University mergers are no magic bullet

There is scuttlebutt secret merger talks are again happening in the hallowed halls of public universities across Western Australia.

The speculation has almost certainly been fuelled after a suggestion by WA’s Chief Scientist, Professor Peter Klinken, that all public universities should merge to form a single entity.

At first glance, the idea of merged institutions may represent a silver bullet solution – a quick fix – to address many of the sector’s woes since COVID-19 disrupted the higher education business model.

The pandemic exposed the sector’s high dependence on face-to-face learning and revenue derived from international students.

But history tells us a university merger in WA is highly unlikely.

At some point over the past four decades, all four of WA’s public universities have been linked to, or engaged in, some form of unsuccessful merger consideration.

In 1986, Murdoch University and Edith Cowan University were apparently in discussions about a potential merger though a full year of talks bore no fruit.

Three years later, a proposed merger between Murdoch and The University of Western Australia also failed to get over the line.

In 2005, Murdoch and Curtin University engaged in what was described as a merger feasibility study.

Those discussions were short lived and did not deliver any changes to the higher education landscape.

In the same year, there was speculation about the proposed formation of a new super university, the University of Perth, through merging Murdoch, UWA and ECU – though no formal talks appear to have been conducted.

It is not surprising leaders of universities have been hesitant to push the merger pedal too hard and speed up what may seem like a logical response to the sector’s currently tough operating environment.

Most university leaders concede there is likely to be some upside to select mergers.

While mergers are usually strongly contested amid fierce leadership battles, they also have the potential to produce significant and sustainable longer-term benefits.

These benefits can include reduced overheads, significant efficiencies and greater economies of scale, stronger academic programs and enhanced research profiles.

Some also claim that merging smaller institutions can position them to play more effectively in a global market.

While there may be considerable upside, university chiefs are also quick to point out the potential for substantial downside.

It is the very reason governing bodies and university executives often approach merger discussions with caution rather than enthusiasm.

In WA, each university has its own culture.

Those in leadership roles worry that bringing two or more universities together may cause a clash of those cultures, which will deliver worse rather better outcomes in terms of the student experience, teaching and learning as well as research.

Other vice-chancellors argue there is no such thing as a true merger.

It is rare the merger partners are truly equal in standing. One will always have more students, greater assets, a stronger brand, a superior reputation for teaching or greater international outreach. 

The reality is that one university will always acquire another, rather than merge with it.

It should not be forgotten, too, that merging two weaker organisations will not necessarily make a stronger one. In fact, the reverse is likely to apply. 

There are also university leaders who argue mergers of any kind will kill off much-needed diversity in WA.

Each institution, they say, has differentiated courses that give students a much-needed choice.

Having fewer institutions or even just a single institution, which will reduce university competition locally, may fuel mediocrity in higher education rather than encourage excellence.

And mergers are not a quick fix.

While decisions to merge may be taken relatively quickly, the integration of organisations to produce sustainable outcomes is a long-term proposition and likely to take years and cost millions of dollars.  

Mergers are not the magic bullet that some make them out to be.  

This does not mean they should not be considered because mergers do represent one strategic option for the state’s public universities.

The merger option, however, needs to be considered alongside other possibilities, including joint ventures, structured collaborations, downsizing and further differentiation.

• Professor Gary Martin is chief executive officer of the Australian Institute of Management WA