THE Education Ministry paints a pretty picture of the merger between the University of Manchester Institute of Science and Technology (UMIST) and Victoria University of Manchester. The universities ceased to exist on Oct 1, 2004 when they were merged into University of Manchester.
But there was an untold side to it. The merger ended up affecting the livelihood of the university’s staff, whose jobs were threatened. In 2007, the university announced that it was cutting 400 jobs in a voluntary redundancy plan, causing an uproar.
The merger was stipulated to have created £30 million (RM157 million) in debt leading to the decision to cut down staff.
One should proceed with caution on the subject of mergers as they could create a multitude of problems. Studies have shown that the failure rates of mergers are between 75 and 83 per cent. More modest calculations put the numbers at between 50 and 60 per cent.
A 2013 study by Kyvik and Stensaker on higher learning institution mergers in Norway showed that while merger attempts between 2000 and 2004 thrived in the nation, the majority failed to reach even a positive agreement.
These numbers are not in any way reassuring.
Despite the belief that mergers are the solution to financial problems, top managements usually ignore the realities of organisational cultures and imbalances in the combination of people.
The differences in organisational cultures should not be undermined by the ministry in mergers. Reuters’ Insight website cites “the clashing of firm cultures as one of the fundamental reasons that mergers fail”.
A 2008 study by Gleibs, Mummendey and Noack stated that one reason for the low success rates of mergers was that employees often had difficulty in viewing themselves as part of the newly formed organisation.
Mergers threaten the loss of identity as researches alluded that the word “merger” is actually used for political reasons to avoid revealing that it is practically an “acquisition”.
Rome was not built in a day. The identity of an organisation is the bedrock on which its foundations are built. An organisation’s identity is the historical continuity of its past, a resource that is too precious to be bargained.
This is one of the angles that some parties have failed to see in the Universiti Malaysia Terengganu (UMT) and Universiti Sultan Zainal Abidin (UniSZA) merger proposition.
A merger usually packages along with it a resulting higher stress level among workers of the dominant pre-merger institution. The stress can induce “cognitive rigidity”, which hinders the integration process, hence, creating a messier workplace environment.
Stress, coupled with an imbalance in workplace, will have an impact on productivity, behaviour and job satisfaction among workers.
Another reason why a merger should be more carefully studied is that universities, unlike companies, are run democratically where staff views are taken into account at a higher rate.
That is why the decision to merge UMT and UniSZA came as a shock to many. A more appropriate approach would be to announce “to study a merger” first.
The ministry should tread carefully on this merger. Opinions of stakeholders, especially from the grassroots, must be sought.
WAN MUHAMMAD SAEFULLAH WAN NORHAIDI
Lecturer, Universiti Malaysia Terengganu