Managing Strategies for Higher Education Institutions in the UK

Managing Strategies for Higher Education Institutions in the UK: An Overview

Jashim Uddin Ahmed1 Kamal Uddin Ahmed1 Md. Anwar Sadat Shimul1 Roy Zuñiga2

Abstract This article deals with strategic management issues in the higher education sec-tor in the UK. The core idea is presented here with the argument that the prin-ciple and practice of strategic management are not only the concerns of senior management, but also an essential requirement at all levels of management of higher education. It shows that higher education institutions exist in a complex and changing environment with an increasing need for fast and effective strategic responses to external pressures. Having identified these issues, this article con-siders a form of strategic issues such as strategic management in higher educa-tion, three different levels of strategy and also discusses Porter’s five forces in the context of UK higher education sector. Though these issues are considered from a theoretical standpoint, they are linked to the competitive positioning and strategic management concepts being used in higher education.

Keywords Higher education, strategic planning, marketing, competitive advantage

Introduction

According to Buckland (2009, p. 524), ‘strategy is associated with how the activities of the organization are selected to be consistent with its objectives and purposes’.

Corresponding author:Jashim Uddin Ahmed, PhD, Associate Professor & Chair, Department of Management, School of Business, North South University, Bashundhara R/A, Dhaka-1229, Bangladesh. E-mail: [email protected]; [email protected]

1 School of Business, North South University, Bashundhara, Dhaka, Bangladesh.2 INCAE Business School, Apartado, Alajuela, Costa Rica.

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In higher education, managing strategy is arguably the most important thing a university does, enabling all of its core activities of teaching, research and wider social and economic service to be optimally achieved. It involves a thorough knowledge of the institution’s present strengths and weaknesses and the making of choices about the future. In the strategic management context, higher educa-tion institutions have had a long history of planning—whether as independent institutions or as part of a government department.

Senior management in higher education institutions have long recognized that the planning horizon is limited to the annual announcement of funding allocations by the incumbent funding council, that is, one year. Despite this, much time and effort is spent on planning and developing resource allocation models that pro-mote the institution’s mission. The institution’s corporate planning and finance departments are required regularly to produce for the funding councils and inter-nal use, corporate plans, five-year financial forecasts and annual operating plans (Chakravarthy & Henderson, 2007). Therefore, it would be imperative to explore the scope and opportunities of connecting theoretical frameworks of strategy and their applications in the field of higher education. The integration of the models and matrices of strategic analysis will bring operational excellence both in terms of quality and competitiveness in the above mentioned field.

Strategic Planning in the Higher Education Sector

Common, Flynn and Mellon (1992, p. 10) claim that ‘one useful impact of initia-tives designed to make the public sector more business-like was that ideas of strategic planning started to be contemplated seriously’. As Kotler and Fox (1995) note, when the administration realizes that annual plans make sense only in the context of a long-range plan, the educational institutions move toward strategic planning. In fact, the long-range plan should come first, with the annual plan being a detailed version of the first year of the long-range plan. The long-range plan is based on assumptions about how the institution and its environment will change over time. Therefore, a long-range plan cannot be static and must be reworked each year (called rolling planning).

Strategic planning in higher education has been affected by ‘reductions in public expenditure; increased emphasis on efficiency of resource utilisation and management; and a strengthening of the policy and planning role of individual institutions’ (Meek & Wood, 1997, p. 12). Boyett (1996) asserts that although for leaders of old universities the macro-environment had changed dramatically, the historically based internal organizations seemed unlikely to be dynamic in their response.

Nevertheless, the potential of strategic planning has been trumpeted as a major weapon to combat the upheaval being faced by higher education. It may be, as Thorne and Cuthbert (1996, p. 182) suggest, ironic that ‘HE reached the stage where strategic planning was deemed a prerequisite for determining priorities just as private sector organizations became increasingly aware of its limitations’.



34 Higher Education for the Future 2(1)

Dill (1996, p. 36) notes that strategic planning in many universities may ‘have been more symbolic than real’ and resulted in ‘superficial exercises which attempted to avoid difficult decisions’.

Keller (1997) laid the groundwork that initiated the era of strategic planning in higher education. Models of strategic planning, most of which were derived from the business sector, quickly evolved. He recognizes that change is problematic and that ‘strategic initiatives require a difficult combination of thought, insight, daring, and persuasiveness that few persons possess’ (Keller, 1997, p. 159). Morris (2000, p. 63), on the other hand, sounds a more cautious note:

The problem of the strategic change or planning process becoming more important than its purpose or its implementation was recognized. From the administrative perspective, adhering to the annual cycle, monitoring, collecting data, and writing reports were the focus, while the faculty saw more deadlines, more meetings, and little action.

Levels of Strategy

Strategy can exist at different levels within an institution. The strategic manage-ment process encompasses the three levels of strategy—corporate level, busi-ness level and operational level strategy. These three types of strategy should be integrated in a means–end fashion to accomplish objectives and create sustain-able competitive advantage (Chakravarthy & Henderson, 2007; Schermerhorn, 2012).

Corporate Level Strategy

Corporate strategy is, in general, and in aggregate, a snare and a delusion (Koch, 2000). Corporate objectives are established at the highest level of the organization with the decisions about the allocation of large-scale resources (Johnson, 1987). There are several forms of strategy, which higher education institutions pursue at corporate level:

Stability Strategy—this strategy implies strategies to keep institutions quiet and very stable. They are most frequently found in successful older and smaller universities, because their management capabilities and skills are much stronger than those of others.

Growth Strategy—this is another variant of the organizational growth strategy. The mergers, joint ventures and strategic alliances are pursuing new forms of partnership and collaboration to pursue an area of mutual interest, and allow greater sharing of growth and development, without the organizations involved having to invest the level of resources that would be necessary if they were operating in isolation (Child, 2001; Schermerhorn, 2012). In portfolio strategy, a specific relationship between two or more organizations can generate a competitive



Ahmed et al. 35

advantage when they are linked in the same corporate portfolio in order to ‘share costs and risks, and to penetrate new markets’ (Chan & Wong, 1994, p. 31).

Harman and Harman (2008) and Locke (2007) also note the combination of two or more institutions to form a new institution and acquisition. In August 2002, London Metropolitan University became London’s biggest University, created by the merger between London Guildhall University and the University of North London (Bodoh & Mighall, 2002). The University of Bedfordshire was established in August 2006 following the merger between the University of Luton and De Montfort University’s Bedford campus. In April 2008, Dartington College of Arts merged with University College Falmouth. In 2012, the University College was officially granted full university status. The University of Glamorgan was a university based in South Wales prior to the merger that formed the University of South Wales in 2013. Birmingham College of Food, Tourism and Creative Studies changed to University College and it changed to University for the Creative Arts.

Nevertheless, universities and higher education colleges with lower costs, which concentrate on teaching, have built-in advantages over smaller scale opera-tors with higher ambitions. If there is a trend towards city-scale university mergers, driven by student numbers, expansion and cost cutting, the older, more prestig-ious, university could turn out to be the junior partner. As Harman and Harman (2008, pp. 102–103) noted:

Mergers thus increasingly became the tools of government to address problems of insti-tutional fragmentation, small and expensive specialized institutions, and build larger and more comprehensive institutions. Governments also used mergers in times of finan-cial crisis and/or declining enrolments to deal with non-viable institutions.

Improving the performance of less successful mergers of higher education institutions will mean spending more on staff, libraries, information technology and other resources. Patterson (2001) observes that mergers and other forms of alliance are commonly advocated, proposed and instigated on an expectation of economic benefit, based on the belief that small institutions have high unit costs; that large universities have lower unit costs; that institutions should have a broad rather than a limited range of course offerings; and that amalgamation will lead to cost efficiencies from economies of scale. Such collaboration can raise the performance of institutions, broadening the range of the smaller and adding lus-tre to the larger. In a transatlantic prospect, Patterson (1999, p. 12) noted that ‘collaborative relationships usually involve groupings of institutions in a particu-lar geographical area; there are several such consortia in the UK and in the USA’. For instance, in 1999 Cambridge announced a major new collaboration venture with MIT, known as Cambridge-MIT Institute (CMI). CMI conducts joint teach-ing and research, with a particular focus on economic competitiveness and pro-ductivity and developing commercial spin-offs from academic innovation (Baty, 1999). Cambridge sees the move as the first in a drive to become a ‘major player’ in the USA. For Cambridge, even with its success in negotiating international




deals, this is a whole new step of globalization (Baty, 1999). According to Ahmed (2009), the universities have the ability to develop ideas, often over a longer time scale than commerce and industry.

Competitors’ Analysis

Kotler and Fox (1995) stress that every educational institution faces competition. ‘Competitive Strategy’ by Porter (1980) seems a natural approach to analyzing the competitiveness of a higher education institution’s activities. He argued that exter-nal industry forces comprised five factors, which he termed barriers to entry, sup-plier power, buyer power, threats of substitutes and industry competitiveness. These elements help for better understanding the competitive dynamics of their marketplaces and align their organization successfully against each of the forces (Brown & Carasso, 2013; Richardson, Nwankwo & Richardson, 1995).

Barriers to Entry in Higher Education

Significant economies of scale, particularly in relation to institutional manage-ment and systems exist. Every educational institution has a vital interest in learning about its various images in the sector (Kotler & Fox, 1995). In 1992, the Conservative Government granted university status to former polytechnics, central institutions and colleges of higher education (Masrani, Williams & McKiernan, 2011). The entrenched binary division between the ‘old’ and ‘new’ universities creates some intriguing anomalies (Williams & Filippakou, 2010). There is a considerable loyalty to successful university brands (Bulotaite, 2003; Chapleo, 2010), in some cases built over a few hundred years—for example, the University of Oxford (1221), University of Cambridge (1226), University of St. Andrews (1411), University of Glasgow (1451), University of Aberdeen (1495) and University of Edinburgh (1582) define quality in the UK context. As Bodoh and Mighall (2002) observed, ‘many institutions have been seen reviewing, refining or replacing their brand identity to hone their competitive edge—with varying degrees of success’. Some academic institutions change their names to match their actual or hoped-for stature (Kotler & Fox, 1995). The University of Lincolnshire and Humberside closed its Hull campus and retreated to Lincoln, becoming the University of Lincoln, taking a new name, as a part of its repositioning plan to improve its academic quality and reputation (Baty, 2001).

In recent years, universities are continuing to develop their particular degree subjects. This also brings some threat for those institutions which do not have advanced programmes of that type, such as, technology based programmes. In the broader context, these include information technology and computing based courses, such as, E-Commerce, Internet Engineering, Computer Games and Internet Technology, Audio Engineering, E-Logistics, Internet System, Chemical



Ahmed et al. 37

Product Technology, Virtual Environments, Knowledge Extraction and Electronic Publishing.

Private higher education institutions are particularly aware of the value of hav-ing a modern campus. The significant capital requirement in developing a campus is made doubly difficult for newcomers by the charitable status which all universi-ties enjoy. Additionally, in the UK, higher education degree-awarding powers and university titles must be considered by Privy Council. Different cost disadvan-tages accrue in the form of up-front investment in syllabuses, systems, quality control, operations and marketing. Access to distribution channels is also effec-tively prohibited for new entrants by the Education Reform Act, 1988.

Power of Suppliers

There is no concentration in the market for suppliers. The main output is graduates, which is essential to the expansion of the national economy (Maskell & Robinson, 2001). There is a regular flow of substitute supplies in this market produced by the universities themselves. Recent technological development is identified as having a major impact on the working habits and morale of the universities, refreshing many courses and improving contact between lecturers and students (Scott, 1999).

The current suppliers of manpower have some control over the flow of substi-tutes through the examination system. Furthermore, the wide-ranging, stringent and constructive nature of the quality appraisal panel system for reviewing sup-port services, and the academic course approval and review mechanisms that combine a robust quality and standards assurance approach, make for significant quality enhancement. Recent policies on quality assurance have actually strength-ened these powers as individuals to the cultural assumptions of the main providers have effectively captured the institutions concerned with quality assurance (Boaden & Cilliers, 2001; Munteanu, Ceobanu, Bobalca & Anton, 2010). In the higher education sector, the Quality Assurance Agency (QAA) examines a univer-sity’s quality strategy, annual quality monitoring process, and quality enhance-ment and collaboration provision. Academics have one other source of power, and that is through their significant participation in the quangos (quasi-autonomous non-governmental organizations) that control the financial allocations to the university sector.

In the knowledge economy that emphasizes knowledge production and trade, there is increasingly more value attributed to the creative and intellectual content inherent in both products and services. The ‘Trade Related Aspects of Intellectual Property Rights’ (TRIPS) is one crucial issue, which covers such things as copyright and patent, all of which are salient to the research functions of higher education. A look at the potential implications of research and scholarly activities reveals a number of issues. A consistent theme expresses a major issue about the increased emphasis on commercialization and commodification of the production of knowledge. Therefore, the highly valuable trinity of teaching, research and innovation are crucial power of traditional universities (Levy, 2003).




Threats of Substitute Products and Services

There is relatively little threat from substitute suppliers. The number of UK students who choose to study overseas is 1.7 per cent of the total student population equating to over 22,000 students. The cost of studying overseas is greater than that of study-ing at home, and competitors on the European mainland offer a lower quality of provision. There are fewer private suppliers and their market positions are weak because of the relatively high prices they have to charge. Their positions have been further weakened, both by constraints on the provision of grant funding for students studying outside the state sector, and by measures taken to strengthen the licensing arrangements for operating in the sector. This has put the control of such processes even more effectively in the hands of existing suppliers.

The recent technological revolution brings a new dimension into higher education. Michael (1995) described that technology has potential to change how instruc-tions are delivered in higher education, that is, if this technology is adopted fully. Similarly, Brynin (1999, p. 197) says, ‘new technology is seen as an enhancement to teaching but it might turn out to be a new platform for the delivery and restruc-turing of education’. Some universities are developing virtual campuses along with commercial organizations to provide online courses. Virtual campus proce-dures make use of Information and Communication Technologies (ICTs) and bring new types of course delivery methods (such as online) along with the pos-sible adoption of new strategies for studying and learning in the global higher education learning environment (Ingleby, 2014; Paswan & Ganesh, 2009). New universities like Sheffield Hallam University and Sunderland University which are working with a Swiss firm—the Fantastic Corporation—aim at creating a virtual campus with interactive online learning materials for both internal and external students (Johnston, 2001).

The knowledge supplied by the primary market for higher education can be obtained from textbooks and self-study, but as this would not supply a certificate of authentication of the product, this is of limited value to the purchaser who also has to purchase the product of the universities. Furthermore, new non-university competitors in the form of industry and non-university educators have entered the higher education sector (Friga, Bettis & Sullivan, 2003). The publishing companies have a close symbolic relationship with the universities. For example, Heriot-Watt University and Pearson offer MBAs in which the university assesses and accredits courses, the content of which is developed by Pearson and financed by the company (Goddard, 2000). Not only that, News International formed a partnership with 21 Scottish universities and colleges to market and distribute distance-learning courses developed by the institution (Goddard, 2000).

Source of Power in the Output of the HE Environment

The students are the real stakeholders (or customers) of the higher education sector (Kotler & Fox, 1995; Maskell & Robinson, 2001; Naudé & Ivy, 1999). The real stakeholders of the universities do have the power to influence a particular



Ahmed et al. 39

supplier’s revenues by changing to alternative suppliers. Like most sectors, the higher education sector is in a position to exclude those customers who are seen as being influential and helpful. Therefore, ‘reality involves the customer in the production of the service. Universities have been advised to become more student-centred and adopt a consumer-oriented philosophy’ (Nadiri, 2006, p. 128). This matters to the students because of the major potential impact on their lifetime prospects. Without higher education, job prospects are subsequently more limited.

There is one other extremely powerful stakeholder, namely the Government that pays for approximately half of the costs of the sector. Other stakeholders are parents who are paying fees, employers, alumni, funders, quality assurers, the local and regional community and so on.

Intensity of Rivalry between Institutions in the Sector

There are, currently, 162 publicly funded institutions of broadly different types and sizes (Higher Education Statistics Agency, 2014). However, for their princi-pal output, undergraduate students, the level of sales revenue has been effectively fixed in most years. All higher education institutions have existed within a com-petitive environment in that they have had to compete with each other for students over the year (Walsh, 1994). Nevertheless, the total number of HE enrolments at UK higher education institutions stands at 2,340,275 in 2012–2013, a decrease of 6 per cent from 2011–2012 (Higher Education Statistical Agency, 2014). Of these 425,265 were students from outside the UK coming here to study. A separate population of 598,925 students were studying wholly overseas for a UK qualifica-tion in 2012–2013. This represents an increase of 4.9 per cent over the equivalent figure for 2011–2012 (571,010). Almost half of these transnational students were based in Asia, with Malaysia and Singapore accounting for almost 20 per cent of the total (Higher Education Statistical Agency, 2014).

Students tend to make a single major purchase and it is difficult to switch once they have selected their provider. However, even if they do switch, the short-term impact on the provider’s revenue is minimal and there is a behaviour code that discourages such switching, even prior to purchase. These are some signs that the ability to switch will become easier in future with the arrival of credit accumula-tion and transfer (CAT) schemes.

The sector does have high short term fixed costs, and the products, as a service, cannot be stored. However, because of the predetermined sales quotas, this is normally only a problem for marginal producers who can usually cope with it by adjusting their customer specifications by taking students with lower examination grades.

There are high exit barriers because of the relatively specialist nature of many university assets, but again the management of the overall market mitigates the effect of this factor. There is also considerable protection for producers against the threat of insolvency that reduces the imperative for competition. Nevertheless, virtually every educational institution faces competition, which is competition for business, and not for education (Kotler & Fox, 1995).




The ensuing competition for a fixed amount of government funding has two impacts. It increases the salaries of those who are judged by their peers to produce excellent research, and it provides a profitable business for a number of successful academic journal producers.

The analysis suggests that there are two dominant power sources in the UK university sector; the government, and the suppliers of academic labour whose power is reinforced by their significant involvement in university management.

Business Level Strategy

The ‘business level strategy’ determines how the scope of a division’s activities will satisfy a broad range of student or customer needs; it decides on the division’s objectives in its defined area of operations as ‘niche’ (Andrews, 1971) and also establishes the policies adopted to attain those objectives. According to Burnes (2014) and Vancil and Lorange (1975), business level strategies relate to the dif-ferent ways that an individual business unit can compete in its chosen markets. At the corporate level, the business level strategies are many and varied. Rather than attempt to describe them all, we shall examine the main variants by addressing Ansoff’s matrix in this area (Ansoff, 1988).

Ansoff’s Matrix

Ansoff’s Matrix is one of the most widely used tools for conceptualizing the options available to an institution. It can assist institutions in reviewing strategic options, which it may wish to consider, described in terms of the courses/markets in which the institution operates. Other strategic development opportunities may require the development of new courses and modes, the extension into attracting new groups of students (new markets) or even diversification away from existing courses/students (Kotler & Fox, 1995).

Relative Market Share

Relative market share is a measure of market power. It is an institution’s share of a market segment in relation to its competitors. An institution needs to break down its market into market segments and examine its market share in each. Some seg-ments could be more competitive than others, some segments could be growing whilst others are not, and some segments could be much bigger than others. The analysis of the institution’s market power by segment should provide insights into strategic positioning (Kotler & Fox, 1995). The institution has a choice of concen-trating on a narrow, more specialist focus in one or more segments to customize education materials to meet the needs of individual learners, or to take a broader approach to a market. Teacher training, law, music, art, and medical colleges are



Ahmed et al. 41

examples where institutions have chosen to serve a single or narrow group of market segments in comparison to the multi-disciplinary university or former polytechnic.

Consolidation

One of the strategies available to an institution is to consolidate its position in its existing market. Consolidation implies changes in the way an institution operates although the portfolio of courses and markets remain unchanged. It can take many forms. Where an institution operates in a market showing high levels of growth it may aim to maintain market share by growing with the market (Kotler & Fox, 1995). The institution’s movement along the experience curve will maintain a competitive cost structure. A problem is likely to arise from the institution’s inability to divert resources from other low growth activities (e.g., less popular courses) or raise external funding. Where consolidation occurs in mature markets, the institution is likely to defend its position by placing an increasing emphasis on course quality, incurring higher levels of marketing effort, reducing costs or greater IT sophistication. These serve to provide barri-ers at entry to other institutions that may be considering moving into this institu-tion’s market.

If the market is declining, a different strategy may be required, for example, merging with another institution, sharing the market by rationalization course provision (e.g., regionalism), or looking for more overseas, EU or Eastern block students, and so on. There will be continuing pressure to reduce internal costs, perhaps to serve a smaller market. Any decision to reduce capacity or withdraw from a market segment either temporarily or permanently is likely to be difficult.

Market Penetration

Higher education is of immense economic significance both nationally and inter-nationally. Its reputation, particularly in competitive global markets, depends solely on outstanding quality. Institutions may choose to have a deliberate strat-egy of gaining market share by improving quality, productivity or increasing mar-keting activity (Kotler & Fox, 1995). When the market is growing it is easier for institutions with small market shares, or new entrants to gain market share because the absolute market share of all players is growing. This was the strategy followed by many institutions in the early 1990s.

In a declining or static market, penetration is much harder to achieve given the experience of the market leader. The low-share institution should try to take advantage of any complacency by the leader, or build a reputation in segments of little interest to the leader, or work in collaboration with other institutions. There may be an option to increase market share in segments, which have been aban-doned by other institutions.




Market Development

Market development, as the matrix implies (as shown in Figure 1), involves institu-tions exploiting existing courses in new market areas. Naudé and Ivy (1999, p. 126) stress, ‘…changes in technology have lowered the cost of entering the market, leading to an increase in both distance-learning and Internet-based courses’. The higher education institutions retain the security of their existing business by utilizing their distinctive competencies in the development of new courses or pro-grammes to meet the changing interests of the stakeholders (Karapetrovic, Rajamani & Willborn, 1999; Kotler & Fox, 1995). As Clarke (1997, p. 286) comments, ‘higher education institutions, particularly in the UK, are slowly emerging as organizations driven by the commercial imperative of market-led forces’.

Product Differentiation

Product development involves course innovation for existing markets and may involve new courses derived from technical developments or adaptation and improvements (Kotler & Fox, 1995). This need not require a high or perceived com-mitment to research and development. Course innovation may allow it to serve new needs or improve a course position in relation to substitutes (Sauer & O’Donnell, 2006). It may also enhance differentiation. Course development may impact on teaching costs, quality enhancements and design for a particular market segment.

Diversification

Diversification as a strategic alternative suggests that the institution will develop into segments beyond both existing courses and markets at the same time. Kotler and Fox (1995, p. 19) advocate for ‘institutions to be more focused, to pay

Figure 1. Ansoff Growth Matrix in the HE Sector

Source: Adapted from Ansoff (1988), Corporate Strategy.

PRODUCT

Present New

MARKET

Present

Market PenetrationRecruiting more students following existing courses and models.

Product DevelopmentRecruiting more students following new courses and modes

New

Market DevelopmentExpansion of existing courses and modes to new groups and non-traditional learners.

DiversificationDevelopment of new courses and modes for new groups of students.



Ahmed et al. 43

attention to costs and quality, to satisfy current students while attracting new ones, and to look for new sources of income’. Here we have considered two main types of diversification strategy, these being both related and unrelated.

‘Related diversification’ is where the institution moves away from existing mar-kets and courses while remaining within higher education (or education, generally) and includes vertical and horizontal integration. Vertical integration could mean moving into activities, which may input to the current business (Riahi-Belkaoui, 1998), for example, providing A-level courses. As Patterson (2001, p. 7) notes verti-cal integration involves, ‘where post-secondary and university sectors are combined in the one institution’. Horizontal integration refers to a move into activities, which are complementary to, or competitive with, the institution’s present business, for example, adult education courses, teacher training, overseas campuses, etc.

‘Unrelated diversification’ takes the institution into very different sectors, which bear little or no relation to the existing business. This strategy is assumed to yield financial economies (Riahi-Belkaoui, 1998). Other reasons why an insti-tution may wish to adopt such a strategy could include an exit out of a business area in decline or over-dependence on a single product-market area.

Operational Level Strategy

In ‘operational level strategy’, the departments develop a set of feasible action programmes to implement division strategy (Chakravarthy & Henderson, 2007) while the division selects—in the light of its objectives—the subset of programmes to be executed and co-ordinates the action programmes of the functional depart-ments (Vancil & Lorange, 1975). At this level, the concern is with how the different functions of an institution—for example, teaching, research, marketing, finance, IT, HRS—contribute to the other levels of strategy. The relative contributors would determine how the institution seeks to be competitive. The focus is on the smooth running of the day-to-day activities of the institution. The success of busi-ness level strategies is highly dependent on decisions made or activities, which occur at the operational level (Schermerhorn, 2012).

In connection to operational level, Treacy and Wiersema (1993) emphasize the idea of operational excellence, customer intimacy and product leadership. Operational excellence refers to a specific strategic approach to the creation and delivery of products and services at competitive price and minimal inconvenience. In the field of higher education, operational excellence can be applied through proper academic and administrative environment aligning with the strategic plan of the institution. Secondly, customer intimacy indicates continually tailoring and shaping products and services according to the customers’ need and requirements. This principle has scope to be practiced with updating the academic curriculum on a regular interval. Finally, product leadership in higher education might be referred to offering unique academic programmes and areas of studies to have a distinct value proposition in competitive environment.

Obviously, these levels of strategy impinge on each other to some extent, for example, the institution’s choice of business areas overlaps the scope of division




charters, and the delineation of the markets by the division can dictate, at the departmental level, the choice of strategy in the marketing function. Nevertheless, the distinction remains valid and useful.

Concluding Thoughts

In this article, we have examined the strategic management issues in higher edu-cation and also explained how these issues have impacted on the strategic devel-opment of higher education institutions. This article has presented the argument that the principle and practice of strategic management are not only the concerns of senior management, especially academic and administrative heads involved in the strategic planning, but also an essential element of three levels of manage-ment. This article has shown that higher education institutions exist in a complex and changing environment with an increasing need for fast and effective strategic responses to external pressures. Furthermore, we have found that strategy is crucial in the public sector, just as in private sector organizations (Common et al., 1992). A strategic decision has significant implications for the future success and direc-tion of an organization. Strategic decisions are unique, they commit significant organizational resources and trigger subsequent decisions, but without proper implementation, long-term success cannot be achieved (Schermerhorn, 2012). Therefore, it becomes a paramount and valuable factor for organizations (Hambrick & Fredrickson, 2001). There are several models that are used to explain corporate development and assist with the identification of strategic options, from which at least four distinct means by which organizations commonly grow, emerge (Schermerhorn, 2012). This article has also discussed forms of strategic issues such as strategic management in higher education, three different levels of strategy and Porter’s five forces in the context of UK higher education. We have found that there are several means which can be adapted for the higher education sector:

l By expansion in the institution’s existing market or domain.l By diversification into new territory. This could take a variety of forms,

including the development of courses, modes, etc. vertical integration and unrelated diversification.

l Through technological developments, for example, using IT to deliver courses such as computer-based teaching, distance learning, large lecture groups, etc.

l Through the use of improved management techniques by increasing the efficiency of the management process.

In the higher education institutional context, strategic management has become a differentiated and complex field of research. In conclusion it is helpful to note the comments of Buckland (2009, p. 533), who states,

Universities, however, are organizations that require to be understood in their own his-tories and contexts. No model of strategy will transfer to them without dissonance:



Ahmed et al. 45

rather it is required that universities acquire models and systems of strategic awareness, management and progress that recognize the issues, contexts and processes which actu-ally shape their strategic change.1

Note1. According to Williams & Filippakou (2010) there are different types of higher educa-

tion institutions in the UK. These being: Oxford and Cambridge; London; Other Russell Group (self designated research intensive universities)”; other pre-1992 universities (those which were incorporated as universities before the reforms of the early 1990s); post-1992 universities (those institutions which have become universities since 1992); other HE institutions (for example, Art, Music, Military, Agricultural Colleges) (p. 10).

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Authors’ bio-sketch

Jashim Uddin Ahmed, PhD, received his PhD in Management Sciences from The University of Manchester Institute of Science and Technology (UMIST), (Currently known as The University of Manchester), UK. He has two Master degrees, one in Management and the other one in Marketing, from University of Northumbria at Newcastle, UK. He teaches strategic management and marketing management courses. His current research interests include the areas of strategic management, change management and contemporary marketing thoughts.

Kamal Uddin Ahmed, PhD. A career civil servant cum academic, maintains special interest in education and research along with contributions to civil soci-ety through regular administrative pursuit. He obtained his PhD in Development Studies, from School of Earth Sciences, Victoria University of Wellington, New Zealand. He teaches and takes academic and research interest in various subjects and issues such as Human Resource Management, Environmental Hazard,




Change Management, e-Governance, Counter Terrorism, Strategic Rebalance, Globalization etc.

Md. Anwar Sadat Shimul is currently serving as a lecturer at the School of Business in North South University, Bangladesh. Earlier he did his MBA from Ted Rogers School of Management, Ryerson University in Canada and BBA from North South University in Bangladesh. His academic specializations and interests are in the area of consumer behaviour, loyalty and customer relationship management. His research works have got published in Bangladeshi and international journals.

Roy Zuñiga, PhD, received his PhD in Operations Strategy and System Dynamics from University of Valladolid, Spain. His current research interests include the areas of Systems Thinking, Production, Operations Management, Quantitative Methods, Strategy and Managerial Decisions.



Managing Strategies for Higher Education Institutions in the UK

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