Strategic Mergers of Strong Institutions to Enhance Competitive Advantage
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Strategic Mergers of Strong Institutions to Enhance Competitive Advantage Grant Harman and Kay Harman Centre for Higher Education Management and Policy, University of New England, Armidale, NSW 2351, Australia. E-mails: [email protected], [email protected]
Strategic mergers are formal combinations or amalgamations of higher education institutions with the aim of enhancing competitive advantage, or merging for ‘mutual growth’. Recently, in a number of countries, there has been a decided shift from mergers initiated by governments, and dealing mainly with ‘problem’ cases, towards institutional-initiated mergers involving strong institutions, and with clear strategic objectives. These issues are addressed and a case study is presented of the 2004 merger that created the new University of Manchester, which aims to be among the top 25 universities internationally by 2015. Higher Education Policy (2008) 21, 99–121. doi:10.1057/palgrave.hep.8300172 Keywords: strategic mergers; amalgamations; strategic alliances; consortia; competitive advantage; organizational culture
Introduction This paper explores strategic mergers of higher education institutions entered into with the objective of safeguarding and enhancing competitive advantage, rather than addressing such problems as institutional fragmentation, falling enrolments or non-viability.1 Strategic mergers are formal combinations of two or more organizations into a single organization deliberately planned so as to more effectively meet external challenges and opportunities. In relation to higher education, strategic mergers are what Martin and Samels (1994) describe as strategies of ‘merging colleges for mutual growth’. Driven by an increasingly competitive global market for higher education services and external research funding, institutional mergers are one of a number of responses seriously considered by higher education institutions. Other strategies include informal collaboration; joint business ventures; strategic alliances; regional, national and international networks and consortia; and cross-institutional mergers of academic and/or service departments. Here, the focus is on one particular form of strategic merger where strong universities or colleges on their own initiative amalgamate with other strong institutions in order to enhance their competitive advantage. Our interest is
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particularly in mergers of strong universities. The paper sets this particular form of merger within the context of the historical use of higher education mergers and the scholarly literature on such mergers, before proceeding to consider one particular case — the October 2004 merger of the Victoria University of Manchester (VUM) and the Manchester University of Science and Technology (UMIST) to form the new University of Manchester. This new university was the outcome of a strategic vision shared by UMIST and VUM that the external environment favoured larger institutions with broader and deeper subject covera
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