Full Time MBA versus Online MBA

March 31st, 2023: The First Weekly Sitrep for Paid Subscribers only.

One of the most frequently asked questions that I get from followers is “Can I do an online MBA and still get the same benefits as an in person MBA?”.

The short answer is no, the long answer is it depends on what you want to use the MBA for in your career.

Let’s dive into what makes a full time MBA so special and then we can talk about how an online MBA stacks up. I will also talk about when an online MBA is appropriate.

What makes the Full Time MBA special?

The Master’s Degree in Business Administration, or MBA, is a very flexible graduate degree that allows for specialization in a variety of disciplines such as Finance, Strategy, Technology, Marketing, Supply Chain and Operations. MBA grads are well versed in a variety of business-related disciplines, from accounting to management and everything in between.

A traditional MBA program is a full time 2 year on campus program. You go to school Monday through Thursday and generally have Fridays off for team projects, job recruiting and travel.

As an executive at Goldman Sachs once told me, “an MBA cleanses the sins of your career past”. Essentially, MBA programs allow you to switch careers and then go into a high paying corporate job at a young age. Corporations recruit MBAs for elite white collar jobs that often involve corporate strategy and put you on a path to rapid career advancement in the civilian marketplace. For transitioning military, you can expect to make more than a Battalion or Brigade Commander in your late 20’s to early 30’s. Check out this detailed salary report from my b-school alma mater Carnegie Mellon. Because of this huge salary increase and access to elite corporate jobs, admission to top MBA programs are extremely competitive. The admissions committee at each school evaluates a variety of factors, including GMAT/GRE, GPA, professional experience, undergrad institution, letters of recommendation and interviews.

Full Time 2 Year MBA programs are mostly structured the same with some slight differences. In general the first year is focused on common core classes, internship networking, recruiting and club activities. You do a PAID internship during the summer in between the first and second year. Internship recruiting is akin to full time job recruiting and requires intensive networking and interviews.

Very importantly….top ranked Full Time MBAs usually offer generous scholarships to admitted students to offset the cost of attendance. This is done for a variety of reasons.

1. MBA programs base their entire reputation around the rankings of their full time programs. This is what I call the “headline ranking” of a school. The metrics these schools are evaluated on for rankings include the admittance rate percentage, mean/median GMAT/GRE/GPA for admitted students, # years of work experience, job placement rates and starting salary upon graduation.

2. Because business schools base their rankings on full time programs, schools are incentivized to get the very best students possible and keep their admission rates as low as possible. It is extremely competitive to get into a full time MBA program, but once you’re in, they want you. All schools are fighting over the same pool of 700+ GMATs, and admitted students often have multiple competing admission offers. Enticing admitted applicants with generous scholarships to offset their cost of attendance is the key lever business schools pull to convert admitted applicants to students. 

3. Students with great stats also recruit well which is an important metric for b school rankings. Students with high GMATs recruit well, they get the best internships, the best full time offers and make that all important employment report shine.

So you might be wondering…where do schools get all that scholarship money to throw at students? Well the answer might surprise you. They get it from the other program formats (part time, executive, online) at the business school. These program formats are typically easier to get into than the full time program and do not offer scholarship money. It’s not entirely pay to play (they won’t let just anyone into these programs) but it’s still a lower admission standard than the full time program. 

Remember, B-schools do not base their reputation off the rankings of part time, online and executive programs.

So how does an Online MBA stack up?

Alright, here is the hot stuff. What everyone wants to know! Can you do an online MBA, work full time and still get all the benefits of a full time MBA?

It used to be the case that none of the top ranked MBA programs had online offerings. That has now changed. You can even get a “blended” online executive MBA from Wharton. Top ranked programs such as UNC Kenan Flagler, Carnegie Mellon's Tepper School, USC Marshall and Michigan Ross all have online options now. So if you want an online MBA from a top ranked brand name school, you can definitely get one.

According to the WSJ, “since 2009 the number of online M.B.A.s at accredited business schools in the U.S. more than doubled, according to the Association to Advance Collegiate Schools of Business. Many of the top business schools initially resisted, leaving remote learning to for-profit education outlets. But now more high-profile universities are joining the online-learning ranks.”

Why has this market for online MBAs exploded? The easiest explanation is that business schools see a significant demand signal for online business education and are simply trying to meet it. There are other factors like a covid induced shift to online education and/or market segmentation by business schools etc. But the driving factor is that business schools see an opportunity to make lots of money (and then use that money on scholarships for full time students, expensive faculty and new buildings!).

So should you get an online MBA?

You need to think very hard and carefully about how you will use that expensive brand name online MBA to advance your career. Here are the 6 factors you should consider in order of importance…