Evaluating the Strategic and Leadership Challenges of MOOCs

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Evaluating the Strategic and Leadership Challenges of MOOCs
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MERLOT Journal of Online Learning and Teaching Vol. 9, No. 2, June 2013
216
Evaluating the Strategic and Leadership Challenges of MOOCs
Stephen J. Marshall
Centre for Academic Development
Victoria University of Wellington
Wellington NEW ZEALAND
[e-mail]
Abstract
This paper presents an analysis of the strategic and leadership issues presented by the
range of massive open online courses (MOOCs) and associated activities happening
internationally. The analysis is framed by Porter's Five Forces and outlines a framework
for use by institutional leaders and strategic planners exploring specific strategic and
operational responses relevant to their particular institutional, social, national, and
international contexts.
Keywords: massive open online course (MOOC), institutional strategy, Porter's Five
Forces, open education
Introduction
Massive open online courses (MOOCs) have stimulated an international burst of activity examining the
role technology plays in higher education (ACM Education Board / Council, 2013; Armstrong, 2012;
Azevedo, 2012; Carr, 2012; Daniel, 2012; Feldstein, 2012; Kop, 2011; Siemens, 2012). The various
magazine articles, publicity announcements, blog posts, and research papers, typified by the assertion
that MOOCs "are the most important education technology in 200 years" (Regalado, 2012) are
reminiscent of the millennial "global virtual university" hysteria (see, for example, Cunningham et al.,
2000). While MOOCs are very unlikely to radically transform higher education, the attention being paid to
the technology and the broader issues of the cost of and access to higher education provide a strategic
opportunity for institutions and their leaders (Armstrong, 2012; Carr, 2012). Interestingly, there is some
evidence that MOOCs are being explored most predominantly by large research institutions with no
current online offerings, suggesting that it is being used as a strategic tool to explore alternative models of
course delivery (Allen & Seaman, 2013).
MOOCs offer the opportunity to explore models of pedagogy with fresh eyes. The two main types of
MOOCs focus on the knowledge to be learned (xMOOCs) and on the student as a member of a
community of learners (connectivist or cMOOCs). Both are quite different starting points for education that
contrast with the focus on the teacher or faculty member that typifies higher education. MOOCs are
actual courses designed and supported by experts in the topic and intended to be taken by cohorts of
students. In this, they differ from the myriad of MOOC-like educational media found on the Internet and
from the resources commonly used as textbooks (Young, 2013).
MOOCs have features that are both attractive and threatening. The attraction comes from the promise of
a large scale and very cheap course delivery arising from technological support of abundance (Batson,
Paharia, & Kumar, 2008), as well as a sense that technology could deliver finally some of the potential it
has promised for higher education over decades. The threat is the likelihood of competition and
disruption. MOOCs threaten a degradation in the values of higher education, a proliferation of large scale
experiences delivered by consortia or institutions internationally and without an awareness of the local
students, cultures, values, or needs.
The open nature of MOOCs forces a consideration of the intellectual ownership models underpinning
modern education (Ehlers, 2011; Stallman, 2002; United Nations Educational, Scientific and Cultural
Organization [UNESCO], 2012). Many institutions are seeking ways of diversifying their revenue streams.
MOOCs imply different economic models for education, with MOOCs that use completely free licenses
(such as OERu, the Open Educational Resource university) and those which have business models
driven by monetization strategies other than up-front fees (e.g., Udacity and Coursera), although there is

MERLOT Journal of Online Learning and Teaching Vol. 9, No. 2, June 2013
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significant concern about the viability of the models proposed to date (Allen & Seaman, 2013; Young,
2012b).
MOOCs raise structural questions about education. The most prominent MOOCs exist within
collaborations and while many of these are exclusive in their membership, commercial organizations such
as Pearson Education, Instructure, and Blackboard are offering online environments capable of
supporting institutional MOOC initiatives (Azevedo, 2012; Feldstein, 2012). These vendors are clearly
positioning themselves in a new educational landscape, moving from a model of passive partnership and
content provision to a more active participation in the educational process, including that of accreditation.
MOOCs commonly embody a sense of democratic and free access to education, a developmental
agenda, and the philosophy that educational opportunities should not be limited to a privileged few. The
implication is that students from diverse backgrounds can equally use these opportunities, something that
glosses over the wide diversity in languages, educational backgrounds, social and cultural norms, and
abilities that exist in the global population (Kop, 2011).
This focus on structures and longer-term strategies is distinct from discussions of other educational
technologies cast in the mold of innovation. The narrative of disruptive innovation and the call for
transformative change stimulated and sustained by new technologies is well established in many contexts
including education (Christensen, Anthony, & Roth, 2004; Christensen, Horn, & Johnson, 2008). This
paper is positioned within the context of a potential disruption, but rather than advocating a revolutionary
disruption it is instead intended to focus on the role of strategy as a form of sensemaking (Weick,
Sutcliffe, & Obstfield, 2005). The next section outlines a model of strategic analysis developed by Porter
(1985, 2008) contextualizing it within the MOOC space and then applies it to two representative case
studies as an illustration of its utility.
Applying Porter's Five Forces to the Strategic Question of MOOCs
Porter's (1985, 2008) Five Forces model supports a strategic analysis of the interactions between
organizations, and the structures that frame their relative success and positions within that structure. The
model frames strategic analysis of the structure of any domain using the eponymous five forces (Figure
1). Complementing these forces are other factors that need to be considered, such as industry growth,
technology and innovation, and the relationship with other sectors including employers. Most particularly
in the case of higher education, there is also the role that governments and accrediting bodies play.
Figure 1. Porter's Five Forces (Porter, 2008)

MERLOT Journal of Online Learning and Teaching Vol. 9, No. 2, June 2013
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The Threat of Substitute Products or Services
Porter's "threat of substitute products or services" encapsulates the strategic challenge posed by
MOOCs. Substitutes offer attractive price-performance outcomes and are easy to switch to from the
established product. MOOCs are characterized as free (although they do have substantial opportunity
costs if students engage seriously with the courses and use the collaboration and interaction facilities
actively) and are very easy to enroll into and commence study. Substitution can be seen in terms of
Christensen's model of new market and low-end disruptive innovation (Christensen et al., 2004). MOOCs
are clearly a form of low-end disruption where virtually all of the added value and support of a formal
education as well as the resulting high-quality qualification are discarded and the focus placed entirely on
learning. Barriers to MOOC substitution include the utility ('performance' in Porter's terminology) of the
resulting education, certificate, or qualification that almost certainly will be influenced by the common
perception that free goods have no value.
Threat of New Entrants
"New entrants" to any industry, Porter's second force, bring new and different capabilities and are
energized to compete with established organizations. Often they can draw upon success in other
domains to access resources unavailable to the existing organizations. The lack of previous involvement
in the new domain means that new entrants are not encumbered by investment (financially or
psychologically) in old approaches and potentially they are better positioned to question established
wisdom and assumptions that may no longer hold.
The likelihood of appearance of new entrants is a function of the barriers to entry. Higher education has
traditionally used the processes of accreditation as a substantial entry barrier; however, its fundamental
weakness is its dependence on societal acceptance that accredited institutions are substantially better
than unaccredited ones. New entrants such as Pearson Education are demonstrating that they can
provide a credible assurance of the achievement of students in non-accredited contexts such as MOOCs
(Mary@Udacity, 2012).
An advantage of a strategy of charging for quality assurance and validation, rather than for education
itself, is the ability to manage and control the outcomes. Latterly, for-profit education providers have been
under close scrutiny for the quality of their programs and the value that they provide (Tierney &
Hentschke, 2007). There is also the problem of plagiarism and fraud in online courses with the risk that
this can taint the reputation of a provider and qualification (Council for Higher Education Accreditation &
UNESCO, 2009; Wukman, 2012; Young, 2012a). There are clear models of the types of problems likely
to be encountered apparent in the ways online game environments are manipulated by activities such as
"gold farming" (Heeks, 2010), where commercial markets develop for outsourcing key tasks at the
individual level, such as contributing to forums or completing assessment activities. These issues are
avoided by placing the responsibility of becoming educated onto the student.
The strategic question for an existing provider is their response to these new entrants. Acceptance for
transfer credit of the assurance statements of organizations like Pearson is already being implemented by
some institutions (Mary@Udacity, 2012; Young, 2012c) as is the development of processes for validating
work done through MOOCs outside the control of the institution (De Santis, 2012; Kolowich, 2013). The
recognition of prior learning, long a challenging space for institutions (Harris, Breier, & Wihak, 2011), is
likely now to become a more closely studied process, with the additional strategic risk that unjustified
barriers erected as a form of educational protectionism are unlikely to be politically or socially sustainable.
Potentially significant barriers to new entrants are the incumbent institution's access to a substantial
resource of expert pedagogical and subject knowledge in the form of the staff of institutions, along with
legal advantages in copyright laws permitting the use of third party owned content by formally established
educational institutions.
Institutions may find that their own staff are themselves new entrants, limiting the value of the first barrier.
Non-tenured adjunct or contract staff working for incumbent institutions are a rich potential source of
personnel and expertise for new entrants, and have no contractual loyalties to current employers.
Tenured faculty have already been offering MOOCs of one type or another completely independently of
any formal institution.
The legal and copyright issues raised by MOOCs are significant. The laws regarding educational use of
third-party content vary dramatically from country to country. Individuals and institutions engaging in the