. and around the world. Since 1998, Thunderbird has also offered live satellite courses to students in learning facilities throughout Latin America. Combined, the two programs have about 500 students enrolled.

What makes the new venture different is that it would be one of the first educational partnerships—perhaps the first—between an independent nonprofit business school and private capital. As Cabrera envisions it, the partnership would allow Thunderbird to retain control over the educational experience, including curriculum and faculty, and make use of Thunderbird's strengths in international business education.

Competition and Congressional Scrutiny

At the same time, access to private capital would allow the venture to scale up quickly to reach students around the world. At first, Cabrera says, the partnership will offer nondegree executive-education programs online. At some point it may become a platform for Thunderbird degree programs as well, he says. Several partnership deals have been considered, with negotiations still in the early stages, he says, declining to identify any potential partners. The school hopes to announce a partnership before the end of its fiscal year on June 30.

While Thunderbird's plans are ambitious, it has some difficult realities to deal with. Among them: a regulatory environment that has turned suddenly hostile toward for-profit online educational providers—which now face Congressional scrutiny for sales tactics, use of government funds, and program quality—and a crowded local marketplace for online education.

Based in Glendale, Ariz., Thunderbird operates at ground zero for the U.S. online education industry. Arizona State University in Tempe offers nearly 50 online degree programs while the private, for-profit Grand Canyon University and the University of Phoenix, a subsidiary of the Apollo Group (APOL), both operate out of Phoenix.

As of Aug. 31, enrollment at the University of Phoenix was 470,800, according to Apollo Group's 2010 annual report. In 1998, the school had just 3,000 students enrolled in its online programs, says Brian Mueller, formerly chief operating officer and senior vice-president of the University of Phoenix online campus and now chief executive officer of Grand Canyon University.

"There's No Saturation in the Market"

Notwithstanding phenomenal growth, Brian Lindquist, associate vice-president of academic affairs and dean of the business school at University of Phoenix, maintains that online educational programs are still in growth mode. He says there's plenty of room for Thunderbird.

"There's no saturation in the market," he says. "This is a recognition of needing to be flexible and offer options for your learners."

Mueller agrees. "The challenge is not so much the competition," he said. "The challenge is figuring out where the economy is moving, where the jobs will be, and how to design academic programs for those jobs. If we keep focusing on that, there will be room for all of us."

For his part, Cabrera says he believes that Thunderbird's strengths as a bastion of international business education will play well online.

"You can deliver the true Thunderbird experience in a dynamic way [online]," he says. "It's opening up the minds of the community."

Francesca_dimeglio
Di Meglio is a reporter for Businessweek.com in Fort Lee, N.J.

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