The International Strategies of UK Universities: The Impact of Institutional Changes

Internationalisation has become an important dimension of higher education systems worldwide during the last 30 years. It is now an integral part of the strategies of many, but not all, universities. However, there is a paucity of research on the international strategies of universities in the strategic management literature. This study explores the implications of major institutional changes for the international strategies of UK universities, and the deployment of their resources and capabilities to sustain competitive advantage.

The research follows a qualitative approach -semi structured interviews and document review- and a case study methodology to address the research objectives. Eight UK universities were selected as the units of analysis following a theoretical sampling. Senior managers in charge of the international strategies at the case universities were interviewed and official university documents were examined. In the context of Dynamic Capabilities and Institutional Theories, the data were analysed to identify the major institutional changes that have affected the international strategies of case universities and their strategic response to these changes.

The research constitutes a theoretical contribution by revealing the concept of universities’ adaptability in an uncertain environment, which contributes to advancing an understanding of an unexplored topic in strategic management. The outcomes of this research can improve the managerial practices of universities and support higher education professional bodies in tackling challenges and ensuring the competitiveness of the UK HE system, which highlights its practical usefulness.

Each institutional change, its implications and the extent of universities’ control feeds into a classification (Figure 6.2) that conceptualises the challenges faced by UK universities in a rapidly changing environment. DiMaggio and Powell (1983) consider organisations to be homogeneous when they conform to the same three types – coercive, normative, and mimetic – of institutional pressures (isomorphism). However, the study identifies three other types of pressures – competitive, inevitable and absolute – that address individuality and require organisations to be differentiated (anti-isomorphism). This provides senior managers in the UK higher education sector with a general outline of the range of institutional pressures in their external environment that can affect international development, which enables them to contextualise a bigger picture of their own surroundings and to evaluate its impact on their practices more effectively.

Universities have quite similar types of resources, although they may have different amounts of them. Their capabilities, rather than their resources, are valuable, rare, imitable and non- substitutable. The acquisition of resources and capabilities is not sufficient to create and deliver value and the study identifies eight fundamental support factors that contribute to the effective reconfiguration of a university’s capabilities, which results in the development of distinctive core competences and leads to competitive advantage (Figure 6.3). This helps strategists assess their internal environment more effectively to better deploy these capabilities and to identify areas of improvement.

A model is developed to highlight how universities adjust their international strategies in an uncertain environment according to identified criteria which are associated with both the change and the organisation (Figure 6.5). The model provides strategists and executives with a useful assessment tick list that can be embedded within their strategic decision making process to enhance their strategic responses to any potential changes. Examining each of these factors contributes to the analysis of the situation and helps universities to sense potential opportunities and recognise possible threats in their institutional environment.

The findings indicate that the reconfiguration of institutional resources and capabilities is not limited to the development of new capabilities, as the Dynamic Capabilities (DC) theory posits. Therefore, DC theory is expanded to include a stretching area that reflects the deployment of extant organisational capabilities to perform different things and to perform things differently, which in turn may yield sustainable competitive advantage.

DC does not indicate the mechanism by which organisations examine the implications of institutional changes necessary to validate their adaptation process. Hence, Institutional Theory is used to overcome this deficiency in DC. The research combines Institutional Theory with the Dynamic Capabilities approach and produces a conceptual framework (Figure 6.7), which incorporates the theoretical underpinnings of both and which explains UK universities’ strategic responses to institutional changes. The framework provides executives at HEIs with five clear practical steps on how to study their market and to adjust to its fluctuations. Engagement with this process can enhance universities’ strategic responsiveness to institutional changes and help them adapt their international strategies to their continuously changing environment.