All Star University The Product Of A Government Sponsored Amalgamation Between T

All Star University, the product of a government-sponsored amalgamation between the prestigious 115-year old Sandstone University (SU) and the 20-year old Redbrick Institute of Technology (RIT), is facing great financial difficulties, having lost more than $10 million in the last financial year. SU had a traditional academic emphasis, which was reflected in its courses of study. Its graduates mainly entered academia, the public service, banking and consulting. In contrast, RIT offered applied programs of study oriented to the needs of business, with its graduates going into a diverse range of private sector industries.

As part of the amalgamation the School of Economics at SU was combined with the School of Business at RIT. The School of Economics (SU) taught economic theory, economic geography, economic history, statistics, mathematical economics, labour economics and industrial relations. Student demand for its courses (especially in economics and industrial relations) had been in long-term decline. Students, governments and local businesses have been pressuring the school to introduce more business-oriented subjects into the curriculum. Reflecting its different background and focus, the School of Business at RIT offered majors in finance, marketing and HRM.

The School of Economics (SU) employs 35 academics and has 700 students who are predominantly young and study full-time (the average age is 21) while RIT students are made up of both full-time (65% of the student population) and part-time mature-age students (the average age is 33).

The staff of SU are highly academically qualified (90% hold a PhD) and they perceive themselves as research-oriented academics. Academic qualifications and research publications are prized over practical business experience and teaching ability. The majority are members of the left-wing Tertiary Academic Union (TAU). Employment terms and conditions are determined by a collective agreement negotiated by the Union and the University. 85% of the staff have tenure (long-term appointment). Pay is determined by seniority and all employees in the same classification receive the same rate of pay. The academic staff of SU remain angry at having to merge with a teaching university where the focus is now being placed on costs and student performance. Fears that job security, academic standards, research output and prestige within the community will suffer are common among the staff.

The staff of RIT numbering 28 are less qualified academically – only 40% have a PhD and only 20% have tenure. Staff are employed on individual contracts varying from one to three years in duration. Most RIT staff have had extensive business experience, take great pride in their reputation for teaching excellence and aim to prepare their 1,000 students to go into “the real world”.

The staff of SU are generally regarded as being too theoretical and divorced from the needs of business. The courses at RIT have proved highly popular with students and the local business community and its graduates are in high demand. Less than 50% of the academic staff at RIT belongs to a union. Those that are union members belong to the right-wing Australian University Teachers Union (AUTU) which is a bitter rival to the Tertiary Academics Union (TAU). Private consulting is encouraged and this along with a performance-related pay system means that it is possible for top-performing RIT academics to earn incomes significantly higher than those traditionally paid to SU academics.

It is anticipated that the newly created School of Business at All Star University will need to reduce its academic head count by 20% if it is to meet the proposed budgetary guidelines.

Source: Stone, Raymond J. 2010, Managing Human Resources (3rd ed.). Milton. QLD: John Wiley & Sons.

Question 1:

As a HR consultant to the All Star University, identify THREE core HRM issues/problems that could be expected to arise from this amalgamation.

Question 2:

Provide recommendations to the management on strategies and practices that may help to prevent or overcome each of the THREE issues/problems identified in Question 1.

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