December 3, 2023

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Ricardo Azziz held a number of executive positions in higher education and led the merger that resulted in Georgia Regents University, now Augusta University. He is a director at Strategic Partnerships in Higher Education Consulting Group.

He writes Merger Watch’s regular opinion series on corporate restructuring in higher education.

Ricardo Azziz's head shot

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In general, there are three forms of major organizational and business transformation in higher education—what we often call “the big scary change.”

These are mergers (which include what some may call “consolidations” or “acquisitions,” depending on your perspective), closures, and corporate conversions (for-profit to non-profit and vice versa). In recent widely read op-ed, biology professor Jim Murphy asks the question, “Is fusion closure by another name?” Murphy works at Bloomfield College, a small nonprofit in New Jersey that is affiliated with Montclair State University.

Emphasizes the importance of mission alignment when merging institutions. Murphy also notes that ensuring such alignment requires consistent transparency throughout the merger process, maintaining the principles that make up Bloomfield’s identity, and the need to ensure a stable and experienced faculty body, particularly by retaining Bloomfield faculty.

While all of these statements are thoughtfully made, the real question should be, “Is it better to merge than to close?”

This is an important question because institutional closure is not as remote a possibility as some members of our community would prefer to believe. Actually, as I noted earlier, so far 15% of all degree-granting universities have closed in the last decade. No, closure is a real possibility for many small private colleges like Bloomfield.

Higher education has countless stakeholders – far more than other industries. They need to realize that merger is better than closure. It doesn’t matter what. Because the merger is not about the faculty, or the administrators, or even the alumni or the local community, although they are all important components.

What trumps everything are the students. While our institutions may be engines of research or discovery, or economic engines for their communities, or employers of choice, or agents of diversity and social justice, or repositories of alumni memories, they are—first and foremost—institutions that serve to educate and train. students.

So let’s rephrase the question: “Is a merger better for students than a closure?” The clear answer is, “Yes.”

Like data from the National Student Clearinghouse Research Center and the State Higher Education Executive Officers Association shows that more than 50% of students drop out when their college closes—even more so when their institution closes suddenly. And unfortunately, closings are more likely to affect colleges that enroll a higher proportion of vulnerable students—those of color or those with exceptional financial need, such as those who receive Pell Grants.

As someone who advises many institutions and leaders in this arena, I am always surprised by how little many stakeholders are willing to compromise—even to the point of risking closure. Board members and managers alike want to find a (preferably well-equipped) merger partner that would allow them to retain the board, name, mission, endowment, faculty, staff, curriculum, policies, and so on. . Basically keep them the same but give them new funding.

However, fusion is about compromise and flexibility. Flexibility and concessions on all sides, but realistically rather on the side of the institution that needs it most.

Undoubtedly, all parties involved want something from the transaction. Faculty want job security, better salaries, less teaching load and more opportunities to stay. Employees want job security, better pay and more recognition. Boards want to stay influential and relevant. Graduates want to feel like they still have a home they recognize. Managers want to stay, well, efficient.

But the party that has the greatest need is the students. They need the opportunity to further their education without limits.

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