Abstract
This paper uses the legitimacy theory as a lens to identify the most sustainable performance model to defend and maintain the legitimacy of higher education institutions in the midst of ‘fees must fall’ crisis. The body of evidence presented demonstrates that universities have at least seven critical stakeholders that control resources needed for survival, growth and legitimacy. Using this evidence, this study builds a model that looks at the impact of fee income and workload on success. The model was tested using annual time series panel data for the period 2009-2013 across 23 public universities in South Africa. The model examined the effect of fee income and workload on success rate. Basing the arguments on the notion that students are a critical constituency, with a strong influence on the amount of fee income an institution may amass, the model tested the relationship between performance and fee income using success rate as a proxy for performance. The findings showed that not only is fee income a stronger predictor of success rate, but also that fee income is negatively related to success rate of students. Policy implications of the findings are discussed. Keywords: higher education, fee income, institutional theory, performance legitimation, workload model. JEL Classification: I23, D31, L26
Highlights
The paper examined the effect of fee income and workload on success rate
Basing the arguments on the notion that students are a critical constituency with strong influence on the amount of fee income an institution may amass, we developed a model to test the relationship between success rate and fee income
Our findings showed that is fee income a stronger predictor of success rate, but that income is negatively related to success
Summary
Literature identifies, amongst others, two different types of legitimacy theory: institutional legitimacy theory referred to as institutional theory, and performance legitimacy. Taking on board Zhao and Yang’s (2013) explanation of performance legitimacy, this study defines performance legitimacy theory as an institution’s right to institute a governance system and command power on the basis of its performance This definition is built on Powell & Colyvas’s (2008) conceptualization of legitimation as a concept given meaning by multiple actors in a social environment. We look at core business performance legitimation on the basis of the assumption that the resources each stakeholder group controls will determine the degree to which each stakeholder group can heighten or diminish performance legitimacy Another way of looking at this assumption is to consider the extent to which an organization or entity is able to attract resources necessary for its survival (Tilling, 2004). We consider the resources that each of the ten stakeholder groups depicted in Figure 1 control and the influence each stakeholder group has on performance legitimacy
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