NCUP SEMINAR Wednesday 11 November Challenges Facing Universities: People Management Issues UK Universities and Overseas Operations David Needle

1.0 TOPICS FOR DISCUSSION What are the goals? Which country? What mode of entry? The nature of the overseas activity and the issues involved. Some concluding thoughts.

2.0 WHAT ARE THE GOALS? Income generation? Research? Staff development? Student recruitment? Staff recruitment? Enhanced visibility and reputation?

3.0 WHICH COUNTRY? Country selection is a function of a number of theories used in international business: Location theory based on the market and host country resources. Institutional theory based on the benefits and constraints offered by the host country presented by e.g. the economy, the political system, the rules of ownership, the ease of money transfer. Psychic distance theory based on the similarities between the home and host countries in terms of language, culture and education systems

4.0 WHICH MODE OF ENTRY? Use of agents? Wholly owned subsidiary (overseas campus) versus a joint venture (collaboration with a partner) versus a franchise operation. What business research tells us is that different markets call for different modes of entry but also that different modes of entry are possible for different activities in the same market. The key choice is between equity modes of entry and contract modes of entry

5.0 THE NATURE OF INTERNATIONAL ACTIVITY The recruitment of students The recruitment of staff Research Running teaching programmes

6.0 STUDENT RECRUITMENT This is generally accepted as a necessary source of income by UK universities. To what extent has it enriched or distorted degree programmes in the UK? The key issues are: - fees - income targets set by college management - who recruits and who selects? - quotas based on total numbers or country of origin - managing the expectations of high fee students Does the current system as operated by many universities favour only the rich?

7.0 STAFF RECRUITMENT Has the REF distorted international recruitment? Comparative salaries both external and internal. Issues of equity and staff morale. Managing the expectations of international staff. Time and cost and visa issues.

8.0 RUNNING PROGRAMMES OVERSEAS This is a function of a number of key variables: Cost Cost Income levels Time Control Risk Reminder of key decisions Wholly owned subsidiary as with an overseas campus or setting up a distance learning company – high control but high cost versus Joint venture – medium cost and medium control versus Contract outsourcing/franchise – low cost, low control and high risk

9.0 JOINT VENTURES Choice of partner is crucial, especially for market knowledge, administrative capabilities and political connections. All teaching carried out by the home institution or mixed mode with host institution. Student movement or staff movement. Single or joint degrees? Can offer students different learning experiences. Costs can be high for the home institution.

10.0 FRANCHISING PROGRAMMES Choice of partner is crucial, especially for market knowledge, teaching and administrative capabilities and political connections. Essentially involves licensing degrees to overseas partners. Low investment by the home university but high risk. Issues relating to both quality control and control of the franchisee. Revenues can be low and administrative burdens high for the home university.

11.0 ISSUES WITH FRANCHISING AND JOINT VENTURES 5Cs - Cost/income relationship - Capability - Compatibility both strategically and personally - Commitment - Control. Staffing issues involving home staff - part of contract or additional pay? - who is selected to teach? - issues of equity within departments - policy on travel, subsistence and expenses - problems with the above have led to increased us of outsourced labour. Organization structures can be complex and costly.

12.0 CONCLUDING THOUGHTS ON CONTEXTUAL ISSUES Economic issues – global economic change can have significant impacts. Financial issues – overseas student fees have become institutionalised income; the true cost of running programmes overseas is often underestimated. Market issues – competition is ever increasing. Political issues – political change; issues of both UK and overseas government control; impact of local area politics. Cultural and institutional issues – determine expectations and behaviour; negotiating process and styles; degrees of control for the home institution. The power and status of the home institution will determine the policy, the nature of the activity and the choice of partner.