WhatWhat’’s the Xs the X--factor in factor in UK university mergers?UK university mergers?

Natalie Baguley, Manchester Business School

Julie Davies, Association of Business Schools

AACRAO Conference, Thursday 1 March 2007 1:30pm – 2:30pm. Session 467

UK GOVERNMENT POLICY UK GOVERNMENT POLICY ––diversity, specialisation, markediversity, specialisation, marketisationtisation

Leadership Foundation for Higher Education Summit: www.lfhe.ac.uk/publications/evolvingagenda.pdf

(5) RESOURCES & ESTATES DEVELOPMENT: sustainable facilities & services project & programme management

(8) FUNDING: variable fees, fund-raising, diversifying income sources, full economic costing

(6) GOVERNANCE: new Code & CUC Guidance

(1) CONTINUING GLOBALEXPANSION OF STUDENT NUMBERS

(11) ENHANCING THE STUDENT EXPERIENCE: teaching, learning &quality ‘customer service’

(12) MANAGEMENT OF RESEARCH: evolution of Research Assessment Exercise process research contracts & careers academic pipeline

(13) INTERNATIONALISATION: competition/collaboration, European research area, private universities, Bologna process

(9) MARKETING: positioning of higher education institutions, identity‘brand’ issues

(10) COMPETITION IN UK: (10) COMPETITION IN UK: alliances, collaborations & alliances, collaborations &

mergersmergers

(7) SUSTAINABILITY & CORPORATE SOCIAL RESPONSIBILITY: serving broader political, social, ethical & cultural agendas

(14) BUSINESS, REGIONAL & COMMUNITY INTERACTIONS: ‘third stream’, knowledge transfer, economic & social regeneration

(2) WIDENING PARTICIPATION: fairaccess, bursaries

(3) HUMAN RESOURCES: retirement peak, succession planning, pay framework, performance assessment

(4) IT E-MANAGEMENT/LEARNINGE-STRATEGY

(15) EMBEDDING EQUALITY & DIVERSITY IN ALL INSTITUTIONAL ACTIVITIES

WELL BEING2012 OLYMPICS!

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Focus on 2 Case StudiesFocus on 2 Case Studies

1. London Metropolitan University: 20021. London Metropolitan University: 2002

2. Manchester University Business School: 20042. Manchester University Business School: 2004

Trivia QuestionTrivia QuestionHow old is Queen Elizabeth II?

70, 75, 80

Factor X?Factor X?

Vision without action is a daydream. Action without vision is a nightmare.

~ Japanese Proverb

UK university headlinesUK university headlines

2007: Imperial College severing link with the University of London. 2005: Central School of Speech and Drama joined the University of London.

2007: Oxford University: Templeton College (Exec Ed) + Saïd Business School are merging.

“Oxford dons are considering holding a vote of no-confidence in the Vice-Chancellor, Dr John Hood, in opposition to his style of management and proposed governance changes.” The Oxford Student, 9 Feb 07.

2006: both Newcastle and Durham University rejected suggestions they should merge.

2006: Wimbledon School of Art joined University of the Arts London.

2004: Cardiff University merged with the University of Wales College of Medicine.

2002: proposed merger between Imperial College and University College London was called off.

Iconic institutions are key national and international institutions, not only in advancing education, discovery and innovation, but also more broadly in enriching the culture and enhancing the quality of public life in the communities they serve.

President Manchester University, Prof. Alan Gilbert

Manchester: North-West England, Europe’s largest concentration of students (c. 70k)

Trivia QuestionTrivia Question

What do you call someone from Manchester?

(1) Mancker

(2) Manchestrian

(3) Mancunian

New MBS New MBS –– the UKthe UK’’s s largest business schoollargest business school

Faculty of almost 200, nearly the same size as Harvard Business SchoolFormed from four different departments in two universities in October 2004Huge organisational and cultural challenges18 month strategic review process$70m annual turnover plus $20m distance learning companyVision: to be one of the world’s top 25 business schools in all areas of activityNew (American!) Dean started on 1 Jan 07

www.mbs.ac.ukwww.mbs.ac.uk

Types of Business SchoolTypes of Business School1. Social Science:

2. Liberal Arts:

3. Professional School:

4. Knowledge Economy:

contribution to knowledgeother academicsresearch excellence

self knowledge, wisdom, leadershipcritical thinking of managersbusiness in society

improvement of management practicemanagers, employers, governmentteaching excellence

commercialisation of knowledgeorganisationsfield testing

PROFESSIONAL SCHOOL

KNOWLEDGEECONOMY

LIBERAL ARTS

SOCIALSCIENCE

TeachingFocus

ResearchFocus

Scholarly Impact

Organisational Impact

• Old MBS profile

• 50 academic staff and 12 research staff

• 105 professional support staff

• Postgraduate and post-experience only

• International reputation built upon MBA

Other three partners added together give a school the size of Harvard’s

• 130 academic staff and 50 research staff

• 85 professional support staff

• Full-service, research excellence.

Poles apart

• Consultation on our name

• Programmes and students

• Relations with business and industry

• Location

• Different degrees of autonomy

• Different view and use of committees

Potentially divisive factors

• University’s research-led agenda

• 2015 vision of “world’s top 25”

• Need to define School strategy

• Struggle for more autonomy in Humanities Faculty

• Complementarity

Unifying factors

• Impression of an ‘old MBS’ takeover

• Taking work off academics – different expectations

• Professional reporting lines

• Fuzziness vs. systematic

• Move to specialisation

• Four buildings – so difficult to build up teams

• Rest of University was devolving while MBS was coming

more under central control

• The University and Faculty (the Sun & the Moon)

Cultural challenges for MBS administration

• Equal opportunities, lack of discrimination, friendly & relaxed working

environment; supportive colleagues & immediate managers

• Equipment, resources and the physical environment

• Clear roles and duties. 67% response rate!!

Administrative questionnaire - positives

- negatives• The sheer amount of work – “teetering on the edge”

•• CommunicationsCommunications

• Unclear policies and procedures

• Unclear strategies and goals

• Information overload

• High level of continuity

• Some glitches, but professional service maintained

• Equal treatment has been the major issue

• Need to define and protect premium services: e.g. career management, graduate library,

enhanced computer facilities

• Benefits of merger, in term of access to far more academic staff, have yet to be realised

• But for the most part, refreshing indifference.

Other stakeholders: students

alumni• Struggle to keep some older MBA alumni on board

• Faculty of Humanities does not go down well

• MBS Alumni Association working to redefine its offer

• Benefits of a higher critical mass: 7k to 20k

• Closer co-operation with University alumni office

• Sir Terry Leahy, CEO Tesco, is now an MBS alumnus!!

• New brand identity – much more closely linked with the

University; loss of valuable old brands

• Teething problems with University website and computerised

admissions systems

• University contingency for short-term drop in numbers

• Undergraduate admissions booming;

other areas (more attuned to old brands)

have been more difficult.

Other stakeholders: potential applicants

• The first green shoots of optimism beginning to come through

• MBS Strategic Review Group report in 2006 signalled:

• More autonomy as a School

• Priorities to be put in sharp focus

• Commitment to invest in staff, the building and marketing

• “World top 25” is a simple, unifying message that staff can rally around

• The merger has made this goal a distinct possibility, whereas none of the

old partners could have achieved it alone.

And on the positive side…

• UG: to be ranked #1#1 in the UK

• PGT: to raise revenue by increasing numbers & fees

• PGR: to shrink but increase the quality

• MBA: to be ranked in the top 20top 20 in the world

• EXEC ED: to raise revenue & quality of client organisations

• RESEARCH: within the world’s top 25top 25 research institutions

2015 aims

ACTIVITY PROFIT GROWTH REPUTE

Undergraduate *** * *

Specialist masters *** *** *

MBA * * ***

Research degrees * * **

Executive education *** ** ***

How activities contribute

• Would not try to run the staff transfer process and

grade assimilation concurrently.

• Would concentrate more on reviewing

administrative processes rather than structures

• Would anticipate ‘HR overload.’

• Would not invest $80m in new IT system at the

same time as managing the merger process.

If we were doing it again…

• Allow an additional year – done in a frantic rush

• Cut out the ‘phoney consultation’ which wasted months

• Additional human resources

• Bring in outsiders to give an external view

• Phase in the new brand gradually

• Tackle the difficult issues first

• Define and get buy-in for the School’s strategy before trying to work on

a detailed workload allocation model

• Establish key policies and procedures BEFORE the merger.

With the benefit of hindsight…

• New IT & other systems still not working properly

• “Structural deficit” & budget squeeze

• Major review of administrative processes

• No administrative promotions since October 2004

• Communication problems in such a huge organisation.

Has it worked?.…the internal perception

• University of Manchester voted “UK University of the YearUK University of the Year”

by two separate organisations in 2005 & 2006.

• University of Manchester – “the most popular university in the most popular university in

the UKthe UK” based on applications in 2005 & 2006.

• Manchester Business School – Financial Times Ranking of

MBAMBA Schools: moved from 44th in the world (2005) to 2222ndnd in

2006 & 2007.

Has it worked?.…the external perception

Trivia QuestionTrivia QuestionThis London building is the:

(a) gherkin

(b) torpedo

(c) glass bullet

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www.londonmet.ac.ukwww.londonmet.ac.uk

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•• Formed on 1 August 2002, merger London Guildhall Formed on 1 August 2002, merger London Guildhall University and University of North London. Founded in University and University of North London. Founded in 1848 and 1896 respectively.1848 and 1896 respectively.

•• Two main sites: City of London and North London.Two main sites: City of London and North London.

•• Largest single University in London, one of the largest Largest single University in London, one of the largest in the UK.in the UK.

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Biggest single Biggest single University in LondonUniversity in London

•• 34,000 students, 4,000 international students. 34,000 students, 4,000 international students. Students from 150 different countries, Students from 150 different countries, speaking 120 different languages.speaking 120 different languages.

•• Business schoolBusiness school•• 33% of students33% of students

•• 220 full time academic staff (25% of total)220 full time academic staff (25% of total)

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Rationale for merger

Two small, undercapitalised universities with Two small, undercapitalised universities with complementary widening participation agendas in complementary widening participation agendas in central/north London. University of North London (UNL)central/north London. University of North London (UNL)& London Guildhall University (LGU).& London Guildhall University (LGU).$12m million government dowry 1 August 2002$12m million government dowry 1 August 2002No faculties, just departmentsNo faculties, just departmentsCommunications: tube, major publicity campaignCommunications: tube, major publicity campaignMission: to promote social inclusion. Focus on teachingMission: to promote social inclusion. Focus on teachingand knowledge transfer.and knowledge transfer.Significant merger task: merger of undergraduate Significant merger task: merger of undergraduate programmes and new supporting systems.programmes and new supporting systems.

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Business development plan for govt. funding.Financial stability.Project management.Academic fit and the assimilation of staff. Avoiding the appearance of a takeover.Staff opposition.

Merger is a long-term process, imposing heavy workloads on senior people & joint structures. Effective communications & due diligence are vital.

Potential deal breakers & key lessons

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PositioningPositioning

Mission stresses excellent educational & knowledge transfer Mission stresses excellent educational & knowledge transfer services, engaging with realservices, engaging with real--world issues, transforming world issues, transforming individuals and society, & enabling students to achieve their individuals and society, & enabling students to achieve their potential & London to succeed as a world city. potential & London to succeed as a world city. Full service, UG, PG, PT, Research Institutes, Exec EducationFull service, UG, PG, PT, Research Institutes, Exec EducationInternationalInternationalAmbitiousAmbitiousResearch aspirationsResearch aspirationsPockets of excellencePockets of excellence

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LMULMU’’s rankings rankingRefuses to participate in newspaper league tablesRefuses to participate in newspaper league tables..

Relative size: LMU is the largest unitary university in Relative size: LMU is the largest unitary university in London & one of the largest universities in the UK. The London & one of the largest universities in the UK. The largest universities in the UK in terms of their total number largest universities in the UK in terms of their total number of HE students in 2004/5 were: the Open University 173,015; of HE students in 2004/5 were: the Open University 173,015; The University of Manchester 39,985; The University of The University of Manchester 39,985; The University of Leeds 36,205; The University of Nottingham 32,620; The Leeds 36,205; The University of Nottingham 32,620; The Manchester Metropolitan University 32,215 (source: HESA). Manchester Metropolitan University 32,215 (source: HESA).

And in London: LMU: 29,400; University of Westminster And in London: LMU: 29,400; University of Westminster 26,775; Middlesex University 24,885; City University 23,925; 26,775; Middlesex University 24,885; City University 23,925; University of Greenwich 22,275; King's College London University of Greenwich 22,275; King's College London 21,965 (HESA, 2004/5). 21,965 (HESA, 2004/5).

LMU is the most popular UK University for European Union LMU is the most popular UK University for European Union students, & the third most popular university for students, & the third most popular university for international students more generally. international students more generally.

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““Business schoolBusiness school””departmentsdepartments

1)1) Accounting, Banking and Financial SystemsAccounting, Banking and Financial Systems2)2) Business and Service Sector ManagementBusiness and Service Sector Management3)3) Economics, Finance and International BusinessEconomics, Finance and International Business4)4) Management and Professional DevelopmentManagement and Professional Development

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2007London MetLondon Met’’s s ““Business SchoolBusiness School””

Still a collection of departments on two distinct sites, Still a collection of departments on two distinct sites, duplicating programmes.duplicating programmes.

Individuals safeguarding their positions rather than a Individuals safeguarding their positions rather than a corporate view?corporate view?

ConclusionsConclusionsLeadership in universities is about shaping change & enabling. Communicating.

Warren Bennis: you need ‘to set the target that beckons.’

Create a sense of urgency, develop an appropriate vision & strategy & create a supporting infrastructure. An external threat is a useful ploy.

Make the rhetoric reality, get quick wins, tough love, change behaviours.

Sustainable change following mergers is about core values, ensuring the new ways of working are superior to the old.

It helps if the two Vice-Chancellors are retiring – Manchester legacy.

Thanks, praise, rewarding and recognising status and paying people extra on the basis of performance!

DiscussionDiscussion

Could a US and UK university merge?

Feel free to visit usFeel free to visit us……..

natalie.baguley@mbs.ac.uk

jdavies@the-abs.org.uk

Thank youThank you