University Mergers: New Strategies for Higher Education Institutions

University Mergers: New Strategies for Higher Education Institutions

Slađana Savović (Faculty of Economics, University of Kragujevac, Serbia)
DOI: 10.4018/978-1-7998-2708-5.ch011

Abstract

The purpose of this chapter is to examine university mergers, their motives, problems, and challenges that emerge during process implementation, as well as their effects. Research results show that rarely there is one motive for merging institutions of higher education, but there are, most often, multiple motives. Furthermore, results of the analysis indicate that the efficiency of university mergers is different and that more successful mergers among institutions of different sizes, as well as among complementary institutions. Additionally, research results demonstrate that the most important challenge related to the implementation of university mergers refers to the conservatism of traditional academic cultures and the existence of strong employee resistance toward change. Finally, results of this study show that the key factors of the success of university mergers are successful management of human resources, leadership quality, communication on important aspects of changes, achieving cultural compliance of integrated institutions.
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Introduction

During the past two decades, higher education institutions have been exposed to numerous and complex pressures. The role of the university has always been to contribute to wealth creation and economic development by providing education and research, but in the knowledge-based economy it is becoming even more significant, as it is expected from academic research to be involved in the economic cycles of innovation and growth (Dooley and Kirk, 2007). Globalization, internationalization, the pursuit of quality, expectations regarding new ways of teaching, the importance of research and innovation in economic development, pressure for ranking and comparison, have placed universities at the center of national competitiveness programs (Lui et al., 2018) and initiated many reform processes in higher education. In this regard, collaborations, alliances and mergers between higher education institutions are becoming priorities for policy makers. Through different types of cooperation universities can become more efficient and effective, better meet the needs of students and industry and build platforms for investments in innovation. Declining student numbers, increasing financial pressures and intensifying competition contribute to the institutions themselves considering these strategies as relevant for their survival, growth and development.

There is a wide range of projects and initiatives for collaboration between higher education institutions, ranging from collaboration on research projects to complex merger processes. Collaborations represent arrangements among institutions (rather than between individuals) embedded in formal agreements or partnerships. Alliances refer to broad forms of cooperation, covering different areas, but institutions continue to exist independently, retaining their separate identities (Williams, 2017), whereas in the case of a merger, the parties create a single legal entity which may retain the name and the legal status of one of them (Fleaca et al., 2015).

Mergers represent highly complex organizational events, during which radical changes occur. Higher education institutions generally show a high resistance to change. Nonetheless, in a number of countries, such as the UK, Norway, Denmark, Belgium, Finland, Greece, Russia, USA, mergers of higher education institutions have been implemented as mechanisms to address the various challenges facing high education. Mergers during 1990s were primarily the result of governments' efforts to restructure their education systems and carry out the necessary rationalizations. The last wave of mergers, at the beginning of the 21st century, was mainly caused by the desire to create scientific excellence in universities and to improve their position in international ranking (Seliga et al., 2018).

While the corporate mergers have been the subject of detailed and meaningful theoretical and practical research, the issue of mergers in higher education has not been sufficiently explored which leaves space for new research aiming to provide contribution to the literature in this field. The main goal of this paper is to investigate mergers in higher education, their motives, problems and challenges that occur during their implementation, as well as key factor for success of university mergers.

According to the set research objective, with this paper the following research questions have been covered:

  • IP1: What motivates institutions of higher education to include themselves in the processes of cooperation and merging with other institutions?

  • IP2: What is the efficiency of implemented university mergers?

  • IP3: What are the key challenges and problems the institutions of higher education are faced with during the implementation of university mergers?

  • IP4: What are the key factors that can help in improving the success of university mergers?

Key Terms in this Chapter

Academic Spin-Offs: Ventures that are initialized in university surrounding so that the intellectual property created within academic institution, could be used for the development of products and services with which it would appear on the market.

Consolidation (true mergers): Integrating two or more similarly sized institutions which form a new insitituons and thus includes a “meger of equals”.

Collaborations: Arrangements among institutions or individuals embedded in formal agreements or partnerships.

Alliances: Broad forms of cooperation, covering different areas, and higer education institutions continue to exist independently, retaining their separate identities.

Merger: Integrating two or more prviously separate higher education institutions into one new single legal entity, which may retain the name and the legal status of one of them.

Horizontal Merger: Incorporates institutions with the same level of academic degrees.

Vertical Merger: Incorporates institutions with sequential levels of academic degrees.

Acquisitions: Acquiring of a smaller institution by a larger one, with the latter retaining its name and presence, and the first case to exist as independent entity.

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