Higher Education

MergerWatch: How internal and external college mergers are similar — and how they’re different

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Ricardo Azziz has held quite a few govt positions in greater training and led the merger that resulted in Georgia Regents College, now Augusta College. He’s principal at Strategic Partnerships in Larger Schooling Consulting Group.

He writes the common Merger Watch opinion collection on company restructuring in greater training.

Not too long ago, a number of universities and schools have explored or carried out consolidations of colleges inside their campuses. How do consolidations or mergers of colleges throughout the similar greater training establishment relate to mergers between totally different establishments? The brief reply — there are vital similarities but in addition important distinctions that leaders should acknowledge to facilitate a extra profitable and fewer disruptive consolidation.    

How are these mergers related?

Mergers between establishments, when they aren’t solely about survival, stem from shared motivators: a want to create operational efficiencies, collaborations, new packages, expanded scholarship alternatives, and a basic rejuvenation and reenergizing of the events. 

So too are mergers of colleges or schools throughout the similar establishment. 

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Ricardo Azziz

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Mergers between establishments are additionally pushed by a want to create larger operational efficiencies and monetary financial savings. It is the identical when a college or faculty goals to cut back the variety of schools or faculties on campus by way of consolidation, notably if their enrollment has been flat or declining. Whereas it will be optimum to redirect financial savings to boost the coed and college expertise, they’re typically wanted to offset present deficits.  

For instance, North Dakota State College President David Prepare dinner lately proposed decreasing his establishment’s seven academic colleges to five. The transfer would start to deal with a $7.6 million discount in state funding associated to declining scholar credit score hours on the college. The College of Wisconsin-River Falls proposed a plan to cut back the number of colleges on campus from 4 to a few and save on administrative prices. Pennsylvania Western College, itself the results of a latest three-way merger, will consolidate its six academic colleges into three because the college seeks to chop prices whereas reversing enrollment losses. And the Faculty of St. Scholastica, in Minnesota, announced in April that it’s consolidating its six faculties to a few.

Consolidation of colleges typically means a concomitant discount within the variety of executives, employees and even college, enhancing financial savings. Nevertheless, much like institutional mergers, the financial savings in human capital are vital however comparatively modest in comparison with the whole thing of an establishment’s funds. 

For instance, PennWest estimates it is going to save roughly $2 million — or 0.67% of its roughly $300 million budget. This could not come as a shock since, regardless of what some college suppose, the price of administrative help inside greater training establishments is mostly modest relative to the working funds of your entire enterprise. 

One ultimate similarity lies within the stage of authorization required to execute this organizational restructuring. Such proposals require the approval of the establishment’s governing boards. 

What are the variations?

There are, nonetheless, essential variations between inside mergers and institutional mergers. Most important is the diploma of transparency, communication, and college and employees involvement. Often, when mergers, consolidations or acquisitions of establishments are being explored, the whole thing of the consideration and negotiation section is confidential. It entails only a few members of the campus neighborhood, particularly the board and high-level executives. Solely when the deal is finalized does the rest of the campus and local people discover out and have interaction within the implementation course of.  

Alternatively, when an inside merger of colleges or schools is being thought-about, the intention is telegraphed nicely upfront, suggestions is sought, and committees of employees and college are appointed. Whereas this doesn’t suggest that college and employees have the facility to approve such a consolidation — the governing board has that sole authority — the initiative doesn’t come as a shock. Stakeholders often have the chance to, at a minimal, guarantee their voices are heard and affect the form of the consolidation. 

A ultimate distinction lies within the board’s willingness to help the initiative. Inside mergers are sometimes supported readily, not like mergers between establishments, which usually entail painstaking and troublesome deliberations by board members.

As for institutional mergers, it is very important word that not all inside consolidations are essentially the correct technique. 

I used to be beforehand president of Georgia Regents College, now referred to as Augusta College, proper after it had been created by way of a merger of establishments. Following the merger, we intentionally cut up the then Faculty of Arts & Sciences. The large faculty, which had housed over 60% of all undergraduates, grew to become the Pamplin Faculty of Arts, Humanities, and Social Sciences and the Faculty of Science & Arithmetic. This allowed for larger and distinct consideration to be paid to the liberal arts and, individually, to the STEM fields. It additionally leveraged the brand new relationship to the educational well being sciences ensuing from the merger of Georgia Well being Sciences College and Augusta State College. 

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