MOOCs and Economies of Scale

It should be obvious to all the MOOCs offer an economies of scale argument which helps propel university leaders’ interest in the technology for use in higher education. As scale increases, costs go down. What could be better than something so simple as that?

Most leaders of organizations eventually seek scale in order to reduce the unit cost of production, only to find that it does not always work that way. They got the scale that they wanted, but not the economies they expected. Instead, they accidentally increased total costs (and usually lay people off to offset the increased costs). The unexpected outcomes can be the result of an oversupply of goods or services (inventories of unsold items or margin reduction through lower prices), cost increases in other budget categories that support scale, or changes in the marketplace that undercut the utility or benefits of scale.

College and university leaders should generally expand their critical thinking related to MOOCs, especially the economies of scale argument. Scale is expensive to acquire and may not deliver the expected results. Could leaders do something else that has greater upside potential payoff and also has lower risk?

Yes! College and university leaders can instead lead efforts to improve administrative and academic process to create flow, which causes the economies of scale argument to crumble. I am certain that flow will dramatically improve the value proposition of higher education for students and payers in ways that will be far more satisfying for all than MOOCs.

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