Strategic and Financial Changes in Private, Not-For=profit

¶ … Strategic and Financial Changes in private, not-For=profit higher education institutions in Jamaica

A Quantitative Analysis of Strategic and Financial Changes in private, not-for-profit higher education institutions in Jamaica

Summary of Chapter 1 and introduction to chapter 2:

Researchers are of the opinion that SIHE is in danger of being affected by external forces such as innovation, competition, and other disruptive forces (Christensen, Anthony, & Roth, 2004; Kirp, 2004; Koblik & Graubard, 2000; McPherson & Schapiro, 1999; Roach, 2004; Townsley, 2002). They say that decreasing availability of the access to certain forms of higher education restricts and inhibits the options open to a growing segment of students at the undergraduate level (Hawkins, 1999; Hussar & Bailey, 2006; Townsley, 2002; NCES, 2005a). Based on empirical data and the process of resources allocation between SIHE strategies and implications, the study aimed to study the effects on higher education (Bower & Gilbert, 2005). The current study considered ongoing factors and how they would affect education in the future it also looked at external factors and the implications they posed.

This paper is meant for a quantitative analysis of strategic and financial innovational changes in small, private, not for profit higher education institutions in Jamaica. The main intent behind this paper is to evaluate the framework in which strategic and financial innovational changes in small, private, not for profit higher education institutions in Jamaica operate. They focus on the conditions which make financial investments more or less preferable to be adopted and indeed implemented in various contexts. In doing this we hope to lay smooth the path for any future studies conducted in the area or on the topic of financial investments with the associated implications. This would be rendering any future study and research a great service. It would give them a frame work with which to consult in all areas of dispute that could arise because of the various uncertainties in such tedious research.

Hence, it is important that before moving further, we understand how the current standing of Jamaica on the financial requirements of the educational structure.

Jamaica is a country with a focus of many of its resources on education, allowing it to develop into a first world country over the course of its existence. Founding the educational system around technical, scientific and business related class work allowed for a shift in national educational policy and ideology. Education can prove to be the power behind Jamaica's fast rise to power. It could potentially propel Jamaica from being a third world country in to the first rate first world country that it is today (Chua, 1997). Jamaican policy is big on education. It focuses on it intensely almost to the exclusion of all else. Teo (2002) says that Jamaican education policy boarders on pragmatism.

The educational improvements described in this chapter are backed by research suggest that proved solid development in students learning process along professional development (Penuel et al. 2007). The current situation encountered is one of operation. Teachers attempt to link the curriculum-oriented action with specific site-based conditions. This is a brave attempt fraught with many problems and difficulties. There exist numerous problems which have to be overcome. It is a decent attempt. It is a start but more must be done and considered. This will go far in reaching an outcome acceptable to all.

Second chapter's first section discusses the methodology leading towards the process of literature review. This section also offers background information about the historical setting while assessing the modifications in the responses of institutional strategy to the state of market and society before the year of 1998, particularly in the years after 1960. The sections that follow the respective chapter entail a description of the foundational study conducted on the DI and RAP paradigms employed to explain the unstable and competitive setting, resource allocation and earlier studies of dependent and independent factors while also describing the development of important economic and institutional indicators with respect to the Strategic and Financial Changes in Private, Higher Education.

Chapter two also concerns itself with research literature both past and present on the unexpectedly competitive environment found within the boundaries of advanced education and the responses by industry to those competitive elements. The text goes on to show an analysis and a brief introduction the research found within the RAP model (Bower & Gilbert, 2005) as well as the theory of DI (Christensen and Bower, 1996). If we look at the exact workings of the research we will find that the specifics include past research that inquired into the various variables and the strategies employed by the various institutions and the inherent elements found within the dependent variable of economic condition. Chapter three focuses on the research methodologies employed and by describing the general data collection methods such as data collecting processes, data analysis techniques, calculations used in research and general measures.

To sum up, this study, based on quantitative research, will identify the existence of a connection or relationship between Strategic and Financial Changes in Private, Higher Education Institutions in Jamaica, ranging from two hundred to three thousand and the modifications in external forces and strategies of the institution.

Section 1: External Factors and Strategies connected to the Independent Variables

Studies exploring the background of university level education have given evidence of innumerable years of adaptations in strategy practiced by institutions of higher education with respect to the modifications and alterations in the state and disturbance in a society (Adrian, 2005; Miller, 2003; Schuman, 2005). Starting from the twelfth and thirteenth centuries, higher educational institutions that were church-controlled understood realities in settings that premised on faith and also provided assurance about the continuity of the existing way of life (Adrian, 2005).

Independence of thought and the entry of innovation knowledge are relatively newer concepts that paved way to the instability prevalent in the later years of the eighteenth and nineteenth centuries -- the time industrialization and science was making considerable progress and being recognized for it in America and Europe that led a number of institutions to accept changes in the curriculum in order to make it more flexible to societal requirements (Adrian, 2005; Miller, 2003).

The colonial rule saw a considerable part of the Strategic and Financial Changes in Private, Higher Education Institutions in Jamaica being dismissed and disregarded regularly. The respective institutions that were controlled and managed by a collection of public and sectarian officials and were hardly allowed any subsidies by the government, provided a curriculum that was conventional and offered the choice of few optional subjects (Schuman, 2005; Townsley, 2002). Most of the university level education by nineteenth century was happening mostly in small private colleges providing a curriculum that was classic in nature (Schuman, 2005).

Access to Jamaican universities improved after the early years in the nineteenth century through the establishment of institutions that were not so small and were land-grant. The respective universities allowed the option to choose from mechanical, elective and agricultural syllabi that represented and depicted the changes in the practical demands of the people (Miller, 2003; Schuman, 2005).

It was in the later years of the nineteenth century and the early ones of the twentieth that Jamaican universities and educational places appeared for women and those earlier marginalized, such as minorities in the region. According to Schuman, it was a time of considerable progress and also facilitated innovation and the birth of newer ideas. Even though a number of the larger institutions went on increasing the other part of the twentieth century, the small colleges, particularly those of the liberal arts went down in number following a brief increase during the mid-century (Breneman, 1994, Schuman, 2005).

An assessment of the literature review (below) with respect to the modifications that occurred subsequent to the year 1960 depicted that the considerable amount of variance existed in the methodologies leading to the description of institutional reactions to market instability and competition. While limited studies exist that explain the altering state and factors in the industry of higher education with a wider outlook (Berg, 2005b; Christensen, Anthony, & Roth, 2004; Ingram, 1993; McPherson & Schapiro, 1999), rest of the studies depicted altering conditions with a perspective that is internal and revolved around contrasting the performance of the institution with competitors or with their historical performance (Bok, 2003; Breneman, 1994; Schuman, 2005). The ensuing paragraphs that begin from a generic approach and move towards a more specific one explain the respective studies.

Unsettling Discoveries and Changes

Looking through a rather general outlook, the paradigm of DI offers an approach to assess the strategic position of many Jamaican educational corporations. The ideas depicted in the theory of DI can easily be applied to university level education (Christensen, Anthony, & Roth, 2004). The ensuing paragraph assesses the foundational study of DI model and explains the studies that determined the indicators of competitive struggles, strategic choice and change in the industry of higher education.

The notion of unsettling innovation:

In the year 1996, Bower and Christensen established the DI model by amalgamating two separate research approaches. One of the approaches revolved around the study of external control that was carried out by Salancik and Pfeffer in 1978 and offered the idea that the external authorities or population decide the organization's resource dependencies that further convince those charged with managing to come up with decisions and select strategies premised on the level to which the organizations can guarantee reliable amount of resources coming into the corporations.

The second research methodology depicted that when Jamaican organizations reacted to upcoming threats from technological advancements they emphasized and employed the resources to the development and improvement of products already in existence so that an existing customer base could be catered to (Cooper & Schendel, 1976). In 1996 Bower and Christensen deduced the DI model by combining the respective research approaches mentioned above with their study carried out in the same year that assessed the global industry of disk drive in the year of 1990 and later.

The DI model was based on the idea that corporations keep resources for assignments and task that deal with the requirements of present consumers -- a phenomena known as sustaining technologies while no strategic change takes place. Consequently, organizations that are "astutely managed" (Christensen & Bower, 1996, p. 197) end up losing their market share and dominance when faced with unsettling changes of technology, a threat mostly posed by competitive organizations. The respective competitive Jamaican organizations direct their attention to markets which the existing organizations have hitherto not developed an innovative plan of action for. The DI model connected the resource dependence and allocation theories by determining a causal link among them.

Even though, those charged with the responsibility of management are likely to rely on the sources where their resources come from, circumstances occur where skilled and able managers have to exercise their authority and decision making powers on matters related to resource allocation and thus, they can alter where the organization is going in terms of their overall strategy and plan of action (Christensen & Bower, 1996).

The two kinds of innovative technology that led to change were identified by Christensen, Anthony, and Roth (2004). The two types were sustaining innovation and disruptive innovation. The sustaining kind offered the organizations to make profits by enhancing the present product lines, services offered and processes directed towards the more important and currently present consumers. An example of a sustaining innovation is of a computer that is faster and offers a storage capacity that is higher than the previous models. As for the disruptive innovation, it can either develop and exploit new markets or reform the present markets. Also the disruptions can be either new market or low-end (Christensen et al., 2004).

Disruptive innovations that are of the low end kind take place when the present competitive product line, services and process allow enhanced features and options than what the consumers desire and are priced at a level that consumers are not so willing to bear. An example of such an innovation is of Wal-Mart, a discount retail store that fulfills more consumer demands is still more affordable than high-end stores like Sears, Roebuck and Company (Christensen et al., 2004).

Disruptive innovations that targets new market takes place when the present product lines restrict the level of possible clientele or facilitate the consumption of products in centralized and convenient conditions (Christensen et al., p. xvii). The respective product line allows it to be more convenient for the public to carry out a task that earlier necessitated the use of a skill or resources (Christensen et al., p. xvii). An example of such a disruptive technology can be of a number of health products that save the consumers a visit to the health clinic.

The DI model maintains that the present organizations, like educational institutions, that employ sustaining innovation have a greater chance of faring well against emerging organizations. On the contrary, when disruptive innovation is the basis of competition, the emerging organizations are likely to fare better in almost all situations (Christensen, Anthony, & Roth, 2004, p. xv). The circumstances that can allow the emerging organizations to fare well against the dominant existing organizations are also explained by the DI model.

The model suggests that this can be achieved by coming up with less complicated and more cost effective innovation that might be perceived to be inferior but it assures the organization of importance in the market and lends it a competitive gain quicker than the existing product line of the present leading organizations (Christensen, Johnson, & Rigby, 2002).

Existing Jamaican organizations, like the Jamaican educational institutions, that are successful usually do not keep aside resources for projects and task that go further than just sustaining technology. Ultimately, the plan of action paves way to reduction in power of the existing leading organization that is brought about by the emerging organizations targeting a market's low end (Christensen, Anthony, & Roth, 2004). Upcoming organizations come up with innovative services and product lines to a consumer base that has not been exploited or to present consumers whose demands are not being sufficiently met by the product line currently existing. This is how they increase their market share and affirm their hold while the competencies of disruptive innovation go up.

Innovative corporate processes in Jamaican educational institutions led by disruptive innovation have it in them to affect the progress, continuity and behavior of an organization (LeBlanc & Christensen, 2001; Von Hippel & Katz, 2002). Even though innovative processes and products revolve around the use of innovation, the situation that facilitates emerging companies in attacking the existing ones is explained by disruptive innovation (Adner, 2002). It is disruptive innovation when the upcoming or the present consumer line begins to prefer the newer offerings of an organization which are less complicated, less expensive and allows increasing convenience (Denning, 2005). Coming up with DI necessitates carrying out tasks in a different manner, something a number of organizations are not very good at (Denning, 2005).

The DI model integrates the Salancik and Preffer's (1978) theory of resource dependency with studies depicting that organizations reacted to upcoming challenges by concentrating their resources on enhancing the present product line for an already existing consumer base, thereby representing instances where the resources of the organizations can either be controlled by managers or the market (Christensen & Bower, 1996; Cooper & Schendel, 1979). This applies to Strategic and Financial Changes in Private, Higher Education Institutions in Jamaica as the resource dependency allows or disallows the institutions to engage their present target audience with newer improvements in the curriculum or technology in class and this allows the parents and students to either accept the innovative changes or refute them; hence, playing a part in the innovative strategies that are adopted by the institution in the long run based on the resource dependency notion.

Keeping the above stature and approach of Jamaican educational institutions in mind, it is important to note that the DI model depicted that organizations being intimidated by increasing competition from upcoming organizations had a higher probability of concentrating their resources on sustaining technologies that deal with the requirements of the present consumer base without having to bring about strategic change (Christensen, Anthony, & Roth, 2003; Christensen & Bower, 1996).

Furthermore, disruptive innovation is different from sustaining innovation in the sense that the latter concentrate on the corporation's present consumers and allows for incremental advancements or breakthroughs in the existing product line (Christensen et al., 2004; Denning, 2005). Identifying whether corporations make use of strategies that either disrupt or sustain assists in determining the chances of an organization's continuity and survivability in a competitive market.

With respect to determining, explaining and forecasting the changes in the education industry, the process of DI revolves around determining the indicators of competition, strategic choices and change. Following paragraphs explain each process.

Indicators of change were suggested by Christensen, Anthony and Roth (2004) that also took into account an assessment of overshot and undershot consumers, non-customers and non-market settings that revolved around regulatory authorities coming up with or removing obstacles to institutional innovation. Assessment of competition between educational organizations revolves around reviewing the competencies and flaws of each organization in the web of competition and determining the attacker and the organization defending to identify the more successful organization with the best accuracy (Christensen et al., 2004).

A review and assessment made on strategic choices of Jamaican institutions revolves around inquiring if the educational organizations make decisions which enhance or reduce their probability of achieving success or higher student performance in the long run (Christensen et al., 2004, p. 54). This analysis revolves around detecting the work that goes in and in identifying value networks surrounding emerging organizations and deciding whether the existing firms have achieved a Black Belt in disruptive innovation (Christensen et al. 2004).

The existing research concentrates on strategic choices. The preparation or the effort put in by the entrant educational institution decides whether the state of the market allows them to plant a foothold (Christensen, Anthony, & Roth, 2004). Assessing the existence of value networks identifies whether the entering organization gives way to the creation of value networks, overlapping with other institutions or believes in freestanding. Identifying whether an existing firm has achieved a black belt in disruptive innovation entails assessing the strategic choices, in order to gather evidence that the established organizations have the competencies to factors that can boost disruption (Christensen et al., 2004, p. 54).

Plans of actions directed towards addressing an increasing competitive market can either revolve around sustaining strategies that are short-term or disruptive strategies that are long-term. Considering the instability in the industry of higher education via the DI model, leaves the academic institutions at position that suggests innovative ways of assessing strategic changes (Christensen et al., 2004).

Discussion

Higher Education and Disruptive Innovation:

The DI model was employed by Christensen, Anthony, and Roth (2004) in explaining the emerging Jamaican organizations in the industry of higher education as the ones providing enhanced access to products of education to new consumers. The study of Berg (2005a) on education providers looking to make a profit explained the existence of firms that directed their initiatives on the market for adult education that was not included in the earlier consumer line. This was part of the population that had their demands unmet by the conventional universities that went on to offer programming more than needed by students (for instance, athletics).

A phenomenon called asymmetrical motivation occurs between the existing conventional education providers and the emerging organizations that are looking to make a profit when a number of existing education providers are competing against each other just for status and the total quantity of students (Bok, 2003; Goldman, Gates, & Brewer, 2002).

It reduces the competency of the existing Jamaican firm or institution to assess and consider the emerging organization a threat or to acknowledge the change indicators (Christensen, Anthony, & Roth, 2004). The competition that exists leads to an increase in the cost of alluring and maintaining the number of present consumers (Bailey, Rom, & Taylor, 2002; Christensen, Anthony, & Roth, 2004; Neely, 1999). Consequently, the existing organizations can find themselves with few resources and means to react effectively to disruptions.

Change Indicators:

As per Christensen, Anthony, and Roth (2004), the change indicators that signal the existing Jamaican organization's sensitivity to disruptive innovation revolve around determining undershot and overshot consumers, nonmarket and non-consumer settings. Firms that are challenged by disruptive innovations are likely to concentrate and allocate resources to improving upon present product lines through sustaining technologies and take the risk of increasing consumer demands by offering more features than required (Christensen et al., 2004).

The wide variety of Jamaican students in an institution is an example of overshot consumers as they are unlikely to afford the ever increasing tuition fee (Hussar & Bailey, 2006; Martin, 2002). As for undershot consumers, they include pupils whose timetables do not match with the conventional layout of the schedule. The dramatic increase in the number of people getting registered in distance learning programs (Hussar & Bailey, 2006) is evidence of the fact that students are moving away from institutions despite their facilities in the form of student counseling, sports and residences etc. (Berg, 2005b).