Research Outputs
Chilean Universities and Universal Gratuity: Suggestions for a Model to Evaluate the Effects on Financial Vulnerability
Financial vulnerability can be understood as the risk of an organisation being unable to carry out routine its normal operations due to financial restrictions. Models to estimate financial vulnerability have mainly been developed for profit-making organisations, while few exist for non- profit organisations (NPOs). One example is higher education institutions, which have experienced important changes in Latin America through gratuity policies for student tuition. This study proposes a model to estimate the effects of gratuity on financial vulnerability, as previous studies have focused on the effects of enrolment. A binary logistic regression model is proposed, considering the following variables: debt, income concentration, operating margin, administration costs, and square metres of rooms per student. We applied this model to 54 universities between 2013 and 2019. The results showed that the model is relevant for the debt, size, and operating margin variables. Additionally, we observed that on average, all universities were negatively affected. This result is particularly true for state-owned universities because of certain management restrictions. A limitation of this study is the unavailability of other sources of non-financial information, such as each university’s business model and stock of strategic resources, which could improve our model, as this information is more related to control than to management.
Explaining loyalty in higher education: A model and comparative analysis from the policy of gratuity, a case applied to Chile
Since the 1980s, numerous transformations in higher education were experienced in Latin America, and especially in Chile, a country that allowed private entities to enter the education systems and develop a market. The opportunity triggered an increase of coverage and competition to capture and retain students, followed by marketing strategies delivering student satisfaction and pursuing student loyalty. Moreover, since 2012, higher education institutions in Chile have been allowed to adopt a policy of gratuity, giving families the co-responsibility of dealing with the cost of education. So, some institutions adopted gratuity and continued receiving funds from the state, but others did not, relying instead on family income. The split in the financial responsibility of higher education seems to have generated varied reactions from the students and their families, including their satisfaction with and loyalty to the institution. Despite the abundant literature on higher education, however, a few studies attempt to explain and compare student satisfaction and loyalty across types of institutions, such as those that opted for gratuity versus those that did not. This study examines a set of relevant attributes for understanding that phenomenon; attributes such as quality of service, satisfaction, trust, commitment, and loyalty. The results reveal a prevalence of trust and familiarity among the students attending an institution with gratuity. In contrast, the results demonstrate a preponderance of commitment and satisfaction among the students attending a non-gratuity institution that relies on family, private, and personal funds to support their education.