The Downside and Upside of an Online MBA

The phrase "there is no reality, only perception" rings especially true in the job market, where the pre-conceived attitudes and opinions of hiring managers hold more weight than any bullet point on a resume.

That's certainly the case with online M.B.A. degrees, which are being offered by more and more institutions these days. With this in mind, we reached out to a group of executive and internal recruiters who work with master of business administration (MBA) candidates and asked them whether having an online degree is a disadvantage when searching for a job. After all, if a degree fails to open doors, is the education worth the investment?

Blue Chip Finance Companies Want the Big Name

While the reputation of online M.B.A. programs is gradually improving, these degrees don't yet have enough cache to attract companies filling the most sought-after positions, particularly in finance and consulting. Investment banks, hedge funds and other finance companies are only interested in candidates coming out of in-person M.B.A. programs offered by the top business schools, said Ross Baltic, managing partner at Mercury Partners, a New York-based executive search firm.

"If you are not coming from one of the top schools – the Whartons, the Columbias and the NYUs – that in and of itself can be challenging," he said. Holding an M.B.A. degree from an online program would only add to the concern, Baltic said. He doesn't see the perception of online M.B.A. programs in the finance sector changing any time soon.

Andy Hunter, co-founder of global advisory firm Ridgeway Partners, said it's generally assumed that the best and brightest don't seek their M.B.A. online. But once you move outside of the top 20 programs, the perceived difference between an online offering and one completed at a brick-and-mortar institution is negligible, said Hunter. At that point, it tends to be work experience and skill set that differentiates candidates.

Finance firms don't like online M.B.A. holders because they believe they haven't been screened as thoroughly as those who attend top brick-and-mortar institutions, said Suzi Criqui, managing partner at Criqui Borgersen Global Executive Search, a New York-based boutique firm specializing in the fixed income and equity markets.

"When people hire a Harvard or a Stanford M.B.A., they feel like the screening has been done for them," Criqui said. "With an online program, people feel like that screening is not necessarily there, so I don't think that the same amount of respect is given."

Top employers themselves are resoundingly silent on their views of online degrees. A media relations representative at global management consulting firm McKinsey & Company said the firm doesn't recruit people with M.B.A.s earned online. Ten large financial service companies declined to comment and a spokesperson for Ernst & Young said, "In considering our current pool of candidates and recent recruits, it does not align with the information you are seeking."

Now for the Good News

Outside finance and consulting, hiring managers hold a rosier view of online M.B.A. programs. Moreover, the perception of online degrees is gradually improving as they are offered by more institutions.

Online M.B.A. programs are "becoming more established, more accepted and more recognized," said Bill Driscoll, district president at Robert Half, who nonetheless acknowledges that M.B.A. degrees from traditional brick-and-mortar institutions still carry more weight.

With the next generation of hiring managers growing up online, the overall reputation of Web-based M.B.A. programs is improving, Driscoll said. While they might never be considered equal to traditional programs, online alternatives are viable options for candidates who can't afford to take two years off work.

Rodney Apple, president of SCM Talent Group in Atlanta, who has worked as a recruiting consultant at Coca-Cola, Home Depot and engine maker Cummins, sees the online option as a good way for candidates with strong work experience to move to the next level, especially when trying to advance at their current employer.

"I think the online degree checks that box, so to speak," he said. "It can get your foot in the door with larger corporations that have strict minimum requirements." Apple said he has yet to see a hiring manager negatively react to a candidate with an online M.B.A. degree as long as it comes from an accredited school.

Perceived Weaknesses

One of the biggest critiques of online M.B.A. programs is their inability to provide practice in the kind of interpersonal skills developed from traditional on-premise activities, such as study groups and team-oriented projects.

"The networking, the relationship building, the public presentations – many of those kinds of skills aren't going to be developed in online programs," Driscoll said.

The activities offered by on-premise business school programs can help mimic the corporate environment and make hiring managers feel more confident that a candidate is prepared to succeed, Criqui said.

Even more important is the inability to make real-world connections, Hunter said. A large part of the reason business school candidates devote two years to an M.B.A. program is for networking purposes, he added. It's difficult to "meet" the right people online.

Advice for Those Considering the Online Route

Most experts agree it's important to stay employed when enrolling in an online M.B.A. program. Most consider the degrees to be effective only when they supplement strong work experience. Going straight from receiving an undergraduate degree to enrolling in an online M.B.A. program would not be viewed favorably by most hiring managers.

For those working full-time and raising a family, online M.B.A. programs can be a terrific way for candidates to demonstrate their work ethic and their dedication to developing their skills, Driscoll said.

Will the Perception Ever Change?

Online M.B.A. programs are being offered at more well-respected colleges and universities each year. Indiana University's Kelley School of Business has offered an online M.B.A. program for a number of years, and in late 2010 the University of North Carolina's Kenan-Flagler Business School announced the addition of a Web-based alternative to its traditional M.B.A. program, albeit with mandatory in-person "immersion weekends" once per quarter.

Douglas Shackelford, associate dean of M.B.A.@UNC, said at the time of the launch that the university was looking to "shatter [the] perceptions about online education" through a mix of high-quality teaching and a stronger reliance on technology.

The initial class of students is expected to graduate next summer. It will be interesting to see if institutions like the Kenan-Flagler Business School can help change the perception of Web-based M.B.A. programs, and how many graduates' resumes actually feature the word "online."

Beginning in July 2012, the tuition for Kenan-Flagler's online program will be $91,225. IU's Kelley School of Business charges $1,145 per credit for its 51-credit online offering. Each business school is currently ranked in the top 20 by the majority of evaluators. The degrees can be completed in as soon as two years.

Write to Beecher Tuttle at Beecher.Tuttle@gmail.com