The Melbourne Business School merger with the Faculty of Economics and Commerce (FEC) at the University of Melbourne was officially called off today. The story was pretty simple: MBS has had a decades-long history of being a self-funded and independent faculty. This is a model that has been pursued by many of the most successful business schools in the world and it had considerable backing from members of the business community who had given their money and their time to the School. In the end, it was those individuals who believed that this core feature of MBS had to remain. The merger — even in its very unique proposed corporate form — did not retain that and with that it is was doomed.
I’m going to express some opinions that are my own at this time. This has been a long process and I have learned alot about what is and what is not possible in this educational space in Australia. The rationale for the merger was to improve coordination between MBS and the University and to prevent the strangeness of the situation whereby the University both had a Business School and a Graduate School of Management. That situation was, indeed, strange, but ultimately was not strong enough a rationale to change what had been a revolutionary institutional development in Australian education. Moreover, experience at the University of NSW had demonstrated that integration had not been kind to the ability for them to deliver a world-class MBA program (see the recent AFR Boss rankings that put AGSM at No.4 behind MBS, Monash and Macquarie).
While I could see that there was potential in a larger integrated entity, over the course of the year it became apparent that there were real risks from integration. In particular, the cultures of MBS and FEC are very different. MBS is necessarily a multi-disciplinary environment. To construct a successful MBA program requires very tight coordination and understanding between disciplines as to what each does and contributes. You can’t achieve that when each discipline operates in its own silo. MBS has no separate formal departments or even groups. For instance, there is no Economics Department. We have evolved a system of appointments and promotion of faculty that requires buy-in from all disciplines and we have made it work. It is why, I, as an economist can work side-by-side with marketers and organisational behaviouralists without the conflict perceived (and I guess real) elsewhere amongst disciplines. It is a politics-free environment that is unique in our academic experience. It is not something that I wanted to see go and I was worried it might not survive the merge.
The results of that culture will be something we will preserve going forward. First, it is highly research-based. It wasn’t always like that but now you will find that the vast majority of our faculty publish regularly in the top tier journals in their field. Through the merger process we learned that on any objective measure of research output our faculty out performed those of FEC (citations, journal publications and grants received per capita). And we don’t think we are done yet.
Second, the teaching culture is second-to-none. Three quarters of all subjects taught at MBS (maybe more) have averaging ratings of 4 out of 5 or above. This is a long and sustained record and it comes through even more strongly in subjective shows of support that give rise to MBS’s strong showing in broad-based surveys. Ironically, the MBS faculty — perhaps as part of a minority in the University — have always been strongly supportive of the Melbourne Model because of its potential to raise teaching outcomes. We saw ourselves as a critical part of that model with a specialist focus on graduate education. That potential is still there although I must admit to being disappointed that the University never really engaged with MBS faculty’s support and chose to enter with its own graduate school in this space. I sympathise with those members of FEC who wince at the thought of millions more dollars in marketing and advertising gracing the lift-outs in The Age.
Finally, our faculty are engaged with public debate and the business community. The University talks about knowledge transfer but it still remains a difficult affair. Almost every single MBS faculty member has appeared in the media this year and some do so regularly. Our media mentions average over 5 per day and this for a faculty of just 40 or so individuals. And that is aside from the fact that our faculty make up most of the University’s blogging pool (right here at Core Economics). No other part of the University — here or anywhere in Australia — comes close to that record.
So what of the future? MBS’s finances are sound. Yes, these are difficult times but there was never any hint that the merger was driven by finances despite the constant desire of others to couch it in those terms. Moreover, unlike other places, the University has always benefitted from the fact that MBS drew no funds from the University and contributed in the form of adding to its research contribution from the Federal Government. That will continue.
In addition, there may be concern about the issue of intra-University competition. I used to quip that the “University of Melbourne has more business schools than any other university.” That will remain but, in reality, those entities do very different things. It can be confusing from outsiders to try and work out what is different about MBS and the MGSM but if prospective students can’t work that out in two minutes, they are surely not cut out for our MBA program. MGSM may decide to compete head-on and try the market on this. But I cannot imagine how this will be anything but a costly exercise that will distract their own faculty from the important research they do and their excellent record in undergraduate education. But you can watch The Age to see where they go there.
Finally, what of MBS’s position? Might this all undermine our ability to continue to hire the best faculty? Interestingly, we discovered through the merger process that one thing we were not doing was attracting faculty on the basis of pay. FEC contained the highest paid faculty members amongst the two entities. However, our junior faculty faired better — as well they should. It takes time to learn how to teach demanding MBA students and they deserve some compensation for the difficulty they face in building a research profile under those conditions. That said, even amidst the uncertainty of the proposed merger we managed to hire Jill Klein, Etty Jehn, Andrew John, Bob Wood and Sally Wood; all leaders in their fields. They were all attracted by their own personal observations of our academic culture. If we can do that during the past year, think about what we can do outside of that uncertainty.
MBS goes into the next couple of years with Jenny George at the helm who has the support of the Board and the overwhelming support of the faculty to lead us through this. I am hopeful she will soon be confirmed as MBS’s first woman Dean. I recruited Jenny to the school about 10 years ago and couldn’t be more proud of how things have turned out in her career.