Lessons from the Thunderbird-ASU Merger

Larry E. Penley

September 22, 2026

Before mergers and acquisitions (M&A) became a daily occurrence for America’s colleges and universities, Thunderbird School of Global Management began its own process that led to a successful merger into Arizona State University (ASU). The merger almost didn’t happen. And Thunderbird could have become one of those distinctive American colleges to have disappeared.

No single force drives the need for a college merger. There were numerous ones that drove Thunderbird to a merger with ASU. Since its founding just before the middle of the twentieth century, Thunderbird had been an international school. It primarily served Americans who wanted to live abroad or serve in internationally related positions in business and government. Its budget had always been limited. Its tripartite curriculum of business, language and international studies was its hallmark. It was the international school of business. But that strong position began to erode as highly ranked business schools recognized the importance of international education and added international curricular initiatives in the last decade of the twentieth century.

Faced with increasing competition and threats to its enrollment and viability, its board and leadership made the decision to directly confront the growing competition and become more of a business school rather than just an international school. That meant deemphasizing especially language training and increasing an emphasis on hiring business school faculty. There were many good reasons for these changes, including the media’s focus on successful MBA programs from top-ranked business schools. But in making the changes, competition grew further with Thunderbird now positioned as a direct competitor of business schools that offered the MBA degree rather than Thunderbird’s unique Master of International Management, the MIM.

With an increasing focus on recruiting non-U.S. students, Thunderbird now confronted disruptions in international student enrollment that steadily grew in their impact. Along with becoming more of a traditional business school, Thunderbird’s board and leadership built new local facilities. To give Thunderbird a truly global presence, Thunderbird also opened facilities in multiple locations around the world. With these initiatives Thunderbird faced increased labor expenses for more expensive business school faculty along with major capital expenses that sometimes failed to provide a ROI.

As the first decade of the 21^st century ended, the President and Board of Trustees recognized that Thunderbird’s debt, its negative annual financial results and its declining enrollment made the future treacherous. The Board of Trustees hired me to be its President during its last years of independence while Thunderbird seriously pursued a partner. During the decade after my presidency of Thunderbird, I have reflected on the lessons that we can learn from Thunderbird’s merger. There are many lessons. Those lessons remain instructive for other institutions that face similar declines in enrollment and financial distress. Others are lessons that we can take from Thunderbird that will help in avoiding pitfalls that Thunderbird faced as an early case for a merger. Here are a few of the many lessons.

Lesson one: Engage board, academic leadership and faculty early. During early board and leadership discussions, faculty were left out. With their focus on students and scholarship, faculty were naturally not confronted with the peril that Thunderbird faced. With very limited information about the thinking of president and board, the usual campus gossip filled the vacuum. Communication among faculty, staff, board and president improved as the process proceeded. But early restrictions on communication had failed to set the stage for a change and had invited unnecessary stress.

Lesson two: A Change Management Process is essential. A strong, clearly communicated case for change is the first step in a change management process. Faculty, staff and alumni have no reason to suspect that the institution is under severe stress. A change management process initiates the “unfreezing” that is essential for acceptance of a major change like a merger or acquisition. Thunderbird undertook a change management process later in the process. It should have come much earlier. With an earlier process, some of the negative media attention and the alumni’s negative reactions to the merger could have been mitigated.

Lesson three: Board support and clear objectives are essential. Despite Trustees’ substantial experience with M&A, a clear process with objectives was not laid out early on. While it may not have been the cause for trustees’ stress and defections, the internal confusion and turmoil slowed the process. The result was loss of some potential opportunities early in the process along with some members’ distress about potential partners.

Lesson four: Assign an internal staff person as liaison. A long-time Thunderbird staff person who was also an alumna was named as the primary liaison to potential partners, with the data bank and with various internal constituents. She also maintained the project management timeline that was essential to the success of the process. The choice of a single known person did not cure every problem. It did quiet dysfunctional gossip. It gave everyone a point of contact, making the process smoother.

Lesson five: Engage the faculty with the potential partner. With a likely successful partner in the process, Thunderbird engaged faculty directly with the potential partner. This part of the process permitted fears to be addressed and questions to be answered. While it never could have resolved all anxiety, this part of the process took major steps toward making the final merger successful.

Lesson six: Hire an advisor. During the M&A process, Thunderbird depended on its own internal resources: its knowledgeable and experienced trustees and internal staff. Though knowledgeable and experienced, none had ever been through a merger of higher ed institutions. No group like ELM2 Advisors was hired. Few like it existed at that time with the academic, M&A and financial expertise of ELM2 Advisors. Some of Thunderbird’s missteps and its internal stresses and strains could have been avoided or mitigated with an advisor like ELM2 Advisors.

Thunderbird’s merger into Arizona State University is a success. Enrollment has increased. New facilities are far more functional. Faculty numbers have increased. Financial success is on the horizon. The decision to pursue a merger was the first step toward this success.