A C r i t i c a l R e v i e w

Marius Meyer Thomas Groenewald Melanie Bushney mmeyer@uj.ac.za tgroenew@unisa.ac.za mbushney@unisa.ac.za

TUT MERGER CONFERENCE, 8 OCTOBER 2009

MERGERS AT THREE HIGHER EDUCATION INSTITUTIONS:

Our two universities

a. A well-aligned integrated institutionb. A shock or culture shockc. A fragmented institution d. All or most of the abovee. None of the above

What did we achieve with the mergers?

MERGER DEFINED

“the extinguishment of an estate … by absorption into another”

(Pritchard & Williamson, 2008)

INTRODUCTION

• Higher education mergers pose several challenges (Blunt, 2005; Harman, 2002; Kilfoil & Groenewald, 2005; Mfusi, 2004; Pritchard & Williamson, 2008; Wyngaard & Kapp, 2004).

• Several risks (Bryson, 2002; Welch et al., 2008).

• The governance and management of mergers are of utmost importance (IOD, 2009).

MERGER CHALLENGES• Management and leadership• Integration of governance structures and systems• Lack of staff involvement and participation• Staff reaction and resistance• Communication• Financial implications• Duplication in academic offerings/restructuring• Institutional identity and reputation• Diverse cultures

(Adendorff, 2002; Cannon, 1983; Chambers, 1987; Finweek, 2009; Jack, 2007; Kamsteeg; Martin & Samuels, 1994, Millet, 1976; Patterson, 2007;

Reddy, 2007; Rees & Edwards, 2009; Wan & Peterson, 2008)

M E R G E R S

BACKGROUND

PURPOSE OF THE RESEARCH

To critically review the lived experiences of participants in the mergers of 3 higher education institutions in South Africa.

1.Traditional university and technikon (2 cases)2. Technikons being merged (1 case)

PARTICIPANTSFEMALE MALE TOTALS

Institution A 5 5 10

Institution B 8 2 10

Institution C 1 4 5

TOTALS 14 11 25

METHODElectronic Interview:

Questions included

1. Length of merger?2. Partners treated equally?3. Major highlights or successes?4. Major failures or problems?5. How well merger managed?6. Impact on staff members?7. Impact culture of institution?8. Rate success on scale of 1 (unsuccessful) to 10 (very successful)9. What could have been done to ensure a more effective merger?10. Additional comments?

RESULTS: DURATION VARIES

• Still not complete in that a number of merger related issues are still taking place

• Ongoing …

• Two/more cultures

RESULTS: MERGER vs TAKE OVER

• “Larger partner enforced their archaic processes and procedures on the smaller partner”

• “Listen to the big boys talking and pray for survival”

• “Bigger institution swallowed the other”

• “Us vs them”

“It was like merging an elephant with a mouse and squirrel”

32% of the participants perceive that no major highlights or successes were derived from the mergers. However, 68% perceive a range of

highlights and successes.

RESULTS: POSITIVES

International recognition.Fresh/new

institution, with a new

identity.

Access:“Cater for students from all walks of life, even those who don’t have matric exemption”.“An expanded programme offering”.Transformation and redress of the past—disadvantaged students now accepted at previously high profiled institutions.

Staff learn from each other.Teaching opportunities at different campuses.

Party/improved salary and job status.

Pooled financial resources gives more negotiating power.

Pooled strengths and streamlined processes.

Gradual integration of race and culture; improved racial and gender mix.Transformation of executive management.

Improved technology and facilities.Uplifting neglected campuses and fair distribution of resources.Consolidation of policies and functions.

Rebranding or stronger branding.

Better opportunities for staff. Better resource

usage and processes.

RESULTS: CHALLENGES

Absence of well thought

through change

management strategy

RESULTS: CHALLENGES

• Exceptionally poor communication strategy

“Uncertainty for months on end. I did not know what was going to happen to the campus where I worked. I did not know if I had a job or if I was going to be relocated to another campus.”

RESULTS: CHALLENGES

• Inadequate human resource management

“Lack of HR management as posts and salaries only sorted out this year”

“Relocation of staff disrupted people’s personal life and circumstances, especially women with children and family”

RESULTS: CHALLENGESInadequate human resource management

“Exodus of excellent researchers and academics due to resignations and early retirements “

“Time wastage due to travelling between campuses”

“Vacant posts were not filled”

RESULTS: CHALLENGES

• Domination by those that perceive themselves as superior

RESULTS: CHALLENGES

• Domination by those that perceive themselves as superior

“Self interest prevalent”

“Unwillingness to create articulation between former technikon and university programmes”

“New qualification mix favoured former university qualifications”

RESULTS: CHALLENGES

Lack of client centeredness

Did we achieve merger integration?

SUCCESS RATING OF MERGERS

HOW WELL WAS THE MERGER MANAGED?

Not well managed Well

managed“Coercive” “Managed

well”“Poorly, inconsistent” “Did its best”“Autocratic army style” “Fairly well”

“As good as possible”

IMPACT OF THE MERGER ON STAFF MEMBERS

• Plunge in morale• Staff members disengaged• More than 75% of the former institution’s staff

members resigned five years later• Huge emotional impact• Difficult to consolidate the different teaching

approaches• Disgruntled about salaries being capped or

positions downgraded• Opportunity – “landed their bums in butter”

NEGATIVE IMPACT ON STAFF

Negativity & uncertainty

Relocation

IMPACT OF THE MERGER ON THE CULTURE OF THE ORGANISATION• Uncertainty/confusion, “Us” versus “them”• Distrust, absenteeism, lack of team work• Culture of former institution had been

demolished• Diverse culture and positive culture

(“performance driven”, “inclusive and vibrant”, “lots of work need to be done”)

RECOMMENDATIONS

• People issues require more attention (before, during & after)

• Leadership needs to play more positive role• Needs of all stakeholders should be balanced

during merger• Active staff involvement -

buy-in

RECOMMENDATIONS

• Different cultures, systems & processes need to be aligned & integrated

• Clear identity needs to be created – value of different qualifications, programmes

• Need more rigorous change managementstrategies

• More resources & time investedin communication are needed

CONCLUSION

• Some progress has been made to integrate systems and programmes.

• Ineffective change management - culture.• Debatable whether mergers contributed to the

intended goals of HE transformation.• Unclear whether national higher education and

industry needs have been addressed.• Refocus is needed in optimising different

philosophies, resources and capacity to the benefit of all stakeholders.