Insights
Why Thunderbird’s Merger into Arizona State University Worked
Larry Edward Penley, Ph.D.
November 1, 2026
After years of falling enrollment and poor annual financial reports, the Thunderbird School of Global Management (Thunderbird) Trustees dissolved Thunderbird’s independent corporate status. Thunderbird merged with Arizona State University (ASU). Since its founding just before the middle of the twentieth century, Thunderbird had always been a special place and everyone associated with it felt its unique “Thunderbird Mystique.” Its alumni evinced a spirit that was unmistakable in their stating, “I’m a Thunderbird.” Graduates of Thunderbird aren’t just alumni.
As a Latin Americanist who had taught in Latin American universities, I had long admired Thunderbird with its international excellence and Latin American foundation. Upon being asked to join Thunderbird, I felt like I was coming home. Like most new presidents, I believed at first that I, too, could turn things around. Sadly, it was too late. Thunderbird had already reached a point that made a turn-around nearly impossible.
Almost a decade of enrollment decline was accompanied with a $24M debt that could no longer be serviced. Thunderbird was in trouble as the 21st century dawned. Still, it had taken a decade before Thunderbird leaders confronted its plight. After all, those associated with Thunderbird loved it as it was. There had seen many signs of trouble besides the enrollment declines. Overhead was unsustainable for a small school. Bank-required financial ratios were not being met. Days of cash-on-hand were dwindling. No new faculty were being hired. Recent alumni surveys had become far less positive. All those signals should have made a difference. They didn’t – not at first.
Thunderbird still had a strong value proposition. Thunderbird remained a special place with considerable value from its long-time market position. Thunderbird was international education. It had been the first. ASU, no longer a regional school and with confident and thoughtful leadership from President Michael Crow, saw Thunderbird’s value for its own international positioning, international curriculum development and attraction of international students. Thunderbird still had a value proposition that gave it the kind of caché that was attractive to potential suitors like ASU. In addition to its distinctive market position, it had one of the leading executive education programs in the world. But waiting longer to have considered the merger would have diminished Thunderbird’s value proposition. That value proposition was the primary reason that ASU was attracted to Thunderbird, and it became the key to why the merger into ASU worked.
ASU was also determined to make the merger successful. In President Michael Crow of ASU, there was a leader who took carefully calculated risks. Dr. Crow’s staff spent time analyzing Thunderbird and its potential structural and mission-driven place within ASU. As discussions of the merger progressed, Dr. Crow and staff made visits to the campus to meet with faculty, answering difficult questions and clarifying a vision for Thunderbird as a distinctive part of ASU. President Crow’s determination, coupled with his knowledge of Thunderbird and communication gave faculty and staff hope.
ASU was patient. No business merger goes completely smoothly. It takes a willingness to wait out the initial organizational stresses and strains that are created by a merger. It takes organizational development processes to fully integrate a new unit. It takes financial investment to turn around a previously poor performing acquisition. ASU’s patience and its approach did not resolve all issues, but they helped enormously. Reconfiguring the curriculum and the names of programs to capture its historic positioning was a very good start. But investing the money to hire new faculty was also a part of the story of the success of the merger.
Conclusion. So, what made the ASU acquisition of the Thunderbird School successful? First, ASU was not looking for a land deal, despite Thunderbird’s real estate holdings. ASU saw in Thunderbird a complimentary addition to its own mission. Secondly, the acquirer, in this case ASU, worked closely with Thunderbird to reassure faculty and staff and to provide hope. Thirdly, ASU recognized that allowing Thunderbird to remain a quasi-independent school with ASU support benefited both ASU and the Thunderbird School at ASU.
Finally, and this may be most important for a small- or medium-sized school; Thunderbird did not wait longer to find a suitor. It sought a partner when Thunderbird still had important assets that attracted ASU and other potential acquirers. Its brand, while tarnished from an earlier, failed merger attempt, still represented something that others thought valuable. Its programs, students, and faculty were still far more international than almost any other school of its type. And Thunderbird’s alumni were perhaps the most engaged of any other institution’s alumni. If Thunderbird had waited longer, some of these valuable assets would have deteriorated even more, making a merger far less likely.