Starting in the third quarter, GM will pay for 88,000 salaried workers to get master of business administration degrees and take other management-oriented courses online through one of the largest e-learning initiatives of its kind, the company announced Wednesday.
The world's largest manufacturing corporation will partner with online-education company UNext to offer a full suite of courses for an e-MBA, as well as noncredited, "lifelong learning" classes in fields such as accounting methods and online marketing. As part of the deal, GM will be able to purchase outstanding warrants in privately held UNext, but neither company would disclose financial details.
Participating employees will log into online classrooms through a link on General Motors University (GMU), one of the largest universities for professional, supervisory and salaried employees. The classes will be tied to UNext's Cardean University, which offers business courses developed in conjunction with top-ranking business schools at Columbia University, Stanford University, the University of Chicago, Carnegie Mellon University and the London School of Economics and Political Science.
Cardean University, a wholly owned subsidiary of Deerfield, Ill.-based UNext, is accredited and authorized to grant degrees.
GM estimates that the program will cut $4 million per year in travel and tuition costs from the automaker's annual budget for management education, which now exceeds $25 million per year. Those figures do not include the opportunity cost of workers who have to relocate or take time off the job in order to attend lectures in a physical classroom far from their homes and families.
GM employees who take courses must first discuss the course work and potential career paths with a supervisor. The employee must complete all courses within a certain time window to avoid a drawn-out, 5-year or more ordeal that many professionals run into when pursing a part-time MBA. Roughly 45 percent of GM's North American work force has a bachelor's degree, and 25 percent have advanced degrees, primarily MBAs and engineering degrees.
Last year, about 4,000 GM managers in North America were enrolled in degree programs with tuition reimbursement from GM, including 2,000 people pursuing advanced degrees. GM expects to enroll about 400 people in the new e-MBA program in the first year, and about 200 additional people will take courses through the e-learning program that do not lead to a secondary degree.
Distance learning inevitable
Although the pilot program is initially only available to salaried workers looking to advance to executive positions, GM may expand the program or create spin-off programs for its work force of 386,000 people around the world. If GM decides to formalize the program, it needs approval from the United Auto Workers and the UAW-GM Joint Center for Human Resources.
"Our aspirations are not focused on IT training at this time...with courses on how to read a balance sheet, modern corporate finance, e-marketing, et cetera," said Daniel S. Ramelli, president of GMU. "On the other hand...we are convinced that education can be efficacious to all people in the organization."
GM's program comes at a time of rapid growth for the online learning industry, which is expected to grow from $6.3 billion in 2001 to more than $23 billion in 2004, according to International Data Corporation. The projected growth is directly tied to the explosion in e-business and the growing demand for continued professional development--and it's received a boost recently as demand for MBAs soars.
"The truth of the matter is that distance learning is the freight train that's coming down the track. It's inevitable," said Meyer Feldberg, dean of the Columbia Business School, which participates in Cardean University and will help shape the GM project.
But online learning has many obstacles to surmount before it achieves mainstream acceptance. Perhaps the most formidable issue is improving the brand identity and reputations of the institutions that provide the service--scorned by many students and professors at four-year universities as "McEducation."
"There is considerable debate over whether job candidates with online degrees are as qualified as those who lug briefcases full of books across a real campus," according to a critical editorial in the February issue of Workforce magazine.
"Competencies that online graduates typically demonstrate are technical skills, discipline, motivation, good writing skills, the ability to work independently, and a high degree of comfort with the Internet. But in today's highly collaborative workplace, where joint decisions have to be made quickly, the best-prepared applicants might still be those who have acquired their abilities through traditional classroom programs."
GM executives dismissed concerns over the academic and social differences between online and classroom courses, concentrating instead on the flexibility of online education. "It's a 24-by-7 learning experience, not based on a rigid corporate calendar," Ramelli said.
UNext founder Andy Rosenfield said the GM project will attempt to fix one of the biggest deficits of online education: the relatively antisocial, boring nature of course work presented over a computer screen to a solitary student.
"One of the problems is that it's been quite pedestrian, much like a film strip, and uninspirational," Rosenfield said of existing e-learning initiatives. "We hope that by making the classes interactive, collaborative, we will make it stimulating. It doesn't mean education will be fun--it will always be work. But the student will find the situation much more comfortable and rewarding."