The Impact of Mergers and Acquisitions in Higher Education and Challenges Faced : A Review of the Literature

When two firms consolidate to form a new conglomerate, this is commonly known as a merger. When a firm acquires a new firm and retains the name, identity, and assets, this is what is known as an acquisition. Mergers and acquisitions (M&A) have taken place throughout American history. Industries such as hospitals, business corporations, and educational institutions have joined forces for various reasons – both friendly and forcefully - to expand their growth opportunities. The transformative environment of higher education dictates that progressive institutions consider mergers and acquisitions within the confines of rebranding to improve organizational sustenance. Past researchers have studied and tested the theoretical framework to assess the acculturation of merging two academic establishments into one firm. In the past decade, M&A has become more prominent in non-profit and higher education arenas. The research shows that both friendly and hostile takeovers have legal, cultural, and economic consequences in both the business and academic fields. This paper will explore the challenges and the impact of M&A on higher educational institutions, and we will seek to investigate if the effects of M&A impair or improves the overall performance of the organization.