Thunderbird Finds A Partner In Nearby ASU

Thunderbird

Thunderbird

After an aborted attempt to merge with a for-profit education company, the financially-troubled Thunderbird School of Global Management has apparently found a new lifeline to secure its future. Arizona State University and Thunderbird today (July 3) announced they have reached a preliminary agreement to merge.

Under the terms of the deal, which could become final by the end of July, Thunderbird would become part of ASU and be called the Thunderbird School of Global Management at Arizona State University. Additional cutbacks at Thunderbird are likely. Thunderbird lost $8.7 million in fiscal 2013, more than twice as much as it had lost a year earlier.

An early pioneer in creating a truly global MBA education, the school’s distinctiveness has been greatly diminished as other business schools have become more international. Applications to the school’s flagship MBA program have plunged by nearly 75% in the past 15 years.

THE NEW AGREEMENT FOLLOWS THE COLLAPSE OF AN EARLIER DEAL WITH LAUREATE

The proposed merger agreement with ASU follows the collapse of an earlier agreement between Thunderbird and for-profit Laureate Education Inc. amidst considerable controversy from some Thunderbird alumni who aggressively opposed that deal. They argued that it would cheapen the Thunderbird brand through its association with a for-profit education provider. The earlier agreement fell apart after the Higher Learning Commission, an accreditation agency, declined to extend Thunderbird’s accreditation to the proposed joint venture.

The new deal will likely run into opposition from an alumni group that calls itself the Thunderbird Independent Alumni Association. Officials of that association met with members of Thunderbird’s board of trustees in San Francisco in late April but little came of the session. Among other things, the independent alumni group demanded board seats that would give it control of the board. “According to TIAA, these demands are a condition for further discussion on their involvement, support for, or endorsement of a strategic partner,” according to a statement from the board of trustees.

Under the terms being discussed, many existing Thunderbird degree and executive education programs and a number of new educational programs would be offered by the Thunderbird School of Global Management at Arizona State University as early as the fall 2015 term, the schools said. At the same time, students currently enrolled at Thunderbird and those enrolling in fall 2014 would continue to complete the Thunderbird degrees in which they initially enrolled. The current and new programs would be offered by members of the current Thunderbird faculty who will become members of the ASU faculty, with the offerings supplemented by ASU with complementary expertise. The reorganized program offerings are subject to review by the Higher Learning Commission, ASU and Thunderbird’s accreditation agency.

‘A BIG MOMENT IN THUNDERBIRD’S HISTORY’

“This is a big moment in Thunderbird’s history and we are excited by the significant opportunity it represents to join with one of the world’s most innovative universities,” said Thunderbird President Larry Penley in a statement. Penley had been dean of ASU’s W.P. Carey School of Business from 1985 through 2003. “Both institutions share compatible missions and a strong commitment to global impact which can energize us both.”

“This merger offers significant advantages to both institutions,” said ASU President Michael Crow in a statement. “Through the integration of Thunderbird with ASU, the Thunderbird historic global education vision will be sustained and extended, students at ASU and Thunderbird will have access to more courses and programs, ASU’s executive education programs can be broadened and expanded, and financial efficiencies will be created.”

Thunderbird programs can be operated using ASU core support and administrative services at a lower cost than Thunderbird can maintain such services itself, added Crow. Existing ASU undergraduate programs and new ASU undergraduate programs can serve as a pipeline of students for Thunderbird programs, expanding enrollment and providing new opportunities to ASU’s students.

Under the letter of intent, Thunderbird and ASU said they would work to restructure faculty and staff operations to make Thunderbird a unit of ASU. “Personnel reductions are likely to result, with the goal of making the new Thunderbird school self-sustaining within ASU so that no current or new state appropriations or existing tuition will be required,” according to the announcement. “The nature and scale of the reductions are still being studied.”

DON’T MISS: THUNDERBIRD: ‘A LAUGHING STOCK’ or THUNDERBIRD: A CASE STUDY IN ORGANIZATIONAL DECLINE

About The Author

John A. Byrne is the founder and editor-in-chief of C-Change Media, publishers of Poets&Quants and four other higher education websites. He has authored or co-authored more than ten books, including two New York Times bestsellers. John is the former executive editor of Businessweek, editor-in-chief of Businessweek. com, editor-in-chief of Fast Company, and the creator of the first regularly published rankings of business schools. As the co-founder of CentreCourt MBA Festivals, he hopes to meet you at the next MBA event in-person or online.