In a move that could create one of the largest business schools in the world, Ashridge, the UK executive education specialist, and Hult International, the multi-campus business school, have announced a strategic alliance that is intended to lead to a full-blown merger.
The announcement comes less than a day after Arizona State University announced that it had reached an agreement with Thunderbird, the US business school noted for its international business curriculum, for the latter to become part of ASU.
The two deals are the latest in a series of business school mergers prompted by the cost of teaching quality education on a global basis while providing high levels of technology support and facing increased competition from a range of institutions including commercial companies. “The whole value chain is being disaggregated and rearranged,” says Kai Peters, chief executive of Ashridge.
Mergers have been particularly prominent where state support for higher education has been cut, such as in France.
The deal between Ashridge and Hult will give the proposed joint entity a full service business school, with undergraduate, masters, MBA, EMBA and executive education teaching. Combined, the schools have close to 300 professors, more than 4,200 degree students and £25m in executive education revenues.
Prof Peters says the deal will answer the needs of the corporate world, giving companies a strong supply of undergraduate, masters and MBA graduates, high quality research and executive education teaching. The Hult family will support the alliance with £50m investment, according to Stephen Hodges, president of Hult.
The alliance will also address many of the problems faced by the two schools. For Ashridge, the cyclical nature of the executive education business – 2008 to 2012 were particularly bad years – has resulted in no assured source of revenue. For Hult, the lack of business research and highly-qualified academic staff have meant it has been unable to seek accreditation from bodies such as AACSB and Equis, the accrediting bodies in the US and Europe – Ashridge holds both Equis and AACSB accreditation.
Over the past few years both Hult and Ashridge have been in merger talks with other institutions. In particular, Hult was named as one of the potential partners for Thunderbird, which will now be integrated into ASU.
“We walked away from Thunderbird because we felt integration would be too difficult,” says Prof Hodges. Because both Ashridge and Hult are both stand alone business schools – they are not attached to a university – the two bosses are expecting the integration will be easier than if a university were involved.
The proposed former alliance between Hult and Thunderbird was also more difficult because there was a high level of duplication in the programmes taught by the two schools, particularly the MBA. As Ashridge concentrates on more mature students and executive teaching coaching, there is little overlap with the younger students at Hult, says Prof Peters.
Another jinx on Thunderbird’s attempts to find a partner was the very vocal objections from a small group of alumni. Both Prof Hodges and Prof Peters say they have both received support from alumni and corporate partners as well as the board of the schools.