Members of the Irish Management Institute (IMI) gather for the annual outing in Killarney this week-end in ebullient mood. The scene has been set by its last annual report when it proclaims "the institute can take some pride in its unique contribution to the shaping of today's economy".
How does that comment shape up with the perception that the IMI, facing strong competition from business schools, is now a much less relevant organisation. And that it has only remained in existence with hand-outs.
Perceptions can be hard to erase. The IMI had indeed been perceived as a dying organisation and with the petering out of handouts from the Department of Labour and the European Social Fund, it almost expired a few years ago. Indeed, some had perceived it as a cosy irrelevant club with its own venerable members being bestowed with the grand badge of fellowship.
The IMI did carry out an important role in the past by providing management sustenance to an embryonic indigenous industry. But as it grew it needed a refocusing and faced with the unpalatable prospect of financial oblivion, it knocked itself into shape. It did this by cutting its costs, refocusing its activities on generating more income and making its training packages more relevant. The fruits from this exercise is apparent in IMI's accounts over the past two years. It can rightly describe itself as a financially independent training group. Equally important, the income from its management development programmes is rising. This income amounted to £5.55 million in 1994/5, rose to £6.08 million in 1995/6 and to £6.86 million in 1996/7.
Membership subscriptions, however, have remained virtually unchanged at £0.89 million. The IMI explains that this has remained static because the fees have remained unchanged. The number of members has fallen from 1,806 to 1,793. This, the IMI contends does not represent a contraction; rather a refection of the number of mergers which have taken place and these have reduced the number of member firms.
IMI is a non-profit making company, limited by guarantee with no share capital. It is owned by its members and one wonders if this structure can stand the test of time. Non-profit making organisations can work well in a rising economy. But when the cycle turns and demand contracts, a non-profit organisation is bound to be more vulnerable. In that scenario it would have to either reduce costs and/or tap its members for more funding. Despite IMI's good performance last year, its net profit amounted to just £113,000. It has, however, a national management research foundation fund account with a balance of £461,000 in 1996/7 which is expected to be boosted further.
And its balance sheet shows net assets of £2.5 million. This totally undervalues the group. It has, for example, its premises on 11 acres at Sandyford, Dublin which are valued at cost at only £1.2 million. When the IMI was under a critical glaze a few years ago there were calls for it to merge with the Institute of Public Administration (IPA). Both were involved in training; IMI training for industry, IPA training for the public service. Share the overheads, reduce costs and have a more viable grouping, the merger promoters argued.
This argument is just as valid today, but with a difference. IMI is now the much stronger operation and it would be the more dominant party in any amalgamation. While the IPA has also been moving in the right direction by reducing its dependence on a government subsidy - this has fallen from about 40 per cent of income to 24 per cent in 1996 - it is still very dependent on this hand-out for it existence. And unlike IMI, the IPA is a State company.
IPA's latest results show a rise in fee income from £3.1 million ion 1995 to £3.7 million in 1996. Sales of publications - a very important and growing area - rose from £456,000 to £541,000. The grant from the Minister for Finance amounted to £1.37 million. This hand out helped the operating surplus to rise from £81,030 to £227,770.
Like the IMI, its assets are totally undervalued. It owns 49/51 Landsdowne Road which are valued at cost at only £637,792. The Minister for Finance could cut this persistent funding by putting IPA up for sale. The IMI which has initiated a programme of workshops with the top echelon of the Civil Service would seem be the ideal partner for the IPA. That would represent a practical step to its Killarney theme "sustaining success in a changing world".
