Some Issues Associated With Strategy Formulation And Strategic Planning In A Contemporary University
The management of a contemporary university is closely related to the process of strategy development and implementation in the agenda of achieving competitive advantage in the international education market. Responding to the challenges associated with this process, higher education managers have to reconsider their strategies and methods by lining up with current and future realities. Strategy-making hierarchy in a higher education institution is determined by the complicated nature of its academic environment that embraces diverse functional domains. In a modern university, strategic planning involves different levels across the organization, being a multiple-link top-down and bottom-up process. Various strategies within the university’s hierarchy are complementary to each other and support the university’s comprehensive strategic plan. These strategies are executed throughout a higher education institution for attaining area-specific strategic goals. The aim of the paper is to outline and discuss the relevant issues and challenges associated with strategy formulation and strategic planning in a contemporary university in the context of accomplishing a competitive advantage. In the paper, the analysis of theoretical literature on the research topic was used, as well as the analysis of strategic plans developed by some leading universities from Europe, United States and Australia in order to gain an international perspective on strategic planning and strategy creation in higher education.
Keywords: Higher education managementstrategy developmentstrategic plan
Contemporary universities face increasing number of challenges, such as a growth of student populations; diversification of provision and consequently, more heterogeneous student groups; an emphasis on accountability and performance; new practices of institutional governance; seeking new funding possibilities, internationalisation of education, etc. (Gray, 2014). Other factors include rapid technological development, the need for alliances with national and international universities, increased competition, etc. (Akyiel et al., 2012). Thus, higher education institutions, being focused on the purpose and aims of education (Bush, 2011), have to deal with a variety of aspects. They are not limited to teaching and learning, but also include research and innovation, as well as knowledge transfer aimed at supporting national and regional economies (Gray, 2014), and are related to social, cultural, moral, academic aims (Fiddler, 2002).
Therefore, great expectations are laid upon universities by the EU and national governments (Ravio, 2008). Nowadays, managers working in higher education have to offer new opportunities to their graduates in the agenda of lifelong learning and the related employment opportunities, adapting their policies and tools to the requirements of knowledge-based economies (COM(2003) 58 final; COM(2007) 61 final; Report to the European Commission on Improving the Quality of Teaching and Learning in Europe’s Higher Education Institutions, 2013; The State of Higher Education 2013: Executive Summary, 2013). Allowing for this, educational organizations need management systems to effectively control the outcomes of their strategies; education managers have to use structured methods for providing strategic support for their organizations (Latorre-Medina and Blanco-Encomienda, 2013).
Strategic management is now widely used in universities (Kettunen, 2009). Higher education institutions have to consider the concept of strategic management in their work to meet the expectations of modern society (Birinci and Eren, 2013). Strategic management in a university is associated with creating institutional policies aimed at increasing its potential for change (Tabatoni, 2002), management of school improvement being executed within a strategic planning framework (Fiddler, 2002). These policies are also directed at enhancing research and academic excellence and improving international attractiveness of a contemporary university (Stukalina, 2016). Responding to the challenges associated with this process, higher education managers have to reconsider their past strategies and methods by lining up with current and future realities.
The aim of the paper is to outline and discuss the relevant issues and challenges associated with strategy formulation and strategic planning in a modern university in the context of achieving competitive advantage in the international higher education market. In the paper, the analysis of theoretical literature on the research topic was used, as well as the analysis of strategic plans developed by some leading universities from Europe, United States and Australia in order to gain an international perspective on strategic planning and strategy creation in higher education.
Literature Review and Theoretical Framework
As modern society faces new problems of education, ecology, social services, etc., non-profit organizations become more involved in entrepreneurial work, being under great pressure to “emulate the efficiency” of a business enterprise (Ansoff, 2007). Strategic management is viewed as the process of strategic decision-making that involves “key decisions” to be made in the context of achieving sustainable competitive advantage that results from a set of actions taken by an organization (Frynas and Mellahi, 2011). These actions are aimed at acquiring and managing organizational resources and capabilities (Harrison and St. John, 2008).
Strategy creation is regarded as an essential factor in gaining a competitive advantage for organizations (Porter, 1985; Thompson and Strickland, 2003; Koontz and Weihrich, 2010). Strategic management is essential for all types of organizations, as it offers a “structured process of analysis” in the frame of a logical approach to decision-making (Jeffs, 2008), systematic analysis being vital for the strategy-making process (Frynas and Mellahi, 2011). Though, it should be mentioned that profit-oriented enterprises are more concerned with their expansion and competitive rivalry, whereas non-profit organizations are more concerned with strategies that “raise money” for providing services, which accomplish organizational objectives, for example increasing their influence and recognition (Jeffs, 2008).
Thus, since universities are service-oriented institutions, their strategic planning is different compared to business entities; the following parameters are very important in higher education: creativity, innovativeness and entrepreneurship (Birinci and Eren, 2013). All these parameters are closely associated with a university’s basic activities: education, research, knowledge transfer. Planning-related assessment at the intuitional level takes two forms: institutional effectiveness and learning outcomes (Hinton, 2012). So the basic principles of strategic management are valid as for business organizations as for educational institutions on condition that the attainment of education-specific goals presupposes using a special approach to developing a set of supportive strategies (Stukalina, 2014; Stukalina, 2015).
Strategic planning is regarded as is an integral part of strategic management, being its “backbone support” (Steiner, 2010). The importance of strategic planning in higher education institutions is increasing as the procedures performed in a university are becoming more complicated; it involves setting goals and objectives, work planning, preparing budgets, classifying resources according to the established priorities, providing participative management, etc. (Akyiel et al., 2012). Strategic planning methods assist senior management and middle managers to align their daily activities to the institution’s broad goals; strategic planning stimulates data-based decision-making and creates the basis for performance measurement, which enables to monitor progress, and allocate (reallocate) the resource in accordance with these goals (Goldman and Salem, 2015). The strategic approach to managing a contemporary university enables education managers to develop their organizations holistically, using organizational resources in the integrated manner (Kettunen, 2002).
Strategic planning, being a systematic process, usually results in developing a set of strategic plans (Steiner, 2010); it is based on setting strategic goals (Hill and Jones, 2012). According to Thompson and Strickland (2003), a strategic plan outlines an organization’s near-term and long-term performance goals, being an assembly of strategies designed by different managers at different levels in the organizational hierarchy; moreover, “management’s direction setting effort is not complete until the separate layers of strategy are unified into a coherent, supportive pattern”. The main goals embrace all key organizational functions; specific objectives can be viewed as the organization’s operational targets (Cole, 2003). Strategic planning also pursues to ensure organizational performance that is focused on achieving strategic objectives, and these strategic choices can cause fundamental changes in central organizational functions and processes (Kettunen, 2009).
In the paper, the analysis of theoretical literature on the research topic was used. This paper concentrates on secondary sources of research regarding strategy formulation of a modern university that is intended for achieving competitive advantage in the international education market.
The research also includes the analysis of strategic plans developed by some leading universities from different countries in order to gain an international perspective on strategic planning and strategy creation in higher education: University of Oxford (UK), Heriot-Watt University (UK), University of Edinburgh (UK), University of Sydney (Australia), Cornell University (USA), Washington State University (USA), University of Amsterdam (the Netherlands), University of Oslo (Norway), University of Helsinki (Finland); Maynooth University (Ireland), University of Latvia (Latvia). The analysis of the strategic plans was aimed at identifying some key elements that should be integrated in the strategic plans of contemporary higher education institutions operating in an extremely competitive international environment.
From the academic literature review it was found that the strategic approach is now integrated in the management of contemporary universities as a response to serious changes occurring in the global environment. As the role of universities has changed drastically in the knowledge-based economies, education managers’ tasks involve reconsidering the internal structures of their institutions, developing new management and decision-making schemes and integrating leadership in the organization etc. (Felt, 2007). The management of a contemporary university is closely related to the process of strategy development and implementation in the agenda of achieving competitive advantage in the international education market.
From the academic literature review it was also found that there are different approaches to strategy development, each with its own terminology, advantages and limitations: prescriptive and descriptive (Jeffs, 2008). Due to the diversity of functional business areas, there is no a standard paradigm for guiding the field of strategic management (Harrison and St. John, 2008). Prescriptive (positioning, or design) approach, considering strategic management a rational process that includes coordination of organizational activities from the top down, seems to be quite popular; implementation of the matching strategies requires much control from the management of an organization (Jeffs, 2008). Universities are viewed as “pluralistic” organisations characterized by diverse goals (Bain, 2007); so in a complex university environment, strategic planning involves different levels across the organization, being a multiple-link top-down and bottom-up process. Various strategies within the university’s hierarchy are complementary to each other and support the university’s comprehensive strategic plan. Current strategic plans include different strategic objectives (Hinton, 2012). These objectives are built around basic domains of a university – education, research, staff, services and facilities (Stukalina, 2014). The established strategic objectives are related to a specific strategic planning model, which includes a number of specific tasks to be executed (Table
From the analysis of the strategic plans developed by some leading universities it was found out that the strategic planning in contemporary universities is organized around the following core issues (Table
As can be seen from the above table, strategic plans offer “a rational approach” to accomplishing pre-set objectives (Koonz and Weihrich, 2010). They comprise several components, each component being a planning tool and serving a definite purpose; all components must be mutually supportive (Hinton, 2012). Mission statements are not technically a part of the strategic plan, but they can be considered as the basis of the plan; the supporting documents forming the context for a strategic plan are vision and values statements and strategic goals (Ibid.). A strategic goal can be defined as a clear-cut and measurable anticipated future state that an organization attempts to reach; the purpose of goals is to accurately specify what must be done in order to accomplish its mission or vision (Hill, and Jones, 2012).
The analysis of the above strategic plans demonstrate that different universities in different countries establish similar strategic goals in the agenda of achieving competitive advantage in the international education market. A series of specific objectives are set with regard to the international and national (regional) context. Area-specific strategies stated in an overall strategic plan are all aimed at accomplishing excellence in various functional domains: research, education, staff and infrastructure, community engagement being an essential element of the strategic plan’s implementation. This is determined by the fact that modern universities have to contribute much to the community by sharing their knowledge and expertise. For accomplishing specific strategic objectives, a set of integrated management procedures are used by education managers in the context of quality assurance in higher education (Kettunen, 2008). Quantitative and qualitative indicators are established in the agenda of internal quality assurance in higher education, as a contemporary university’s strategy is concerned with continuous enhancement of quality (Standards and Guidelines for Quality Assurance in the European Higher Education Area, 2005).
The analysis of the aforesaid strategic plans also shows that, in the frame of their strategic plans, modern universities focus their activities on the following:
Competition for talent.
Globalization of programs.
Popularization of research.
Inter-institutional and international collaboration.
Establishing strategic partnerships.
Development of internal quality assurance systems.
Contribution to the society and social responsibility.
Acquisition of external funding.
So managers search for new multiple strategies in the frame of an overall university’s strategy to address the emerging challenges in higher education, which can be related to some future in higher education (Higher Education to 2030: Executive Summary, 2009): intensified cross-border higher education and mobility of students, enhanced international academic research, global impact of higher education systems in Asia and Europe and the growth of their scientific output, enlarged private higher education provision and financing worldwide, growth of market-like tools in higher education management, a bigger focus on quality assurance in response to the growing importance of private and cross-border higher education, institutional rankings and the pursuit for accountability.
Conclusion and Discussions
This paper has discussed some key issues associated with strategy formulation and strategic planning in a contemporary university in the context of achieving competitive advantage in the international higher education market with due account of the current and future trends and the associated risks. In the paper, the analysis of theoretical literature, as well as a number of strategic plans created by some leading universities from different countries has been used, which has allowed the author to gain an international perspective on strategic planning in higher education.
The conducted analysis has also provided some information about core common aspects – the focal points of modern strategic plans – strategic goals and more specific strategic objectives, multiple strategies aimed at supporting the implementation of a comprehensive university’s strategy, and main indicators to be applied for monitoring the implementation progress. It has been found out that though the universities are operating in different parts of the globe, they develop similar strategic goals in the context of accomplishing research and academic excellence in the extremely competitive environment of contemporary higher education both at the international and national (regional) level. Similar area-specific strategies are developed by different higher education institutions for pursuing these goals.
The implications for managers working in the field of higher education include: a) the strategic approach must be integrated in the management of modern universities as a response to serious changes taking place in the international environment; b) in a complex university environment, strategic planning involves different levels across the organization, so there is a need for developing multiple strategies in the framework of an overall university’s strategy; c) area-specific strategies stated in an overall strategic plan are aimed at achieving excellence in various functional domains: research, education, staff and infrastructure, community engagement being an essential element of the strategic plan’s implementation.
However, there are some limitations of the research. The analysis includes only a number of higher education institutions, which were randomly chosen, so the findings might not be transferable to all types of universities. Thus, it is recommended that further research should be conducted for generalising the findings.
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