NAME:

PETER MURAYA

I.D:

626644

COURSE:

BUS 4090

TASK:

TERM PAPER

TOPIC:

EXPLAIN THE ENVIROMENT OF HIGHER EDUCATION AND THE IMPORTANCE OF UNDERSTANDING IT.

SEMESTER:

SPRING 2011

LECTUER

PAUL KATUSE

OUTLINE

1.0

INTRODUCTIONpg 3

2.0

USIU AS A CASE STUDYpg4

3.0

INTERNAL ENVIROMENTpg 5,6&7

4.0

EXTERNAL ENVITOMENTpg7,8&9

5.0

IMPORTANCE OF UNDERSTANDING THE ENVIROMENTpg9&10

6.0

CONCLUTION...pg10

7.0

REFRENCESpg11

1.0

INTRODUCTION

The demand for Higher Education in most African Countries and especially Kenya began in the 1960s which was the decade of independence as it made a significant impact on the development of higher education which was most noticeable in the increase in the number of institutions and of students as well as increasing variety of courses. In Kenya institutions of higher education began to be established in 1956 whereby the university of Nairobi had its beginnings in the royal technical college as more universities like Moi University and Kenyatta University were established, by the end of 1987 there were 14 private university institutions established in Kenya which were established due to the massive expansion of primary and secondary education, an expansion which was itself propelled by demographic pressures, the increasing sophistication of the economy which demands a skilled workforce also fueled the demand for higher education. By 1990s there were lots of public and private universities which had been established so as to meet the demand of proving students with knowledge so that they can meet the countrys high demand for todays world which is becoming more scientific and technological. Therefore high education institutions were established to meet this demands and the nations concern to have the ability to produce goods and services needed by society to ensure an improvement in the standard of living for each member. Soon After the establishment 3

of higher education, Kenya established a commission for higher education which was suppose to mediate between governments and universities regarding funding and other pertinent issues such as advising the government on planning high education in accordance with human resource projections, accrediting private universities as well as inspecting each university at least once in every four years for the purposes of quality assurance. It is very important for this education institution to know the environment in which they operate in both the internal and external environment which comprises of mostly students, staff etc which will help them in attending to the basic needs of these stakeholders so as to ensure that they are satisfied. 2.0 USIU AS A CASE STUDY Of the approximately 10,000 students enrolled in universities in Kenya in 2000, about 70% of the students were enrolled in private universities each of the universities having a unique niche in its course offerings. Although private universities are still relatively scarce in African countries, they form a critical component of higher education in Kenya. The United States International University (USIU) was founded in 1969 as it claims the status as the first and only secular university in East Africa and being one of the best private universities in Kenya. The University stated goal is to become a premier institute of academic excellence with a global perspective in East Africa. It held its first graduation in 1979 with 23 students and numbered some 2,354 students in 1991/2000. The development of private universities is therefore a key factor in the development of partnerships between the government and no-governmental organizations in education. USIU as one of the best private universities in Kenya has 4,500 students who are both fulltime and part-time students most of whom come from all kinds of different countries. When one is looking at an Academic institution, it is visible that the most important stakeholder can be said to be the student who is the reason why universities exist so as to provide them with knowledge, acquisition of skills, knowledge and to develop their character in such a way that the students are prepared to contribute effectively in the society. 4

But hardware costs and maintenance are among the major challenges facing private universities. USIU spend $110,000 on purchasing a server plus an additional $60,000 for service as they also spend $7,000 per month for maintenance of the internet. This shows how much USIU is entirely dependent on tuition and fees income which comes from the students, thus it is crucial that the university know both its internal and external environment in which they operate in especially its students who are part of the internal environment.

2.0 INTERNAL ENVIROMENT To illustrate the importance of environment to USIU, consider the analogy of a swimmer crossing a wide stream. The swimmer must assess the current obstacles and distance before setting out and if these elements are properly evaluated, the swimmer will arrive at the expected point of the stream. However if they are not properly understood, the swimmer might end up to far upstream or downstream. An organization is like the swimmer and the environment is like the stream thus just as the swimmer needs to understand the conditions in the water, USIU must also understand the environment in which they operate in so as to maneuver among them properly. The internal environment can be said to be that environment within the organization in which it operates in, whereby it has complete control over it. In order to understand the internal environment an organization may choose to do an internal environmental situational analysis whereby they choose a specific strategy such as the SWOT analysis. The SWOT analysis is an acronym for the internal strengths and weaknesses of an organization and the environmental opportunities and threats facing them. It is an easy technique which managers use to create a quick overview of an organizations strategic situation. It is based on the assumption that effective strategy is derived from firms internal capabilities (strengths and weaknesses) and its 5

external situations (opportunities and threats). In the case of USIU, one can see that it very important for the university to conduct an internal analysis so as to understand the internal environment which includes; 1. Students- This is the most important type of stakeholder for the university, as students are the reason why USIU is in business, the students are of major importance as they contribute greatly by contributing to the university through their tuition fees which in turn helps the university to run its operations such as paying the costs of maintaining the ICT etc. It is therefore crucial for the university to be able to understand the students needs and come up with ways and techniques of meeting these needs so as to ensure that students are well satisfied with the services that they receive which will in turn see the number of students enrolling in USIU increase. 2. Faculty- The faculty of USIU can be said to be the lecturers, Deans from the school of business, information systems etc. The reason why the faculty is of great importance to an organization is because this people help the university to achieve its goals of becoming a premier institute of academic excellence by running all the academic affairs of USIU through e.g. teaching students, dealing with student complaints, registration of new students etc. The university needs to have a good relationship with the faculty by making them feel part of the organization by giving them a pay rise or better positions when one has earned it so as to ensure that the affairs of the school are executed smoothly. Example, for any faculty that works in USIU, they usually receive a discount on the tuition fee if one chooses to enroll for a degree. 3. Staff- Another important person can be said to be the employees or the staff who work in the school as their duties are to run the day to day activities that help the students which include the people working at the finance office, the cleaning crew which ensures that the facility is clean and ready for use every day. USIU must ensure that these staff members 6

are motivated to work better in the organization through various incentives.

For

example, in USIUs staff members usually get a discount on the tuition fees if they decide to enroll themselves or a family member to pursue a degree which is a very good type of incentive because not only does it motivate the employee other than receiving money incentives through pay rise etc but it is a good incentive because it makes the employee feel part of the organization as he/she is also encouraged to support the university in their mission which of giving knowledge, skills etc as they are also encouraged to enroll in a degree from the many various types of degrees offered. 3. O EXTERNAL ENVIROMENT

The remote also known as the external environment comprises of factors that originate beyond and usually irrespective of any single firms operating situation. This environment represents the firm with opportunities, threats and constraints but rarely does a single firm exert any meaningful influence. For example when the economy slows down and construction begins to decrease, an individual contractor is likely to suffer a decline in business. The following are some of the factors that an organization should consider when looking at the external environment:
1. Economic- This concerns the nature and the direction of the economy in which a firm

operates. Because consumption patterns are affected by the relative affluence of various market segments, in strategic planning each firm must consider economic trends in the segments that affect its industry. USIU as an academic institution must consider the economic factor in both national and international level where they must consider the availability of credit, level of disposable income, interest rates, inflation rates and the propensity of people to spend etc as it dictates the amount of money individuals may be willing to use on private universities like USIU by sending their children to study at these institutions.
2. Social/Cultural- This include the beliefs, values, attitudes and opinions of the people

living in our society. As social attitudes change, so does the demand for various types of clothing, books, education etc. Like other forces in the remote external environment,
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social forces are dynamic with constant change resulting from the efforts of individuals to satisfy their desires and needs by controlling and adapting to environmental factors. USIU must also make sure they keep track of the social/cultural factors because it affects them by determining who enrolls in their school e.g. by being an international school and influencing cultures from all over, the way people perceive the school or the attitudes toward the school tend to be accepted by many cultures and thus that is why the school is so diversified with students from different backgrounds and cultures.
3. Technological- This can be said to be the innovation and development of new

technological products. Firms must be aware of the technological changes that might influence the industry because any technological breakthrough can have a sudden and dramatic effect on a firms environment. When one looks at USIU as an institution, it can be said that they have been very keen in the technological factor as they have not been left behinds when technology changes. For example, in USIU there has been the introduction of a new e-learning program known as blackboard whereby students and their lectures have been able to communicate more easily whereby the professor has been able to download the class materials e.g. course outline, assignments, Notes etc which has made it easier for students to assess this material from anywhere and at anytime.
4. Political/Legal- This can be said to be the direction and stability of political factors.

These define the legal and regulatory parameters within which firms must operate. Political constraints are placed on firms through tax programs legislation etc. as these laws usually tend to reduce the potential profits of a firm. In the case of higher education the politics and legal factor affects institutions of higher education with the laws and regulations that concerns them. Among other issues can be said to be the stability of the government which helps the country to be able to stabilize thus inviting many new investors in the country who contribute to including the economy. For example in 2008. When Kenya had its Post-election violence, USIU experienced a decline in profits and the number of students enrolled at the universities due to the simple fact that the country was not stable in return as it send a lot of foreign students out of the country and not returning for a semester or two until Kenya had regained its stability, which had a big impact on USIU because because for those 2 to 3 semesters the students who were not
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enrolling were not paying tuition fees like they are supposed to do every semester thus making the universities total revenue to dramatically decrease. When an organization looks at the internal and external environment properly, USIU is able to formulate a better strategy to which is going to help them archive their mission and vision of becoming a premier institute of academic successes, the internal environment comprises of the internal factors that the organization can control but the external comprises of the outside environment in which it is very dynamic, changing and has a lot of uncertainty and thus it is not possible for any organization to be able to control the external environment but there is a slight chance that they may be able to influence, regarding the case firms should know both environments as they affect them directly in their day to day business activities. 4.0 IMPORTANCE FOR UNDERSTANDING THE ENVIROMENT There is great importance placed on organizations to understand the environment in which they are operating in. The reason why USIU as an institution must know the environment is because both internal and external environment affect the universities industry in which they operate as it is crucial for them to understand the dynamic and changing environment. In any organization, there is usually a strategy put in place that outlines the necessary steps, objectives and activities that need to be taken in the institution so as to succeed in their long-term goals. These factors are said to be affecting any organization that provides certain goods and services to the consumer. Therefore it should be a top priority to USIU to ensure that they form a task force or outsource a task team that is specialized in scanning and analyzing the environment in the industry that one operates in. When the university is able to get the report of their environment, it will be of an advantage because most of the factors affect their main customer (student) which determines how the student will react to a certain technological innovation etc. The understanding of the environment will in turn after making the university to understand their main stakeholder, it will also help the university to understand the certain specific needs of their students and how to meet these specific needs thus providing accurate information that will help the organization to formulate a specific strategy that will work towards accomplishing the organizations goals and mission while still meeting the needs of various stakeholders of the organization.

For example, in USIU one can be able to see how the institution has been keen in recognizing this specific needs of the students because when one looks at the University from the date it was founded to now, it is clear of how much the institution has grown for a number of reasons but mainly because the demand of students to enroll in the school has grown tremendously which has put a lot of pressure on the institution to build more classrooms and a library which can be able to accommodate the number of growing students that are currently enrolled in the school. Among other needs that have been met can be said to be the need of the students to have a social life apart from books and that is why over the years USIU has formed various clubs in which students can involve themselves in as well as introduced sports, seminars, exchange programs, and even trips to visit different countries all over the world in which any student can attend.

5.0 CONCLUTION In todays dynamic world that we live in which is changing everyday from technological changes to demographic, this has created a wide range of demand for the society to have more people who are innovative, skilled in a particular area and people who are able to cope up with the drastic changes while meeting the need of producing better goods and services for the society. This demand has triggered the need for more higher education institutions to be created which offer quality education. It can therefore be said that academic institutions in Kenya need to understand the environment in which they operate in so as to be able to understand their students much better as they recognize their specific needs and come up with strategy formulation that is able to address to these needs of the students because the environmental factors both the internal and external environment that affects the organization through their various stakeholders. Therefore USIU should learn to use different analysis technique tools such as the SWOT analysis which will be able to help them assess the internal environment as they will get accurate and specific information that will help them in planning and even doing various types of forecasting such as technological forecasting which helps an organization to predict the future of technological innovations which in turn will help them to better prepare for changes before they happen.

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REFRENCES

Mintzberg, Henry and Quinn, James B. The Strategy Process, Concepts, Texts, Cases, (Prentice Hall International, 1996.)

Pearce, J. and Robinson, R. Strategy Formulation and Implementation, (Homewood, Illinois: Irwin Publishers, 1997.)

Paul P.P.W. Achola et al. Trends and Future of University Education in Kenya, (Masaki publishers, 1990.)

Kilemi Mwiria et al. Public and Private Universities in Kenya, (James Curry Ltd, 2007.)

Griffin, Management 7th Edition, (Prentice Hall 2002.)

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