Any Manchester Business School students looking for a mergers and analysis case study could do worse than examine the school itself. Created from an amalgamation of four institutions in 2004, its director Michael Luger (above) admits it has had as many teething troubles as any corporate giant.
He arrived in 2006 from the US to find “four different cultures, four different messages,” he says in an interview in his spartan office.
“When I looked at this job from the outside I saw enormous potential. But it was not being met. It was no-one’s fault. It was down to the merger. Small cottage industries found themselves in the biggest business school campus in the UK – possibly in Europe,” he said.
“We had to practise what we preached in mergers and acquisitions and make sure we were professional about it.”
It was a suitable challenge for a school, originally founded in the 1960s, that adopted the “Manchester Method”, giving students as much experience of practical business problems as possible by sending them on lengthy internships.
The MBA lasts 18 months rather than the European standard of 12 months to allow students to work on 10-16 week projects with companies.
The school now makes a profit – rather than the £3.3m annual deficit Prof Luger inherited when he arrived from the University of North Carolina at Chapel Hill in 2006.
The wiry American may speak softly, but he does not hesitate to wield a big stick. He rails against some of the restrictions he finds in the UK – state funding constraints and the security of tenure.
“It is not like a private company where you can hire and fire,” he moans.
Nevertheless, he managed to squeeze out 43 administrative and teaching staff, a sixth of the total, through early retirement and voluntary severance.
“We exploited the economies of scale the merger allowed.” There are now 250 faculty staff for 1,050 full-time equivalent students.
The school is now tackling the other legacy of the merger - the four buildings. While all lie within a few hundred metres of each other they are confusing for the first-time visitor. “It is like a fortress,” Prof Luger admits.
Next year work will start on a new conference centre and hotel as part of a £600m Manchester University development.
Fundraising will then begin for the refurbishment of the main 1960s campus building and two of the buildings will be handed to the university. The remainder will be centralised around the square of a university-owned shopping centre, giving a more open and accessible school.
Those who would like to follow the Manchester Method without moving to Manchester, can attend MBS Worldwide campuses in Singapore, Hong Kong, Shanghai, Miami, Rio and Kuala Lumpur. They offer modular, part-time, courses and as buildings are leased, not owned, the cost is kept down.
With fewer companies sponsoring students, the cost of an MBA is more important than ever and being outside London helps MBS.
“Students are looking for value for money. They realise they are not necessarily going to walk into a six-figure job in the City at the end of their programme,” Prof Luger says.
Manchester, which styles itself the “Original Modern City”, has always liked to do things differently. It was the cradle of the industrial revolution and remains the headquarters of the Co-operative Group, the largest member-owned retailer in the world. Not short of confidence, its swaggering exports include rock band Oasis, and three-times European football champions Manchester United.
Prof Luger says the school has long-rejected case studies alone as too sterile. “We want our students to have a real time series of learning experiences with clients.
“It is very autonomous and really practical. There are real things that change so you have to be flexible and adaptable and it provides students with better leadership experience than cases will.”
Prof Luger has brought the school closer to business, expanding executive education, which includes clients such as Group Four Security. Applications for MBAs are up, as with many business schools, but the 18-month timeframe restricts participant numbers. “We have grown from 112 to 145 and the most we could do is 150.”
He says US business schools are too insular. “Here you have 50-something nationalities in a 150-person group. Just a handful are from the UK. It is very international and that is a much better preparation for the business world.”
Students can also rub shoulders with – or at least attend lectures by - the likes of Joseph Stiglitz, the Nobel prize-winning economist of Columbia University, and Robert Putnam, the influential author of Bowling Alone, from Harvard’s Kennedy School of Management, who have part-time contracts with Manchester University.
“Getting Nobel Laureates to spend time here is an expensive way of directing resources,” says Prof Luger. “I was sceptical but it works. Joe Stiglitz comes over here and does workshops with the faculty. Bob Putnam is a wonderful colleague.”
However, he stresses buying in star names is a transitional arrangement. The school has risen from 44 to 33 in the FT’s European rankings this year and Prof Luger aims to crack the top 15.
“We want to be first in the world,” he says. “That’s when the best faculty in the world will leave Wharton or London Business School and come here. The best students to do MBAs will come here. Corporate boards will look at us in the same bracket as they look at Harvard.” Three years in and he is starting to adopt the Mancunian swagger.