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It was in 1998 that an Australian business school first provided any serious competition to its US and European rivals.

That was when the Australian Graduate School of Management of the University of New South Wales merged with the Graduate School of Business at the University of Sydney.

Ten years on, AGSM, which is based in Sydney, has merged once again, this time with the sizeable faculty of commerce and economics at UNSW. AGSM, which is consistently ranked among Asia’s top centres of learning, was consolidated into a joint faculty by UNSW last September after the University of Sydney decided to end its association in 2005.

Now known as the Australian School of Business, the joint faculty offers undergraduate and postgraduate programmes. It has 240 academic staff including 35 from AGSM. All are housed in a new high-tech university building, grouped in subjects such as marketing and finance.

Of the 8,500 students currently enrolled, 160 are studying the ASB full-time MBA, 1,350 are doing the executive (part-time) MBA programme and a further 150 are enrolled in the part-time MBA offered by ASB in Hong Kong.

As with its former partnership with Sydney University, the integration of the two parts of UNSW is being portrayed by the school as an appropriate model for business education in Australia’s relatively modest market. “When you have only 30 or so academics, it is difficult to have critical mass in business disciplines that you would expect to see represented in a leading business school,” says Alec Cameron, the dean.

“I think we also have a lot more financial freedom now because we have significantly greater cash flows and programmes against which we can manage our overall strategy.”

According to Chris Adam, ASB director and associate dean of postgraduate programmes, the merger will also allow the school to expand in Asia’s emerging markets by building on the “very strong connections” the faculty of commerce and economics has established with business schools in China. “We are looking to have more connections with mainland China and India, and these will flow through to the MBA structure,” says Prof Adam. But critics warn that the integration of AGSM into an undergraduate-dominated faculty could undermine its brand identity, autonomy and the quality of its teaching.

The latest in a series of consolidations that have left the Melbourne School of Business and Macquarie Graduate School of Management as the only stand-alone business schools in Australia, the merger came amid reports of financial difficulties at AGSM, exacerbated by intense competition in an market oversupplied with MBA courses.

This is rejected by Prof Cameron who says that financial concerns “certainly were not our principal consideration”. He adds: “We have not embarked on a major series of cost savings. I don’t think autonomy is an issue…we have got similar levels of autonomy to any other business school which exists within a university.”

Furthermore, Prof Adams says that AGSM’s longstanding “induction programme” for faculty members teaching at MBA level is an assurance “that it will be the same quality of faculty delivering MBA courses as before”. However, Prof Cameron says the school “doesn’t intend to be complacent” about concerns that the integration could detract from AGSM’s brand. “We are focused very hard on making sure that this is not the case,” he says. “But our experience to date is that demand for our MBA programmes is up and the quality of students is much higher than we have had in recent years.”

To maintain that quality, the school has decided to cap enrolments for its flagship MBA at 60 students – even though it has seen a resurgence of interest in the course – in line with international trends.

While the school is seeking to provide a business-as-usual approach for the 60 students (36 from overseas) who enrolled on the full-time MBA this month, it is also adapting its postgraduate courses to appeal to the so-called “Generation Y”.

Prof Adam says: “Today’s students are less individualistic and more comfortable interacting in groups than their predecessors and we are trying to reflect this in our programmes.”

Another innovation is the School of Strategy and Entrepreneurship, one of nine discipline-based schools operating under the auspices of the ASB.

While demand is still strong for a general grounding in management, MBA students are also seeking to specialise in areas such as entrepreneurship, notes Prof Cameron.

“I think we are seeing increasing interest from our students to pursue an MBA, not as a stepping-stone to progressing up a corporate ladder, but as a stepping- stone to establishing their own business.” He adds: “A lot of generation Y students don’t share the aspiration of becoming chief executive of BHP or Telstra.”

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