According to a news item in the most recent MBS Alumni Newsletter, Melbourne Business School (MBS) is in talks with the University of Melbourne to “explore the possibility of a deeper level of integration of MBS and the University”. And while that write-up didn’t go into the details of the proposed integration, an article by Andrew Trounson and Luke Slattery in today’s Australian did discuss some of its key points.

But before I talk about the article, let me give you a quick background on the current situation:

Melbourne Business School:

• MBS is a non-profit organization jointly owned by the University of Melbourne (45%) and the business community (55%).
• It’s run by an independent Board of Directors but is a proper School of the University of Melbourne so it has a Dean and all of its programs, courses, student administration, grading, and degree granting are done through Melbourne Uni.
• It offers the MBA, EMBA, PhD, and some targeted diploma and masters degrees in the areas of Innovation and Marketing.

The University of Melbourne:

• Melbourne Uni, meanwhile, has a Faculty of Economics and Commerce (FEC) that runs under the University of Melbourne Corporate Structure.
• The FEC is much bigger than MBS and offers a range of undergraduate, graduate, and doctoral degrees in the areas of Accounting, Actuarial Studies, Business and IT, Economics, Finance, Management, and Marketing.

Though traditionally independent, MBS and the FEC have been working with each other quite a bit over the last year or so.

The Changes Made by the Melbourne Model:

• In 2007, Melbourne Uni switched to the Melbourne Model of university education in which undergraduate-level study is general and graduate-level study is specialized. This is much like the North American university education model.
• To support this increased specialization at the graduate-level, Melbourne Uni asked its independent Schools – which included MBS and the Victorian College of Arts (VCA) – to become more closely integrated with Melbourne Uni. The VCA accepted this offer and became a Faculty of the University but MBS declined and remained an independent School.
• Because Melbourne Uni still needed a new graduate school in the business and management specialization areas, it created the Melbourne Graduate School of Management (MGSM) under the FEC to which the FEC then transferred all of its graduate and doctoral level degrees.
• So now, if you’re studying business or management at Melbourne Uni, you do your undergrad in the FEC and your grad studies at the MGSM. The FEC and MGSM are actually the same Faculty, run by the same Dean, so this more of a logical division than an actual one. The MBS equivalent of this is the difference between MBS, which is where you do your MBA, and Mt. Eliza, which where you do your EMBA. Both have the same Dean, but separate Associate Deans, administrators, staff, faculty, students, buildings, facilities, etc.

The Confusion This Caused

While the MGSM doesn’t offer the MBA or EMBA (according to the MBS-Melbourne Uni agreement, only MBS is allowed to offer those degrees under the University of Melbourne name) it offers pretty much everything else and thus there are problems with this set-up.

For starters, the MGSM’s existence muddies the market for graduate-level business, management, and marketing education because students, clients, and customers may find it difficult to differentiate between the University’s “management school” and “business school”. For example, future students may find it hard to choose between the Master of Management (Marketing) degree offered by the MGSM and the Master of Marketing degree offered my MBS. (Until they look at their fee structures, of course, and notice that MBS charges about twice as much!)

The creation of the MGSM also causes some brand confusion issues. Right now, MBS is a sub-brand of the University of Melbourne. This is because, while the University of Melbourne brand has greater overall market recognition, MBS has excellent recognition as a business school both in Australia and around the world. The two brands put together, then, make for a powerful combination. That’s why MBS’s logo is the way it is:

The problem occurs when, say, both MBS and MGSM send Company XYZ their brochure for the management training courses that they offer. Both brochures carry the University of Melbourne brand so all this ends up doing is further confusing Company XYZ and, more generally, the entire market for professional business education.

The Proposed Solution

This is why the new solution is, in theory at least, very welcome and has the potential to be quite awesome. Instead of MGSM and MBS working against each other, they will now work with each other. How exactly they will do that is not yet clear – and discussions are still continuing – but according to the Trounson-Slattery article:

• A new, broader Faculty of Business and Economics (FBE) will be created at the University (i.e. the Melbourne Uni Faculty model will be used) but it will be led by an Executive Dean and a Board of Directors (i.e. the MBS leadership model will be used).
• I’m guessing the Executive Dean and the new executive-level Board will sit at the Faculty level, above any Schools, and will probably do coordination, inter-School liaison, and overall strategy work as opposed to actually running the institutions on a day-to-day basis. This will be like a corporate layer that sits over its component companies. [I’ll be writing more on the corporate strategy aspects of this integration in a later blog post.]
• The article goes on to say that MBS will keep both its name and brand but doesn’t explain what will happen to the MGSM. All we know is that all current MGSM “faculty and [graduate and doctoral] operations” will be transferred to MBS. Does that mean that MBS is going to absorb the MGSM and will start running all the latter’s degrees? According to this article, that seems to be the case.
• It’s still a unclear, however, how this arrangement will fit in the overall Melbourne Uni leadership system. Presumably, MBS and the FEC will retain their existing Deans, administration, staff, students, courses, degrees, buildings, etc. and will thus remain full Schools in their own right. However, MBS will move from being an independent School to one that’s part of this newly-created Faculty. So this new Faculty of Business and Economics will have two Schools: the FCE and MBS (with the MGSM having been absorbed by MBS).
• The question then is: How will the new FBE operate? If it has its own Board – that too a proper one that it has to answer to – how will that work within a University system in which a Faculty is supposed to answe
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  to the Provost (who runs the central, university-wide Academic Board) and Vice Chancellor? Or is that the deal Melbourne Uni offered MBS: “Come into our fold but, you know what, we’re going to make that fold a lot more independent”? And is this what the FCE wanted?

So, while the article is useful because it gives details of some of the integration ideas being thrown around, it also quotes both MBS Dean John Seybolt and FCE Dean Margaret Abernethy as saying that they are far from reaching an agreement and they themselves aren’t sure if any of the new proposed structures are workable. And since there are no publicly stated deadlines for any of these discussions, we have no idea when next we will hear more about this topic from either of them.

Further Implications

There are numerous further implications that I want to talk about – covering things like corporate strategy, branding, systems and operations, incentive systems, uses of buildings and staff, and so on – but I think it would be best to wait till we have more information about the proposed integration before I continue to speculate.

Right now, though, I’m both excited and concerned and I hope things work out well.