Part I: Critical review of theoretical and empirical literature
4.2 Market-orientation and organisational culture
Kasper (2005) claimed that there is a link between strategy, organisational culture and market-orientation. This is supported by the McKinsey 7S model (Pascale & Athos, 1981;
Peters & Waterman, 1982). Kaspar (2005) characterises the market culture type as:
o Dominant attributes as competitiveness and goal achievement
o Leadership style emphasising decisiveness and achievement orientation o Bonding to the organisation via goal orientation, production and competition o Strategic emphasis on competitive advantage and market superiority
Narver and Slater (1990) see market orientation as an orientation towards the customer, the competitor, and cooperation coordination, whereas Kohli and Jaworski (1990) define the market orientation as intelligence generation, intelligence dissemination and responsiveness.
The latter seems to best suit the context of higher education. Slater (2001) stressed that a market orientation is centred on the needs of the customers and the organisation’s aim of satisfying those needs. From an HEI standpoint, if the student is taken as the consumer then student satisfaction becomes the central focus for a market-oriented HEI. A study by Cameron and Quinn (1999), based in part on Higher Education Institutions, viewed market-orientation as based upon mechanistic and external positioning and the results indicated that market cultures were associated with the best performance, although the ranking of the four cultural typologies varied from one industry to another (see section 1.6 for a detailed description of the typologies).
Using the six dimensions of Hofstede (1991) (process oriented vs. results oriented; employee oriented vs. job oriented; parochial vs. professional; open system vs. closed system; loose vs.
tight control; and normative vs. pragmatic), Kasper (2005) concludes that market-oriented organisational cultures will be more pragmatic than normative with customer needs taking
69 priority above procedures and exhibiting a strong external focus (on competition). Day (1999;
6) and Cameron and Quinn (1999) confirm the need for an externally focussed culture as part of a market orientation.
According to Kasper (2005) there are a number of factors which are crucial to an organisation’s market orientation, such as the degree of openness and he found that the culture of a market-oriented organisation should be results oriented, employee oriented and professional. When considering members of organisations in the higher education sector, the picture of what market orientation really is, becomes less clear. As a public institution the organisation is subject to a certain degree of openness although the members within may not be open themselves. When considering a results-orientation again this may be seen from varying perspectives: individual performance could be based upon student satisfaction, publications, number of tenders won, whereas organisational performance could be based upon keeping within budget constraints, student enrolment, research or a number of other areas. With many stakeholders having varying expectations, a result-orientation in an HEI can be difficult to measure.
Hurley and Hult (1998; 45) found a strong link between market orientation and innovation:
“A market- and learning oriented culture, along with other factors, promotes a receptivity to new ideas and innovation as part of the organisation’s culture (innovativeness)”. This again is subject to interpretation in a higher educational context. HEIs with a strong research focus could be seen on the edge of innovation within their various fields, other HEIs may adapt technology to develop new forms of courses and teaching methodologies. Although HEIs have been portrayed in the past as out-of-touch, perhaps nowadays there is an increasing push to be receptive to new ideas and innovate as a means of remaining competitive. As research institutions, many universities and, perhaps to a lesser extent, colleges are required to innovate and with a market-orientation. Innovation may not only come from the field of research but also in introducing new courses, opening up new markets of students, new teaching methodology, to mention but a few. In spite of this aspect, research indicates the need for universities to adopt entrepreneurial activities, strengthen their institutional management, and their interaction with industry and rest of the society (Clark, 1998;
Etzkowitz, 2003). If creativity and innovation, as mentioned earlier, are potential benefits due to the existence of subcultures in the organisation, then perhaps in higher education too
70 subcultures may be seen not only in terms of their individual orientation but also as a means in themselves of enables HEIs to become more competitive.
Kasper (2005) suggested a number of the key behaviours and perceptions that constitute a market orientation and can be seen in the following figure:
Figure 11: the key factors to consider in developing a market orientation
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Source: Kasper (2005; 20)
Some of the more unexpected findings in this respect were as follows: excellent internal cooperation and communication through the perception that “each day is challenging”;
72 learning from each other’s mistakes; and not looking after their own self-interest. It should be noted that the study by Kasper (2005) was conducted primarily with organisations from the private sector such as consultancies, insurance companies, banks and manufacturers although the list of organisations also includes one health care organisation, local government and a social welfare organisation. Therefore, this model presented by Kasper (2005) should not be considered exhaustive and may well require amendments and additions in order to suit an HEI.
In higher education, there are criticisms that competition should not be a central issue as an HEI’s role should be seen as a ‘triple helix’ involving knowledge creation rather than solely from a commercial perspective. Various expressions have already been used to describe market-oriented HEIs such as: ‘academic capitalism’ (Slaughter and Rhoades, 2004), the
‘massification’ of HEIs, and ‘McUniversities’ (Parker and Jary 1995), ‘entrepreneurial university’ (Clark, 1998) and ‘new managerialism’ (Deem 1998), some of which have been mentioned earlier. Such references indicate a greater focus on management, performance measures, being open to change and maintaining strong contacts with industry as well as with the rest of society (Etzowitz 2003; Clark 1998). Academic success is becoming measured according to rankings concerned with the number of students (and especially foreign students) enrolling, range and popularity of courses, and amount of income brought in from these and other projects and the organisation for this study is no exception to this fascination with rankings, which in turn affect future funding. Naidoo (2008: 47) sums up the potential situation: “Education is likely to be reconceptualised as a commercial transaction, the lecturer as the ‘commodity producer’ and the student as the ‘consumer’”. Marginson and Rhoades (2002; 287) argue that this commodification is not cause for concern as “universities have not been reduced to businesses. If the profit motive has been inscribed in these not-for-profit entities, higher education institutions nevertheless continue to be many-sided entities performing a wide variety of roles for various constituencies”.
Although aware of the pressures for HEIs to become market oriented, researchers and experts have expressed concern for this new direction for HEIs. Marginson and Considine (2000) found that between 1980 and 2000, full-time university enrolments in Australia increased by 50 per cent, whilst over the same period staff increased by only 6 per cent and they indicated a sincere concern about the consequences of HEIs becoming increasingly dependent on commercial activities: “If we continue to subsume the academic functions of the university
73 into its corporate identity, building institutions for the sake of the institutions themselves and losing sight of the fact that it is in teaching, research, and scholarship that universities make their distinctive social contributions, we will impoverish the university as an institution and pave the way for the shift of its academic functions into a generic corporate environment. This might be good for business, but it would not be very good for education” (Marginson and Considine, 2000: 35). Bok (2003) points out that the growing commercialization of HEIs undermines core academic values. He refers to a number of examples that employees in HEIs are undertaking tasks which may be considered dubious such as the increased secrecy in corporate-funded research, industry-subsidized educational programs for physicians, and conflicts of interest in research on human subjects, all of which appear to have money as the main motivating factor. This orientation is seen by Bok as a very short-term approach in higher education that will lead to the loss of public trust and the respect of faculty and students towards the institution and one another in the long term. The view that HEIs should be more than commodity producers is echoed by Lynch (2006: 6) who argues that a focus on a market orientation and, more specifically, league tables “direct us away from many of the core values that are central to University work, including quality teaching, outreach, inclusion and research which is of worth not only to our careers but to humanity in its entirety”.
In relation to the importance of the student in HEIs, another issue that came up a number of times was that of whether the students of HEIs should be seen as the consumer or the product when HEI’s adopt this market-orientation. This has significant implications: if the student is the consumer that the stress is placed on student satisfaction, rankings become indicators of student satisfaction and the product is thus the course itself. If, on the other hand, the student is the product, then the final consumer is the employer and the focus turns towards collaboration and cooperation with employers to ensure that market needs are met.
Needless to say, market-orientation may vary by degrees between one HE and another, as well as according to the HEIs stage in development. Kasper (2005; 6) refers to “a scale ranging from being truly market-oriented to not being market oriented at all”. Hence the operational definition of market orientation is: “the degree to which an organisation in all its thinking and acting (internally as well as externally) is guided and committed to the factors determining the market behaviour of the organisation itself and its customers” (Kaspar, 2005;
6).
74 Although market orientation may not be the only source of competitive advantage, Day (1999) suggested that the following behaviours may be considered a means by which new information concerning trends in the market may be accessed: creating a spirit of open-mind inquiry; analyzing competitors’ actions; listening to staff on the front lines; seeking out latent needs; active scanning of the periphery of the market and encouraging continuous experimentation. Thus a market-driven HEI would need to have the ability to maintain relationships with customers, regardless of whether the customer is seen as the student or the employer.
As a final point, there are exceptions to the rule. Not all HEIs are developing a competitive, arguably consumerist approach with detriment to history and traditions. According to Meadmore (1998), in Australia certain HEIs are using their history and traditions as a means of achieving a niche although of course this applies very much more to the elite universities rather than those lower in the rankings and hierarchy. Regardless of the approach adopted, there can be little question of the increased market-orientation and competitive nature of HEIs.
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