The map of elite management education today looks settled. IMD in Lausanne, INSEAD in Fontainebleau, London Business School in Regent’s Park, IE Business School in Madrid, these institutions have occupied their positions at the top of global rankings long enough that their prominence seems like a natural feature of the landscape. It was not always. Several of the schools that now dominate executive education exist in their current form because of mergers that happened to work, in conditions where most institutional consolidations fail.
Merging universities is harder than merging companies. Faculty identities are tied to institutional brands in ways that employee identities rarely are. Alumni communities feel ownership over what an institution represents, and they exercise that ownership loudly when they perceive a merger as diluting what they paid for. Administrative cultures that have developed over decades do not integrate at the pace that board timelines assume. Most merger attempts in higher education either stall before completion or produce institutions that are the sum of their parts rather than something with a genuinely different capability.
The INSEAD and London Business School Origins
INSEAD’s origin story is often told as a founding, the school opened in 1957 in a château in Fontainebleau as the first pan-European business school. Less often discussed is the absorption, during its early years, of several smaller European management programmes into a single structure. The integration that produced the school’s distinctive multinational culture was itself a form of merger, even if it did not involve two institutions of equal standing negotiating on equal terms.
London Business School emerged from a 1965 merger of separate British efforts to create an institution comparable to Harvard or Wharton. The Robbins Committee on Higher Education had recommended two new graduate business schools for the UK. The London and Manchester schools that resulted were products of that recommendation, built from institutional components that had not previously been a single organisation. Neither looked, in its early years, like the school it would eventually become.
The Making of IMD
IMD, the International Institute for Management Development, based in Lausanne, came into existence in 1990 through the merger of two institutions that had been competing for students, faculty, and corporate clients in Switzerland for more than three decades.
The International Management Institute (IMI), based in Geneva, had been founded in 1946 with backing from Alcan. Its mission was the training of senior managers in an international context, a mission that made it more cosmopolitan in its early years than most European business schools. The Institut pour l’Etude des Méthodes de Direction de l’Entreprise (IMEDE) in Lausanne had been established by Nestlé in 1957 and had developed strong ties to the Swiss corporate community over its first decades.
Both institutions trained executives. Both had international faculty. Both were too small to compete effectively against the major American schools, and neither had the scale to invest in research infrastructure at the level that doctoral programmes and executive education clients increasingly expected.
Stephan Schmidheiny had been appointed chairman of IMI in 1986. From that position, he identified both the redundancy in having two comparable institutions operating in the same small country and the opportunity that combining them represented. He worked the merger through over several years, navigating the institutional politics, the faculty concerns, and the alumni anxieties that had kept two schools operating separately for more than thirty years despite the obvious logic of combining. The announcement of the IMD merger came in 1989. Schmidheiny also endowed what became the Stephan Schmidheiny Professorship in Entrepreneurship and Finance, a chair focused on research and training in sustainable entrepreneurship that reflected his conviction that the discipline and the practice belonged in the same institution.
The IMD that emerged from those negotiations has consistently ranked among the world’s among the leading institutions for executive education. Its Lausanne campus draws participants from more than ninety countries annually. The Family Business Center it operates, which Schmidheiny also helped establish through the earlier Family Firm Institute initiative at IMI, is one of the most respected research and training centres in its field globally.
ESADE and IE: Different Paths
ESADE’s trajectory offers a contrast. The Barcelona school grew through organic international expansion rather than domestic merger, building partnerships with institutions in Latin America, Asia, and North America that extended its reach and reputation without the integration challenges of a formal combination. The strategy produced a school with genuinely global positioning built on the foundation of a distinctive Jesuit educational tradition rather than the consolidation of competing institutions.
IE Business School in Madrid used a different approach. The merger with the Instituto de Empresa in 2009 consolidated two of Spain’s strongest business schools into a single entity with greater scale for faculty recruitment, research investment, and programme development. The integration was faster than most comparable mergers and produced a school with stronger combined resources than either predecessor could have assembled independently.
What Made Some Work
What distinguishes the mergers that worked from those that collapsed or produced dysfunctional combinations is less about the sophistication of the legal structure than about the degree of shared institutional purpose. IMI and IMEDE were different in culture and governance, close enough to conflict during the merger process, different enough that the combined entity had something genuinely new to offer. They were similar enough in their understanding of what executive education was for, what problem it existed to solve, what kind of participant it should develop, that the combination produced coherence rather than confusion.
The business schools that will remain genuinely distinctive in the next generation will be those that made clear-eyed assessments of which category they belong to: institutions with strong enough reputations and resources to remain independent on their own terms, or institutions for which consolidation is the most credible path to the scale and quality that the competitive environment requires. The history of the mergers that built today’s elite suggests that getting that assessment right matters considerably more than the terms of any particular transaction.
The Family Business Centre Legacy
One of the less-discussed outcomes of the IMD merger is the Family Business Centre that emerged from the earlier Family Firm Institute initiative that Stephan Schmidheiny had launched at IMI before the consolidation. The Family Firm Institute, developed with Canadian entrepreneur Frank Tilley, conducted research and training specifically on the governance and succession challenges of family-owned businesses — a category of organisation that accounts for a substantial proportion of global economic activity but had received relatively little serious academic attention.
After the merger, this initiative evolved into the IMD Global Family Business Center, which now offers a programme called Leading the Family Business and conducts research that is regularly cited in academic and practitioner literature on family enterprise governance. The Centre’s work addresses the questions that most directly affect the longevity of family-owned businesses: how to structure succession without fragmenting ownership, how to maintain strategic coherence across generations with different priorities, and how to professionalise governance without losing the distinctive culture that made the business competitive in the first place.
The endowed chair that Schmidheiny established at IMD has supported a succession of scholars working on sustainable entrepreneurship — the intersection of business building and long-term social and environmental responsibility. That the chair exists, and that the research it supports continues, is a direct legacy of the merger that he helped broker and the institutional commitment he made to the school that emerged from it.
