On the Future of Business Education

This was produced by Mike Lenox during his service as interim dean of the University of Virginia Darden School of Business in 2026. The materials reflect key themes, moments and messages from that period of School leadership and are preserved here for reference.

Barely a day goes by that the demise of business education, in particular the MBA, is not heralded in the press. Artificial intelligence, shifting labor markets, a demographic cliff, deglobalization, exorbitant tuition and frustrations with higher education all portend a coming shakeout, if not collapse, in the MBA market. Well, to borrow from Mark Twain, I am here to say that the reported death of the MBA is greatly exaggerated. Quite the opposite. The MBA has proven to be an incredibly resilient degree over the years. Various specialty graduate master’s business programs come and go, ebb and flow, but the MBA remains. The MBA continues to be an opportunity to pivot from a current job, a gateway to specific career trajectories and a time to develop general integrative skills that last a lifetime.

This may be a surprising point of view for someone who studies disruption as a scholar. We tend to see disruption everywhere. And don’t get me wrong, I do believe that we are in the midst of a technology-driven disruption in higher education, broadly, and in business education, specifically. The combination of AI and distance learning is creating opportunities for customizable, scalable, asynchronous online degree programs. Historically, business schools were constrained by how many people they could fit into a room. The largest residential MBA programs barely register in terms of overall market share. However, it is now possible to launch a fully asynchronous online MBA program that leverages AI to customize materials and assessments to individual learning. Once a school recognizes that it can train 100,000 students using technology, why not 1 million or 10 million?

It is possible to achieve what I call the “Toyota position” — an inexpensive yet high-quality degree that can be delivered at scale. An increasing number of established business schools are going after that “Toyota position,” launching inexpensive online MBA programs and jettisoning expensive, underperforming residential MBA programs. A shakeout will most definitely occur as successful online programs grow, capturing economies of scale and grabbing market share. I guess that there will be a small handful of very large online MBA programs left standing.

Does this mean the end of the residential MBA? Don’t count on it. As the “Toyota position” emerges, there will be students willing to pay a premium for a robust, selective residential experience. Employers will be clamoring to secure the services of these students. The price tag will be very high, probably even higher than today, but the return on investment will be justified. Of course, this is in many ways as it always has been. The difference will be the potential spread in tuition for the scaled online MBA versus the selective residential MBA. In the same way that Kia sells far more cars than Rolls-Royce, at a certain price point, many students will choose an inexpensive online degree over an arguably superior but more expensive residential program.

At Darden, we are clear about the market position we compete in. We are doubling down on the robust residential MBA. We provide the world’s best education experience, driven by student-centered learning, the world’s best faculty, and the most engaging community among MBA programs. The Darden magic happens when people gather to discuss a business decision, share their analysis and recommendations, and debate others’ points, both in the classroom and beyond. That is not to say that we don’t leverage technology to deliver a better experience. We embrace AI. We record video lectures. We use simulations and other experiential methods. We use web conferencing to bring us together on occasion. What we don’t do is offer a scalable asynchronous online MBA. We leave that to others better positioned to do so.

I believe there will be a significant shakeout in higher education and business schools. There will be a handful of schools that build true scale by leveraging technology — the Toyotas of MBA programs. There will also be a handful of schools that will continue to offer a high-end differentiated experience to high performers. How many schools, exactly? I am not sure, but I would not want to be a mid-tier business school at the moment. As some of the other pressures I mentioned, such as demographic shifts, play out over time, we are going to see an increasing number of MBA programs close, unable to be a quality-scale provider or a high-end, differentiated player.

At Darden, we feel good about our prospects. Like most markets, there are multiple viable competitive positions. The key to strategy is to be clear on which position you are going for and why you think you can achieve it. By staying true to our values and investing in our competitive differentiation centered on the learning experience, we continue to attract incredibly talented and motivated students seeking the unique value we provide. Employers seek our students because they are well-trained, hard-working and values-oriented. We are effective at developing judgment that is oh-so-critical in the age of AI. And by doing so, we can create lifelong value for our students that goes beyond the next job. The future is scary, but the future is bright.