The combination of the University of Medicine and Dentistry of New Jersey (UMDNJ) and Rutgers University in 2013 is the largest higher education merger in U.S. history. Based on extensive interviews with participants and archival research, we analyze factors that accelerated or decelerated the integration of the two universities over the period 2012-2018. This integration highlights the importance of balancing standardization with recognition of the distinctions between units, and helping people to form a shared identity in the combined organization.
|Original language||English (US)|
|Number of pages||21|
|Journal||Rutgers Business Review|
|State||Published - Sep 1 2019|
All Science Journal Classification (ASJC) codes
- Business and International Management
- Strategy and Management
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TY - JOUR
T1 - Merger of equals? The path toward the integration of New Jersey’s largest universities
AU - Miller, Douglas J.
AU - Golembeski, Cynthia
N1 - Funding Information: acquiring firm will conduct due diligence prior to finalizing an offer for the target firm. This period of intense examination is meant to uncover any surprises and lead to a fair valuation. In the case of the Rutgers-UMDNJ integration, Rutgers’ attempts at due diligence were constrained by the fact that most of the transferred assets were only added to the mix in the few weeksleadinguptotheactpassingthelegislature,andwhileUMDNJ’sbooks were public, due diligence involves more than an examination of financial statements. Companies performing due diligence commonly assess risks, relatedpartytransactions,outstandinglitigation,humanresources,material contracts, and many other aspects of a business. Via McCarter & English, financialconsultants,RutgersrequestedthoroughrecordsregardingtheNew Brunswick UMDNJ schools in early ? ? ? ?. However, UMDNJ leadership was focused on negotiating with the state about their future funding and scope, and were reportedly reluctant to pore through records so as to pull out information on everything from debt to vehicles to lists of employees that would only pertain to those few schools. Thus, in this case, the integration periodfromthesigningofthelegislationuntilDayOneprovidedopportunity for such assessments of all transferred units, but they were not completed prior to the legislation being signed. The surprise that RWJMS was running a multi-million-dollar deficit is described in the companion case study. Informationlatercametolightrevealinginitiallackofunderstandingabout UMDNJbyRutgers’leadershipintwoadditionalareas:perceptionofquality, andrequirementsforIT-enabledcommunications. Since some of the New Brunswick medical faculty had research ties to Rutgers over the years, the perception across Central Jersey was that Robert WoodJohnsonMedicalSchool(RWJMS)wasa“crownjewel”ofUMDNJ.This reputationextendedto,andarosefrom,theSchoolofPublicHealthandthe Cancer Institute of New Jersey, both of which started at RWJMS. People at Rutgers-NewBrunswickwhosoughtthetransferonlyoftheNewBrunswick schoolsofUMDNJlookedfor,andfound,areasofexcellencethere.However, integrationleadersincludingChrisMolloyandBrianStromstatedthatthey weresurprisedtolearnhowexcellentsomeresearchersandcliniciansatNew Jersey Medical School actually were. Other academic units had specialized degreeprogramsthatwereamongthebestinthecountry,suchastheSchool ofHealthProfessions(SHP)PhysicianAssistantprogram.Researchwasalso strongatthePublicHealthResearchInstituteandamongUMDNJ-affiliated faculty at inter-university centers: The Center for Advanced Biotechnology and Medicine, the Environmental and Occupational Health Sciences Institute, and the Institute for Health, Health Care Policy, and Aging Research.Someofthesestrengthswererecognizedintimetobeincludedin Strom’s first Strategic Plan, published in ????, but Rutgers and RBHS leadershipcontinuedtolearnmoreaboutpeopleandprogramsinlateryears. Both Rutgers and UMDNJ were typical, large state universities: research and curriculum might be cutting-edge, but the infrastructure had weaknesses. Insiders speculate that politicians, consultants, and the general public assumed one university was pretty much like another (R ? ). This did not mean, however, that the two universities matched up for easy combination. Prior to the integration, UMDNJ was highly decentralized. EachschoolintheuniversityhaditsownCFO,admissionsofficers,registrar, and facilities management staff. The central administration in Newark oversawmajorITsystemsandfinancialdecisions.Also,duetofinancialstress and a lack of growth while under the federal monitor, UMDNJ hadn’t installed expensive new systems, constructed new buildings, or done major renovations of other space in several years. Rutgers ostensibly had a more centralized organizational structure, because, under a single accreditation, the president’s administration served the New Brunswick, Newark, and Camdencampuses.However,partlyduetoshrinkingstatecontributionsover the previous two decades, as of ? ? ? ?, Rutgers also comprised a collection of older buildings and various IT systems. Upon arrival, President Barchi initiated a physical master plan as part of the strategic planning process, resultinginthefirstnewbuildingssince ??????. Rutgers found it could not simply fold UMDNJ data and operations into its existing financial and IT systems. Functional integration committees ran into problems with employee and student records, email, and grants management (Archives). For instance, UMDNJ used the Banner ERP, while Rutgers had its own internally-designed suite called RIAS (for Rutgers Integrated Administrative Systems), which incorporated PeopleSoft (from Oracle).InthemonthsleadinguptoDayOne,ITadministratorsatthetwo universities vied over ethical and efficient ways for UMDNJ to share confidential employee and student information with Rutgers. Rutgers IT architects initially wanted to add UMDNJ accounts to its existing services, but soon heard objections because the UMDNJ system had email filters and protocolsforhandlingprivatemedicaldata(underHIPAAstatutes),whereas those features were lacking in the Rutgers system. At Day One, the Rutgers systemdidnotalwaysrecognizestudentsimmediately(Hamilton).?A?mong “painpoints”recalledbystudentservicesstaffweredelaysofafewdayswhen legacyUMDNJstudentsfirstwenttotheRutgersdininghallorparkingoffice and were not recognized by the system. Incoming students might have to providewrittenproofthattheyhadbeenacceptedtooneoftheRBHSschools to get help regarding residence halls or other campus amenities. UMDNJ leadershiphadseenthemselvesasprovidinga“concierge”levelofserviceto students,partlyasa wayoftraining thestudentsonhowtotreatpatients.?? WiththesizeandgeographicdispersionofRutgers,studentsfelttherewere now more barriers to getting questions answered. Throughout the campus, faculty and staff stayed late, reviewed records, hand-entered information into databases,metwithstudentstoreassurethem,andensurednoserviceswere missedforveteransandstudentswithdisabilities(Hamilton;R??,R??).,R?? A similar glitch came a few years into the integration, when the entire university switched email systems. Overnight, all listservs were gone, and had to be recreated by hand so faculty and program directors could reach students (R ? ). UMDNJmanagedresearchgrantspost-awardthroughtwooffices,onein Newark and one in New Brunswick, and each school kept its own database of proposals and clinical trials. A UMDNJ administrator explains, “You had differentpeopledoingit.Everybodyhastheirowninterpretationofthisdata or that data or what you ?re supposed to put in this field [and] some people are just better record keepers than others” (R ? ).? Rutgers-Newark and Rutgers-CamdenalsohadseparategrantsmanagementofficesfromRutgers-New Brunswick. This complexity—and the volume of grants that needed to berevisedtoaccountforthefactthatUMDNJwouldnolongerexist—created a situation in which many researchers had no access to funds at Day One. Clearing up legal and accounting issues took months, including for grants from the NIH (R ? ). ? The problems with grants management at Day One illustratehowinformationsystemsthatareinefficient,orjustcustomizedto different requirements, can exacerbate financial, interpersonal, and interdepartmental tensions in a merger. These frictions gave occasion for peopleatbothuniversitiestoquestionthecompetenceandtrustworthiness ofthoseontheothersideofthetable. Funding Information: This research is in response to a call for proposals from The Nicholson Foundation and Rutgers Biomedical and Health Sciences (RBHS), and is funded by The Nicholson Foundation. We created a list of deans, administrators,keyfaculty,long-timestaffmembers,andothersinvolvedin the integration. Most agreed to be interviewed, and some suggested additional people, whom we then contacted (snowball sampling). In all, we interviewed ? ? individuals, mostly current employees of RBHS or Rutgers University. More than half were in influential positions at UMDNJ prior to the integration. Respondents included approximately the same number of menandwomen,andwerebalancedbetweenfacultyandstaff,andbetween Central and Northern New Jersey. Interviews were conducted face-to-face, generally ? ? to ? ? minutes in length, following a protocol approved by the Rutgers-New BrunswickIRB. Most subjectsagreed to an audio recordingof the interview, and all responses were kept confidential. No complete list of interview subjects is made public; however, some are identified in various articles. When we wished to rely on unique information from a respondent or quote them by name or role, we secured their written permission. Unnamedsourceswereassignedarandomnumberforidentificationinprint (e.g., R ? fo? r respondent ? ?). We supplemented and verified interview data with research from university records, publications, and websites, and search ofgovernmentrecordsandnewsarticles.?? Publisher Copyright: © 2019, Rutgers Business School. All rights reserved.
PY - 2019/9/1
Y1 - 2019/9/1
N2 - The combination of the University of Medicine and Dentistry of New Jersey (UMDNJ) and Rutgers University in 2013 is the largest higher education merger in U.S. history. Based on extensive interviews with participants and archival research, we analyze factors that accelerated or decelerated the integration of the two universities over the period 2012-2018. This integration highlights the importance of balancing standardization with recognition of the distinctions between units, and helping people to form a shared identity in the combined organization.
AB - The combination of the University of Medicine and Dentistry of New Jersey (UMDNJ) and Rutgers University in 2013 is the largest higher education merger in U.S. history. Based on extensive interviews with participants and archival research, we analyze factors that accelerated or decelerated the integration of the two universities over the period 2012-2018. This integration highlights the importance of balancing standardization with recognition of the distinctions between units, and helping people to form a shared identity in the combined organization.
UR - http://www.scopus.com/inward/record.url?scp=85078473971&partnerID=8YFLogxK
UR - http://www.scopus.com/inward/citedby.url?scp=85078473971&partnerID=8YFLogxK
M3 - Article
AN - SCOPUS:85078473971
VL - 4
SP - 140
EP - 160
JO - Rutgers Business Review
JF - Rutgers Business Review
SN - 2474-2376
IS - 2