Online MBA programs and the threat of disruptive innovation

• Disruptive innovations theory is applicable to the emerging fully online MBA market.
• AACSB-accredited MBA programs generally fit the theory's mold of using online technology to sustain leading positions.
• Otherwise accredited programs generally fit the theory's mold, being somewhat “worse”.
• Otherwise accredited programs are innovating in ways that may threaten leaders.

Online MBA programs are examined through the lens of disruptive innovation theory. Disruptive innovations appear at first to be inferior to the level acceptable to the consumers of the products offered by incumbents, targeting an audience ignored by the latter; as they improve, challengers can challenge market share. Using data from the 2011–2012 US News and World Report survey of online MBA programs, this paper evaluates the extent to which this model applies to online MBA programs offered by institutions accredited by the Association to Advance Collegiate Schools of Business (AACSB) (incumbents), and those offered by MBA programmes with other accreditation (challengers). Many significant differences are found, in areas such as acceptance rates, target audiences of potential students, pricing, faculty, class sizes, and support services. These differences indeed cast the incumbents and challengers in the roles outlined by the disruptive innovations theory, indicating that incumbents may be at risk of disruption.