Knowledge Exploitation and Exploration in a Higher Education Merger: A Performative view

Knowledge Exploitation andExploration in a Higher EducationMergerA Performative view Dr. Richard WOODWARD Mehdi SAFAVI

The failure of mergers in businessWith hundreds of studies on mergers, we can estimate that 50-80% of them fail to achieve the goals set for them by management – one third create value – one third destroy value, and – one third fall short of expectations• Recent prominent examples: failure of Daimler- Chrysler merger and Volkswagen-Suzuki allianceWhat lessons can be learned from business for academic mergers? Central lesson: Failure usually due to problems in integrating different organisational cultures 2

What do we mean by organizational cultures, and how do you integrate them?By organizational culture, we refer to the body of tacit (non-canonical) knowledge embodied in an organization and constituting its identity The organization as both a community and a collection of communitiesThe difficulty with integration is due to the tacit nature of the knowledge involved – Merger management often focuses on “transfer” of explicit knowledge, neglecting the tacit knowledge that must accompany it to make it meaningful – To share tacit knowledge, it is necessary to develop a common language 3

Performative view of knowledge•Performative view of knowledge as knowing: – A capability, not an object – Cannot be transferred, but only recreated – Enacted in everyday practices and routines; a part of our action rather than a tool or an aid to it All of this underlines tacit nature of knowing•Important: Different levels of tacitness atdifferent levels of the organization 4

Exploration, exploitation and cognitive distanceOrganizational communities are divided by varyingcognitive distances Crossing those divides is done for different purposes, involves different strategies, and employs different resources depending on the distance•Exploitation Vs. Exploration – Exploitation refers to incremental changes in the use of knowledge (routines) already existing within the organization; collaboration for exploitative purposes typically takes place across a smaller cognitive distance – Exploration is the search for radically new knowledge which may lead to organizational transformation and by definition involves crossing greater cognitive distance 5

Why academic merger? The US and the UKMany mergers in American higher education since early 1970shave fallen into four categories (other than bankruptcy/bailout): – mergers of small women’s colleges into larger coeducational institutions – consolidation of public institutions into state systems – court-mandated mergers for racial desegregation purposes – mergers of institutions with complementary missions and strengths‘The history of the expansion of universities in the UnitedKingdom [is] a history of producer-dominated [as opposed toconsumer-dominated] institutions in a dependent relationship togovernment with government being by far the major provider offunds for higher education’ 6

Why academic merger? CanadaEastman and Lang, 2001 (study of two mergers in Canadian Higher Education:1997: Technical University of Nova Scotia with Dalhousie University in Halifax;1996: Ontario Institute for Studies in Education with the University of Toronto’sfaculty of Education - both were encouraged, rather than imposed, by provincialgovernments) 1980s: Public funding for universities was being reduced as provincial governments struggled to reduce their expenditures. As funding shifted from covering average costs to covering only marginal costs, colleges and universities were forced to seek other means of delivering programs. Institutional identity became more difficult to defend Some colleges and universities, especially smaller and more specialized ones, came under pressure to seek partner – usually larger or more diverse ones – to renew the potential of economies of scale Reduced public funding also forced institutions to generate additional revenues from tuition fees and other sources. In other words, it required them to be more businesslike and sensitive to the markets 7

Why academic merger? Canada (2)Striking the correct balance between:- scale- breadth- quality- distribution- economic efficiencyis the essence of the political economy of any college or university. One can argue further that inter-institutional cooperation in one form or another, including merger, is a means of recalibrating the balance in ways that would be either impossible or impractical for a college or university acting alone (Eastman and Lang, 2001) 8

Academic mergers in the United KingdomBudget cuts in the UK threatening viability of manyhigher education institutions; may lead toconsolidation pressures? – Dozens of mergers in UK higher education in recent decades – September 2011: education secretary Michael Russell outlined a review of higher and further education, calling for mergers between colleges and closer working between universitiesUniversity of Edinburgh: 6 mergers in last century – New College (during the 1930s) (organizational) – The Royal (Dick) Veterinary School (1951) (organizational) – Moray House School of Education (1998) (organizational) – The Roslin Institute (2008) (A more technical one) – Edinburgh College of Art (2011) (organizational) – The MRCs Human Genetics Unit (2011) (a more technical) 9

Timeline: pre-merger and merger periods 10

Governance vs. competence Governance Competence•Organizational knowing •Scientific/technical knowing•Meta-routines •Routines•The merger itself is an •Greater cognitive distanceexploratory act (radical across competenceorganizational innovation / communitiesdisruption), but•At the practice level, it is •Exploration: interdisciplinaryabout exploitation work•More intended outcomes •More emergent outcomes 2011 Knowledge-Based Businesses 11

What is organizational governance about?If an organization is a community of communitiesand knowledge (or knowing) defines its identity, thengovernance can be understood as coordination ofknowledge sharing (knowing recreation) amongthose communitiesThe coordination role of the organization consists inmanaging cognitive distance between its members – Sometimes reduces this distance (by establishing common language) – Sometimes helps members to cross the distance (by translating) 2011 Knowledge-Based Businesses 12

Four key processes in recreating knowingOrganizational•Replication•ArticulationScientific / technical•Integration•Combination2011 Knowledge-Based Businesses 13

ReplicationSimple duplication of routines from oneorganization to another•In this case, university procedures replicated in artcollege•Ideally suited for codified, explicit knowledge•But sometimes there are attempts to replicateprocedures with much tacit content•This leads to problems2011 Knowledge-Based Businesses 14

ArticulationWhen the procedures of one organizationincorporate a high level of tacit knowledge andhave no equivalents in the other, they must bearticulated before replication can occur•In this case, occurred in case of art collegeprocedures that university was unfamiliar with•Examples: standardization, classification, andnaming2011 Knowledge-Based Businesses 15

IntegrationIn a situation in which a common language alreadyexists, academics from differing disciplines cancooperate and build joint institutional structure•Occurs where there is history of previouscollaboration•Can occur in the merging of departments orcreation of multidisciplinary schools (in this case,one example was the school of architecture andlandscape architecture that was formed 2 yearsbefore the merger)2011 Knowledge-Based Businesses 16

CombinationBricolage: Most entrepreneurial, but also mostcomplex and time consuming of the four processes•Here, knowledge is highly tacit and itscommunication across disciplinary communitiesparticularly difficult•Difficulty exacerbated by link between sense oforganizational identity and unique character ofknowledge•(Level of departments rather than wholeinstitutions)2011 Knowledge-Based Businesses 17

Take-aways•Challenges – and in fact the way the very nature ofthe merger is seen – will be different for universityadministration and academic faculty•It will be very tempting for administration to seemerger solely in terms of (the very mundane)replication / harmonisation of codified rules andprocedures•But this will not result in realisation of full potentialfor synergies and creation of new organisationalidentity emerging from interdisciplinary cross-fertilisation⇒ Risk of “failure”2011 Knowledge-Based Businesses 18

Obrigado Q&Q&Q2011 Knowledge-Based Businesses 19

Knowledge Exploitation and Exploration in a Higher Education Merger: A Performative view

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Knowledge Exploitation and Exploration in a Higher Education Merger: A Performative view Presentation Transcript