Friday, January 1, 2010

Brief Background of American Higher Education Mergers

In my opening post on this blog, I promised to provide a brief background of mergers in American higher education. A much more extensive review can be found in the literature review of my dissertation. While mergers have not been terribly common in American higher education, quite a few have occurred over the years. It is also the case that this is a topic that has not been examined in great detail in the literature. A few books have been written on the topic, a handful of journal articles (most focusing on mergers outside the United States) and a few dissertations.

Central to the understanding of traditional merger thought was that institutions merged out of financial necessity, with one institution "bailing out" another in financial disarray. This view was espoused by John D. Millett in his 1976 book Mergers in Higher Education: An Analysis of Ten Case Studies. During this time, Millett found that the mergers he examined all involved some sort of financial difficulty by one or more of the partners involved, and the merger facilitated survival in some sense.

Millett's approach is contrasted by a more modern one, that of the mutual growth model. In 1994, James Martin and James E. Samels published Merging Colleges for Mutual Growth: A New Strategy for Academic Managers. In this text, Martin and Samels posit that mergers should occur for mutual growth, not for financial reasons. The mutual growth concept entails two or more institutions coming together each out of positions of strength, with the end product combined being stronger than the individual parts. This is merging for the "right" reason, and Martin and Samels would suggest that merging for financial reasons can mean setting up the merger for difficulty, and possibly failure. Mergers that do not involve the duplication of academic programs are also more likely to succeed, such as adding a medical or engineering school into a comprehensive university. Mergers involving the combination of two liberal arts institutions, for instance, may have much more difficulty due to the controversial nature of their overlapping programs. How does one reconcile two English department chairs? Two sets of English department faculty? Different requirements and curricula in the English program?

A list of higher education mergers in the United States shows a broad cross-section of institutions, geographically and with respect to the type of merger. Mergers that are proposed today tend to fit both the traditional and mutual growth approaches, though financial factors seem to figure in, at least in a minor way, in nearly all cases. In some of the strongest cases for mutual growth mergers, cost savings is listed as a minor potential benefit of the mergers. Major potential benefits of mutual growth mergers typically include enhanced opportunities for academic synergy (connection between programs and possibilities for new programs), greater opportunities for research funding, enhanced economic and political clout and more. President of The University of Toledo, Dr. Lloyd Jacobs, has one of my favorite sayings about universities that directly relates to the merger of institutions. Dr. Jacobs says that the degree that you hold from an institution is like a variable stock certificate; it can go up or down in value. Therefore as an alum of a university, you should want the institution to prosper, thus making your degree more valuable. Indeed, with mutual growth mergers planned and executed well, the institutions can become more prestigious, thus increasing the value of the degrees of alumni.

This blog covers proposed mergers of both the traditional and modern approaches, but added emphasis is given to mergers of mutual growth. This is due to the fact that the institutions examined in my dissertation followed the mutual growth model, and because I agree with Martin and Samels that merging under these circumstances provides the best opportunity for success in creating a vibrant, dynamic merged institution.