The organisational determinants of success for
delivering fee-paying graduate courses
Stuart Orr
Senior Lecturer, Department of Management, Monash University, Australia
KeywordsHigher education, Graduates, Management, Fees
Abstract
The literature identified fee-paying education as one of the fastest growth industries in the world ± it is a global industry from which many industrialised countries, such as Australia, are well positioned to benefit. At this stage, little conclusive evidence exists that identifies howsuch enterprises should operate, although many universities around the globe have already made a considerable investment in fee-paying graduate education and rely heavily on the income it generates. The literature suggests that few, if any, excel in the best practices associated with this type of education. The research also identified a set of best practices that apply specifically to fee-paying graduate education that can be grouped in a number of categories.
Introduction
This paper presents the findings of the first stage of a project conducted to identify the organisational determinants of success in the provision of fee-paying graduate courses. The literature identified fee-paying education to be one of the fastest growth industries in the world (Ellis, 1996;La Monica, 1996), a global industry (Anon, 1996) and one from which many industrialised countries, such as Australia, are well positioned to benefit (Alexander and Rival, 1993;Emery, 1987;Birt, 1985). At this stage, little conclusive evidence exists that identifies how such enterprises should operate (Swope, 1994);however, many universities around the globe have already made a considerable investment in fee-paying graduate education and rely heavily on the income it generates. The literature suggests that few if any excel in the best practices associated with this type of education.
The literature also identified a set of best practices that apply specifically to fee-paying graduate education that can be grouped as follows:
. facilities;
. financial management;
. institutional image and reputation; . marketing;
. disciplines offered;
. agents and agencies utilised;
. community and commercial support and participation;
. management of local legislation; . teaching practices;
. administrative coordination;
. staff competencies and backgrounds; . administrative flexibility;
. student-academic relationships; . accommodation and other services.
Methodology
The question adopted for the research was, ``What are the key determinants that lead to success in fee-paying accredited graduate studies for tertiary education institutions?''. The procedure adopted for the research was to conduct a detailed analysis of the
literature and compare the findings of this analysis with seven case studies, prepared from interviews with fee-paying course directors in Australia, the UK, the USA, Germany, Japan, Singapore and the Middle East. Over 1,000 articles were collected from the literature that presented opinions, case studies and the results of statistical surveys on graduate fee-paying and related
education. The literature was also drawn from publications designed for three specific users:
1 Tertiary education and higher learning services.
2 Commercial training.
3 Small business and education.This latter group is relevant from both the
perspective that fee-paying graduate studies are delivered from organisations or parts of organisations that often operate as small businesses, as well as the fact that the majority of businesses in Australia's catchment are small and that this area represents a substantial
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The International Journal of Educational Management 14/2 [2000] 54±61 #MCB University Press [ISSN 0951-354X] Keywords
Higher education, Graduates, Management, Fees
Abstract
opportunity for this service (Ezzeddine and Holand, 1996;Dudleyet al., 1995).
Once the literature was collected it was reviewed and all relevant extracts identified. These extracts were then entered into a data-base and coded using the qualitative data coding tool, NUD-IST. This software was used to identify the themes that ran through the diverse range of literature that was reviewed. A ``relationship tree'' was established to structure the coding, which was based on the best practice categories identified earlier in this paper. It contained three main levels of hierarchy, two broadly differentiated groups of data and 30 main categories. This level of complexity is to be expected when
considering the determinants of success for a service that can support an entire
organisation/business activity, which must serve a highly varied range of customers and which attracts customers globally.
The key findings of the analysis of the literature, which included the relationships between the key activities of the organisation and the institutional outcomes for graduate fee-paying courses, were then compared with the case studies to identify the reasons for the relationships and solutions to the conflicts identified in the literature. Ten informal follow-up interviews were also conducted with currently enrolled fee-paying graduate students at the author's institution to verify the conclusions drawn from this research.
Findings
To structure the presentation of the research findings, the key activities that a graduate fee-paying education provider can control that were identified in the literature analysis were condensed into five basic groups. Each group will now be examined in relation to the comments, findings and observations provided by the literature reviewed. While occasional citations of particularly relevant literature sources have been included in this discussion, the literature has been utilised as a primary data source for this research and, accordingly, the individual literature sources have not been repeatedly cited so as to maintain the continuity of the discussion.
Teaching practices, staff competencies and backgrounds, disciplines offered and student-academic relationships
Teaching practices, staff competencies and backgrounds, disciplines offered and student-academic relationships were the most frequently identified group of practices relevant to students with the service
expectations of graduate fee-paying students.
The literature identified the fact that graduate fee paying students have a significantly higher level of service expectations than low or non-fee-paying students (e.g. Fram and Camp, 1995). To meet the expectations of graduate fee-paying students, it is necessary to align these practises with current education best practice (Allerton, 1996). The commercial education literature was the most frequent source of examples of best practise in this area, which included the use of leading-edge technology, selection of teaching staff with a genuine competency in the area being taught and an interest in pedagogy and programs that reflect the functions that the
participants are likely to be involved in at some stage in their career (Samson and Weiss, 1995;Macfarlane and Lomas, 1994). All sources of literature (e.g. Sundman, 1996) concluded that the adoption of leading-edge practises such as these is vital for long-term success in the graduate fee-paying education industry. From a strategic management perspective, this finding indicates that academic performance measures for staff involved in graduate fee-paying education must include a significant teaching
performance component to be determined by the students. A minimum requirement for these performance measures should be an analysis of student teaching and course design feedback for every graduate class. The interviews indicated that teaching
performance and relevance should be the first priority for this type of tertiary education provider if it wishes to maintain its market share in this competitive global environment, where flexible delivery modes overcome all geographical and cultural barriers.
For example, Ali and Camp (1995) determined that, while the Arab world has witnessed quantitative growth in a number of higher education institutions, an
examination of the curricula of eight universities operating there determined that there was a lack of locally relevant subject material. The potential rate of growth of fee-paying education there can only be
harnessed when the course material becomes relevant to the needs of the participants (Macfarlane and Lomas, 1994). Given the total number of institutions offering fee-paying graduate education in this area (the author identified over 50 such education providers in the Middle East in 1993), this is a significant lesson.
Stuart Orr The organisational
determinants of success for delivering fee-paying graduate courses
Facilities, accommodation and other services
The literature analysis identified the fact that the standard of the facilities,
accommodation and other services offered, are of particular significance to fee-paying graduate students. Interestingly, the literature analysis also identified the fact that facilities, etc., were not considered highly important by non-fee-paying course focused tertiary education institutions and the attitude toward facilities, etc., of graduate fee-paying education providers in the case studies and literature analysed seemed to vary considerably. The case studies did indicate that the student's expectations developed in the workplace from participation in commercial training programs (even if they were non-accredited) and that the standard of facilities that the student, had come to except as part of their normal work-life, would lead students to judge the quality of the course on the basis of the amenities, technology and aids to learning provided. The interviewees in the follow-up case studies also noted that the perception of the quality of the course is influenced by the student's level of participation and satisfaction with the course.
In the special case of residential students, such executive program participants, or students who have temporarily moved from another country to study full-time, the literature noted that they would have a very high level of expectation of the facilities provided. This was found, in part, to be owing to the substantial time and financial commitment made by these students. Consequently, their perceptions of the quality of the course and consequently their level of participation would, therefore, be
influenced by the suitability and standard of accommodation and faculties provided.
Institutional image and reputation, marketing, agents and agencies utilised
Both the literature analysed and the case studies confirmed the fact that institutional image and reputation are important success factors for all segments of tertiary education, including graduate fee-paying education. One of the more interesting findings to result from the analysis of the literature was that, for graduate fee-paying education, the image of the institution was not necessarily determined by its research outputs. The case studies identified the relationship of the institution with the key industry agencies in the countries in which it operated as being more important in determining the image of
the education provider for specific customer groups. The literature suggested that there were a number of types of agencies that were generally important for creating and
maintaining institutional image, irrespective of the country from which the institution was drawing students. These agencies included professional institutions (particularly in the case of business education), relevant
government authorities (in the case of law or political science) or other institutions (such as art galleries in the case of fine arts education). In addition, the literature noted that institutional reputation in graduate fee-paying was often conveyed through informal networks and related personal experiences (word of mouth) (e.g. Fram and Camp, 1995). Consequently, the reputation of the
education provider perceived by potential and existing clients may bear little
association to the institution's perception of its image.
The literature analysed provided a particularly apposite example: according to Kahan (1997), the University of Texas developed its Franchise Management Certificate Program in conjunction with the largest regional independent accounting firm. This program has gained considerable credibility because of its connection with this external agency and was consequently highly successful in terms of income generated and student numbers. From the quality
perspective, the subject material also proved to be highly relevant and have lasting future application in a rapidly changing
professional arena.
Another key factor in determining the reputation of an education provider identified by the analysis of the literature was the standard of teaching and other services provided by the institution (e.g. Duffy, 1996). The literature identified the fact that most graduate fee-paying education providers relied on internal resources for local marketing and advertising and external agencies present in the regions from which they hoped to attract students for
international marketing. The literature repeatedly identified the fact that the standard and approach of the marketing agency chosen to represent the institution internationally, directly affected the quality of the service the participant received during the initial contact. It also affected the reputation of the education provider in that market (e.g. Shanket al., 1995;Golden, 1991). The case studies also confirmed the
observation that success or failure in international market, in which the
institution had limited experience was often highly dependent on the choice of a local Stuart Orr
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representative. For example, the interviews conducted in the Middle East indicated that potential students and potential customers (particularly large commercial clients) were all much more positively disposed towards a locally, even if occasionally, represented fee-paying education provider. The interviewees also noted that their government's
international marketing services could provide some assistance;however, this service was usually not adequate for all graduate fee-paying education provider's representation needs. In addition, such services were noted to be on the downturn in terms of range of services in many countries which further reduced their benefit.
Management of local legislation, community and commercial support and participation
The literature that reviewed the success of fee-paying graduate education providers found that the ability of the education provider to manage the regulatory conditions, while maintaining sufficient flexibility to enable them to meet the specific needs of the paying graduate students, is very important. Both the interviews and the literature found that failure to influence local or government legislation when it
significantly interfered with the education provider's activities or the services provided, caused otherwise successful commercial graduate fee-paying educators in countries, including Australia, the UK and the USA, to fail (e.g. Swope, 1994).
From a more positive perspective, the literature identified the fact that support from the local or professional community in which the education provider operates could provide significant assistance with cash-flow and capital expenditure, as well as
significantly contributing to the reputation of the provider in the community and professional environment. In fact, the interviews pointed out that cash-flow was an important issue for graduate fee-paying education providers. Unless underpinned by a reliable income from, for example, a government source, the sporadic nature of income generated from graduate fee-paying students can seriously interfere with access to adequate cash necessary to provide a consistent level of service. In fact, many of the case-study interviewees pointed out that some of their facilities were entirely constructed or acquired with the assistance of cash that was not directly generated from their students.
Administrative coordination,
administrative flexibility and financial management
The analysed literature determined that, irrespective of the country in which the data was collected or the general opinions expressed, administrative coordination and flexibility was one of the major weaknesses of most graduate fee-paying education
providers that were operating from within a larger, host tertiary institution. The
literature repeatedly pointed out that the pressure on the host institution to meet legislative and budgetary requirements resulted in low levels of flexibility and poor administrative coordination. The literature indicated that a lack of flexibility in accommodating their needs, slow responses to reasonable requests and the
administrative error rates typical of large education providers were not acceptable to graduate fee-paying participants (e.g. Anon, 1997;Dudley, 1995;Swope, 1994). The case studies and literature pointed out that the expectations of these students were higher than the standard of administration that most large general institutions could generally offer. These expectations were found to be owing to the experiences of these students gained in the commercial at-work education environment or from commercial training programs where there was more focus on administration (e.g. Soutaret al., 1996). The small business literature suggested that a commercial business structure and administration system was the most suitable approach to the provision of education for graduate fee-paying students. The literature also pointed out that financial management in large educational
institutions (e.g. fees and accounts) tended to be driven by political and regulatory requirements, rather than customer service priorities. If the opinions expressed in the small business literature regarding graduate fee-paying program administration can be extended to their financial management, then a successful graduate fee-paying education provider would need to adopt commercial financial management techniques for the same reasons.
Conclusion
The analysis of the literature and case studies provided several important conclusions about the operational characteristics of a graduate fee-paying education provider with a good level of performance and sustainable position in the market. First, the institution must appreciate Stuart Orr
The organisational
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that it operates as a system and that every action it takes will result in some outcome, whether it be desired or not. Consequently, the specific services provided by a graduate fee-paying education provider are not as important as the way in which they are integrated. For further details of the theory of organisational dynamics, see Flood and Jackson (1995). One of the best ways of viewing a system is representing the major activities and the relationships in a structured model. The findings of this research, both the points previously discussed and other points for which there was inadequate space for discussion, have been represented in the model shown in Figure 1.
The findings of the research are presented in Figure 1 in three main categories: 1 internally-focused activities; 2 externally-focused activities;and 3 desired institutional outcomes.
The model this figure presents is based on the proposition that the internally and
externally, focused activities of a graduate fee-paying education provider will influence its institutional outcomes. The contents of the internally and externally-focused activities are presented in the groups that the literature and interviews have shown are related. The groups are also listed in order of importance, those groups located near the top
of the category were found to be more important from both the students' and institution's perspective. The same applies for the category of desired institutional outcomes. The shaded arrows in Figure 1 show the level of contribution to institutional outcomes of the internally and externally-focused activities that the analysed literature indicated could be expected. This
contribution factor, when compared to the importance attributed to the key activities represents a major issue for most graduate fee paying education providers. While both the institutions surveyed and interviewed and their perception of their student's needs indicated that certain internally-focused activity groupings were more important, those activities which were considered to be the least important, such as fees, were also found to contribute the most to the desired institutional outcomes. This suggests that these organisations are operating under the influence of internal and possibly external motivators, such as the desire to generate income, that are not consistent with the expressed objectives of the institution or the expectations of their students. This is an issue which graduate fee-paying education providers must address.
The apparent confusion identified between the importance of key activities and the desired outcomes of the institution would result in sub-optimal customer service and
Figure 1
Key activities and institutional outcomes for graduate fee-paying education providers
Stuart Orr The organisational
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failure to meet organisational objectives. To address this issue, the fee-paying graduate education provider should establish a separate business unit, which is focussed on satisfying the needs of the target market. The literature analysed indicted that the general profile of this type of student is very constant ± a professional person with undergraduate qualifications and low to medium levels of work experience. Occasional variations that were identified included students with post-graduate qualifications or a very experienced professional with no undergraduate
qualifications. Institutions that demonstrate the successful use of this formula can be found in most countries. Examples of institutions displaying leading practice in this regard identified by the literature analysis included the Harvard and Cranfield Graduate Schools of Management. Not surprisingly, these institutions are also very successful at meeting their performance objectives and are highly regarded by the target student population.
The objective of such a graduate fee-paying education provider should be to offer a superior service and value for money in the key activity areas identified in this research. Informal interviews conducted with fee-paying graduate students at the author's institution indicated that the student wanted more that just a qualification in the majority of cases. They confirmed that they expected a high level of quality in teaching, high calibre teaching staff, a high level of customer focus, flexibility in all organisational areas and a contemporary program and subject structure designed to meet their current and future needs. In addition, because education is a personal experience (e.g. Macfarlane and Lomas, 1994), high ratios of staff to
participants, staff mentors and lower overall participant numbers relative to
undergraduate programs in most international universities, create a rewarding and personally developing educational experience (e.g. Ali and Camp, 1995;Cross, 1983).
The analysis of the literature, case studies and follow-up interviews suggested that, to overcome the possible confusion between key activity areas and institutional outcomes identified, to appeal to student needs and expectations and to be a successful competitor in the industry, a fee-paying graduate education provider needs to have the following characteristics.
Teaching staff
The teaching staff should be leading edge researchers or practitioners in their field (preferably active in both research and
practice) and have an international profile. All teaching staff should have teaching qualifications and participate in an annual teaching improvement program. This is a significant departure from normal institutional practice, but is becoming increasingly important as international graduate fee-paying education competition increases.
Curriculum
A curriculum based on the English university model is, according to the literature analysed and the follow-up interviews, the preferred model for students in most countries around the world. To offer recognised degrees, the curriculum needs to be officially accredited in the institution's home country. This, however, is only sufficient to qualify the education provider to offer its programs. To be competitive, the curriculum must also be accredited by other organisations which are considered rigorous by international standards and are broadly recognised by other institutions throughout the world, such as professional associations. For example, Anon (1997) suggested that an MBA program in the UK should be accredited by the Association of MBAs to make it more competitive in that country.
The program must be both flexible and customer focused. The subjects and their content have to be developed for
contemporary needs. It is not adequate to offer adaptations of subjects that were developed 20 or more years prior for different students and a different commercial
environment. If the graduate fee-paying education provider operates as a separate commercial entity, it can adopt a commercial structure and management approach. This would enable curriculum development to take place in an environment which is focused on developments in that particular area and future student needs, rather than the accreditation process and broader university priorities.
The graduate fee-paying education provider needs to maintain links with international eduction networks and local and international industry to ensure that the curriculum is always focused on
contemporary needs. Individual staff should be allocated responsibilities for establishing and maintaining specific networks and managing the involvement of major commercial and external organisations in the programs and with the alumni. This will ensure that these important external agents and sources of information receive personal attention and that teaching staff maintain Stuart Orr
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contact with the environment from which the students are drawn.
Facilities
Another important feature of a graduate fee-paying education provider identified during the follow-up interviews was the need to offer the full range of services normally associated with a tertiary institution, even if it was operating with a commercial business structure. The facilities identified by the interviewees as important for graduate fee-paying education included a substantial library system, recreational facilities and a housing assistance service for full-time students. All of these facilities were considered to be particularly important for full-time students;however, even distance education or part-time students attending classes in the evenings still required access to facilities such as libraries, computer laboratories and meeting rooms.
The small business education literature analysed, indicated that a commercial education provider attached to a larger tertiary education institution may be able to utilise the facilities of a larger tertiary education institution for its students. On the other hand, the tertiary education literature indicated that, while this was possible, it was not always cost-effective. The use of such facilities attracted substantial ``internal taxes'' and the facilities did not always match the rest of the commercial education
provider's offerings. As a result, many graduate fee-paying education providers offered key facilities such as computer equipment, teaching and meeting rooms and core library materials to their students independently of the larger tertiary
institution to which they were attached, even if it replicated existing facilities.
Location
Significant proportions of most graduate fee-paying education providers' students come from locations significantly distant from the education provider or study via distance education. In either case, it would be necessary for the student to occasionally travel to the institution which, in turn, requires good access. For regional
institutions this translates to location near a major city which offers suitable
entertainment and recreation facilities and a major international airport. In the case of city-based institutions, access to public transport and parking may be significant considerations. Although these issues may seem fairly minor, one of the major
categories of the quality of graduate student service offerings identified in the literature
was ease of access. The follow-up interviews indicated that this was particularly
important for part-time students that studied in the evening, as traffic and parking represented significant barriers to
attendance and, ultimately, satisfaction with the course.
The literature analysed in this research identified graduate fee-paying education as one of the largest growth rate industries in the world. It was found to be a global industry, from which many tertiary education institutions and other providers could benefit and expand their operations to a multi-country level. Multi-country
operations are desirable for fee-paying education providers because a downturn in one region is often then balanced by an increase in demand from another, resulting in a more consistent number of students passing through courses and a more predictable environment for planning and administration. The literature and
interviews conducted during this research provided a consistent picture of the capabilities of a successful fee-paying graduate education provider. It also identified a significant gap between the ``typical'' practises of many graduate fee-paying education providers and leading-edge practises and capabilities for this industry. The graduate fee-paying education industry is a ``developing industry''. Consequently, it is very likely that the measures of capability identified in this research will vary with time. The effective management of such institutions needs to incorporate constant ``environmental scanning''. In the graduate fee-paying education environment,
environmental scanning could be conducted using a method similar to that adopted for the research presented in this paper. The purpose of the environmental scan is to ensure that the education provider meets the current needs of students and is aware of the key activity areas on which it must focus for its current environment.
A fee-paying graduate education provider is likely to seek to enter new markets as it grows in size and scope. When this occurs, the education provider should also conduct an environmental scan to identify the needs and expectations of the new target market. It is important for such education providers to understand that, for example, while graduate education conducted in English is becoming increasingly popular, this does not mean that students from different countries and backgrounds will all have the same needs and expectations. In fact, a popular theme in the literature analysed in this research was that students from different backgrounds had Stuart Orr
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surprisingly different needs and
expectations. While standardisation appears to be an important underlying philosophy and objective in tertiary education,
education providers offering services outside their home environment must also
appreciate the diversity of needs they will encounter. Understanding and responding to this diversity will be the future key for success in what is becoming an increasingly globally competitive education market.
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