Strategic planning and market positioning in higher education institutions

Running head: PLANNING 1

PLANNING 6

Future Planning for Institutions of Higher Education

Future Planning for Institutions of Higher Education One of the greatest challenges for educational institutions today is that they are faced with increasingly scarce resources yet also increasingly greater needs. This is true of educational institutions that cater to a wide variety of student types, spanning from the most elite to state schools and community colleges which are highly inclusive. Just like a corporation, colleges must be aware of how specific leadership decisions taken in the present can result in either positive or negative fiscal and organizational outcomes in the future. Even if the goal of a university is not profitability, universities must still use their resources wisely while still honoring their meritocratic purpose. Definition of Future Planning Just like for-profit economic institutions, colleges must engage in strategic planning for the future. Flynn and Vredevoogd (2010) note that some concerns of colleges in regards to future planning include branding themselves for specific demographics in the marketplace. Some institutions are positioned as elite such as Harvard University or Brown University, others are student-focused liberal arts schools like Williams College or Amherst College; others are more focused on vocational preparation such as community colleges or institutions with cooperative education programs such as Northeastern University. Public universities, even though they may be partially funded by the state, must likewise keep future planning in mind, given that funds may be limited by economic conditions outside the school as well as population shifts within the state. Even within different branded demographics, there is further segmentation as some colleges are known for being more socially liberal or having additional programs (such as combined degrees that allow students to “fast track” to a medical or engineering graduate degree) to attract students. “The national brand schools tend to be popular choices for applicants, and they focus on attracting top students and selecting the most promising candidates from those who apply” (Dooley, 2013, par.3). In contrast, “specialty brands - not household names, but well-known in their niche. Like the big brands, they have no difficulty attracting applicants (say, Harvey Mudd for engineering)” (Dooley, 2013, par.4). Regional or locally-focused schools, in contrast, may focus more upon attracting students from local populations looking for financial bargains or educations tailored to local industries. As well as determining what students they are attempting to attract, colleges must also have an eye on the external market environment. Some years, there may be a higher population of qualified students due to shifts in the population. Other years, colleges may have to struggle to enroll students that meet their standards. Colleges of course must have operational budgets in regards to facilities, athletics, salaries, and be mindful of their input costs as well as potential sources of revenue. Governance and Structure of Colleges: Internal and External Pressures Institutions of higher learning are generally governed by a board of directors and a college president. The president often sets the tone for the college in terms of its vision and values while the board assists the president in operationalizing that vision. But colleges are increasingly beholden to internal and external pressure in terms of their governance. For example, alumni may exert pressure to spend more money on athletics in exchange for greater financial support; they may also pressure the school to give greater attention to legacy admissions. Public universities may feel pressure from state legislatures to admit more in-state students to serve their mission or out-of-state students who pay higher tuition. Media pressures can also result give the increasing spotlight turned onto colleges who have a significant percentage of students graduating with high levels of debt without clear job prospects to enable them to support such expenditures. College Affordability As student loans continue to burgeon out of control and cripple many students for years after graduation, institutions are under increasing pressure to make college more affordable. Not only do institutions have diminishing resources, so do students. Future planning must include enabling students of the middle and lower echelons of American society to fully participate in the American dream. Colleges are under pressure to ensure that they are the truly meritocratic institutions they promise to be. Institutions which once advertised themselves as need blind, in other words, claiming to admit students based solely on academic ability, regardless of financial need, have been quietly doing away with these popular policies that they find increasingly hard to honor in the face of rapidly shrinking endowments. Even institutions which claim to be need-blind, it is alleged, are not need bind in actual practice. Yes, some well-endowed institutions such as Harvard University and MIT are very generous with aid even to middle-class students. But if need-blind MIT, met “the full demonstrated need” it would “have to tap into their approximate $11 billion endowment” (Taylor, 2014, par.2). Of course, for some highly desirable students with demonstrated financial need, such as first-generation college students and students from historically underrepresented groups, colleges will be more willing to tap into their endowments. But by and large, they are not eager to do so. Students who need financial aid, as evidenced by their notation on their Common Application that they will be filing the FAFSA or need a fee waiver for their applications, thus are often at a disadvantage even before the college admissions race truly begins. But fewer and fewer students can afford to pay out of pocket for college, as “net tuition has increased at an average rate of 1.4 % per year beyond inflation, and when colleges and universities often turn additional support into higher spending,” often catering to wealthier (and full tuition-paying) students who demand more luxurious dorms and gyms to attract them to the school (Cota, Dua, & Laboissiere, 2012, par. 1). Planning, Fiscal Management Practices, and Leadership Skills However, it is clear that with appropriate management, some colleges are saving money and still able to deliver services to students. According to a McKinsey Consulting study, “the top quartile of institutions is 38% more productive than the average of their peers” school (Cota, Dua, & Laboissiere, 2012, par. 1). Ensuring that students graduate within the allotted amount of time and obtain the needed jobs to support paying for their degrees is foundational in ensuring that students do not accumulate unsupportable debt. Colleges can also offer more online courses, so students can more easily balance the challenges of work and school. These courses are also often cheaper to offer, given they do not need a brick and mortar location. Reducing expenditures on non-instructional costs can also increase accessibility for lower-income students at the school (Cota, Dua, & Laboissiere, 2012). In short, the financial management and leadership of the institution must prioritize expanding access to lower-income students and reducing debt through strategic institutional choices. Currently the focus at many institutions is on increasing amenities and attracting more international and students paying full tuition. While this may support institutional costs to some degree, the extent to which it realizes the true purpose of American education is questionable.