Electronic revolution fuels demand for new courses

When the Massachusetts Institute of Technology's (MIT) Sloan School of Management failed to make enough places available for its electronic commerce course this year there was a near-riot.

Or so says Mr Rob Bailey, a 27-year-old graduate of MIT who is now an Internet consultant in San Francisco. "In spring last year, the course had capacity for about 70 people, and they barely filled it. But this year there were more people on the waiting list than places."

Mr Bailey was involved with other students in a campaign to increase the capacity of the course.

"Two years ago, taking a course in e-commerce was seen as something out of the mainstream. Now it is seen as mandatory. We organised a campaign to allow us to concentrate more on e-commerce, and to create a community of people around it," he says.

The campaign, coupled with the huge demand for the course, prompted MIT to introduce an e-commerce and marketing Track - a specialist concentration in the subject - this autumn. On graduation, students will receive a certificate in e-commerce with their MBA.

MIT is not alone in catching the e-commerce bug. Vanderbilt University has pioneered a specialism in e-commerce. Carnegie Mellon University in Pittsburg offers a one-year masters of science in e-commerce. Loyola University in Chicago plans to offer two new e-commerce-related degree programmes.

Last month, the Darden Graduate School of Business Administration, at the University of Virginia, announced plans to offer e-commerce courses not only to students, but to businesses as well. It now offers a specially designed three-day course to employees of PricewaterhouseCoopers.

There are a number of reasons behind the growth of specialist e-commerce courses.

For some of the less established business schools, there are sound commercial reasons. For them, e-commerce is becoming a crucial differentiator in their battle to woo students.

Polytechnic University in Brooklyn, New York, is typical. Last month it announced plans for a new electronic business concentration in its master of sciences management programme.

Mr Mel Horwitch, chair of the department, says: "We decided to focus all our programmes around a niche strategy. We are focusing everything around information management, technology management, innovation management and e-business, to differentiate ourselves. It is the area where we can be most effective, rather than as a general management school."

The strategy appears to be working. Already, enrolments are 40 per cent ahead of last year.

"E-commerce caught the traditional business schools by surprise, in a way very similar to how traditional financial companies were caught out," he adds, explaining that it is hard for them to adapt quickly their culture.

The pervasiveness of e-commerce in business is another driver behind the courses.

"E-commerce is more mainstream. In the past year, Fortune 500 companies have started to take it more seriously and want to hire our students," says Mr Erik Brynjolfsson at MIT.

His colleague, Mr Nader Tavassoli, also dismissed accusations that the courses were a fad. "It's not like the re-engineering phase."

But putting the new course together has not been easy. "We found that some of the traditional courses were starting to use e-commerce cases. If you have an e-commerce course, we want to be using the best material. So we are finding some tensions."

There are also tensions in terms of the direction of the course. "A lot of students in the new Track want to set up their own companies, but I try to steer them back to the entrepreneurs' course as the best way to brand and prepare themselves," says Prof Tavassoli.

The other pressure is from consulting companies, eager to get friendly with the elite band of MBAs and lure them into future jobs. "The consulting firms are going crazy and want to help run our courses and get into the Sloan School to grab the entire class."

MIT says it has companies queuing up to spend $300,000 (€283,286) a year for the next three years to become a founding member of its new electronic business centre.

However, not all business schools are convinced that having a separate, stand-alone concentration, makes sense.

Mr David Norburn, director of Imperial College management school in London, says: "It is not hard to bring together three to 10 hours' worth of discussions. It is easy to invite people in to tell a whole series of e-commerce war stories. What is harder is developing 120 hours of material.

"I don't want to sound fuddyduddy, but it needs to be empirical. We do not have that knowledge base yet."

The school is bringing together materials for a course, which is still 12 months away. "I don't think there is any UK university with a good specialisation in e-commerce right now," he says.

Nor have more established business schools, such as Harvard and Stanford, joined the race to introduce e-commerce to their MBA programmes.

"I think e-commerce is like global management in that it is not a separate subject matter but an issue that affects every company. In time, it ought to be integrated and pervasive in the curriculum instead of a discrete subject," says Mr Garth Saloner, professor of strategic management and economics at Stanford Business School.

He does not think that e-commerce raises fundamentally new conceptual issues. "What's novel is the application of old concepts in a new context."

Mr Carl Kester, chairman of the MBA programme at Harvard Business School, says he has witnessed rapid growth in the number of students who are conducting independent field studies on real e-commerce strategies and issues. "This reflects the pressures of demand cresting ahead of our ability to generate meaningful courses."

Despite this, the school does not "have any concentration in our set curriculum on the Internet or e-commerce". Just one of about 50 elective courses is related to the Internet - the obscurely titled "managing market-space businesses".

Instead, related content "is bleeding through the whole elective curriculum. This is a very emergent field instead of there being a theory about e-commerce. It is not a functional field like marketing or finance which have a huge body of literature. Students still need to utilise some principles which come out of traditional topic areas", says Prof Kester.

He also rejects the notion that Harvard is losing out as students opt to set up their own businesses, rather than spend two years - light years in Internet time - on an MBA.

"We have seen a number of applications from students who have started their own e-commerce businesses which have either been wound up or the students made a healthy go but their business had not got off the ground. They realise they need more in the way of management skills," he says.

For Prof Kester, as for these students, this confirms that knowledge makes money. "If you want to hit the cash register, you need to know something about raising equity finance which means you need to understand capital markets. It takes you back to the dull stuff. You still need general management skills, instead of just a narrow penetration of one field," he says.