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Dissertation Assessing the Feasibility of International Branch Campuses Factors Universities Consider when Establishing Campuses Abroad Megan Clifford C O R P O R A T I O N Dissertation Assessing the Feasibility of International Branch Campuses Factors Universities Consider when Establishing Campuses Abroad Megan Clifford This document was submitted as a dissertation in May 2015 in partial fulfillment of the requirements of the doctoral degree in public policy analysis at the Pardee RAND Graduate School. The faculty committee that supervised and approved the dissertation consisted of Charles Goldman (Chair), Darleen Opfer, and Dave Baiocchi. The Pardee RAND Graduate School dissertation series reproduces dissertations that have been approved by the student’s dissertation committee. The RAND Corporation is a nonprofit institution that helps improve policy and decisionmaking through research and analysis. RAND’s publications do not necessarily reflect the opinions of its research clients and sponsors. R® is a registered trademark. Permission is given to duplicate this document for personal use only, as long as it is unaltered and complete. Copies may not be duplicated for commercial purposes. Unauthorized posting of RAND documents to a non-RAND website is prohibited. RAND documents are protected under copyright law. For information on reprint and linking permissions, please visit the RAND permissions page (http://www.rand.org/publications/permissions.html). Published 2015 by the RAND Corporation 1776 Main Street, P.O. Box 2138, Santa Monica, CA 90407-2138 1200 South Hayes Street, Arlington, VA 22202-5050 4570 Fifth Avenue, Suite 600, Pittsburgh, PA 15213-2665 RAND URL: http://www.rand.org/ To order RAND documents or to obtain additional information, contact Distribution Services: Telephone: (310) 451-7002; Fax: (310) 451-6915; Email: [email protected] Executive Summary International branch campuses (IBCs) – degree-granting higher education institutions (HEIs) located in different countries than the HEIs that originated or operate them – are an important and growing part of the international higher education landscape. Unfortunately, little guidance about the process of establishing an IBC exists to help decision-makers at parent institutions determine whether or not to pursue a particular opportunity. To address this gap, this dissertation addresses two research questions: What are the steps in the decision-making process HEIs go through when making decisions regarding whether or not to establish an IBC? What key factors do HEIs use to evaluate a potential IBC? This research draws upon existing education and business management literature as well as primary data gathered through 38 interviews with decision-makers representing 26 IBCs and 11 parent institutions. The analysis of the interviews suggests there are five stages in the process of establishing an IBC: consideration; gathering support; opportunity identification; screening, decision-making and planning. During the consideration stage, leaders and administrators think about the pros and cons of establishing IBCs within the context of their institutions’ goals. Goals for the parent institution include enhancing the parent institution’s reputation; creating research and academic opportunities; gaining access to student markets; altruism; and financial gain. During the gathering support stage, parent institution leaders work to gather support for the proposed IBC by engaging and fostering stakeholder buy-in; allocating funding and staffing to support the IBC; bolstering ties with potential host countries; and rearticulating the parent institution’s mission to justify the IBC. During the opportunity identification stage, institutions work to identify potential opportunities that are economically and academically viable. Parent institutions identify most opportunities through the university’s existing iii relationships and partnerships. They almost always work with partners, rarely pursuing IBCs completely independently. During the screening, decision-making and planning stage, decision-makers consider whether or not they would be locating in a hub or away from other IBCs; host country government regulations; host country business culture; preferences of parent institution leaders; host country infrastructure; host country economic issues and the sustainability of academic programs. During the operationalization stage, institutions consider additional course program and planning; sources for recruiting faculty and staff, attracting and retaining faculty and staff; and how to ensure the quality of faculty and staff. Analysis of the interview data as a whole also revealed some larger themes. Specifically, the study found that: Establishing an IBC is a non-linear, iterative process. While the overall momentum was forward, the process of establishing an IBC was characterized by significant back stepping, overlap, and repetition. Establishing an IBC is not an entirely rational process. Interviewees noted that the process is typically the result of several chance events and influenced by non- rational factors such as idiosyncratic leadership preferences. The decision-making process varies among institutions. At some institutions, the decision to establish an IBC was primarily a top-down process, while at others the decision-making process involved multiple stakeholders. Institutions also differed markedly in how they obtained information and their level of due diligence. The role of specific factors varies by opportunity. It is important for parent institutions to consider the unique social, cultural, political, economic, and academic factors relevant to each country when establishing an IBC to increase its chances of success. The long-term impact of IBCs is unknown. While leaders and administrators at institutions cited specific objectives for establishing an IBC such as enhancing their institution’s reputation, there is little to no evidence about whether IBCs iv actually achieve these goals or are better at achieving these goals than less costly and less risky alternatives. IBCs are inherently risky. It is ultimately impossible to understand and control for all the risks involved in establishing an IBC. Instead, IBCs require risk- tolerance and decision-making based on imperfect information. Establishing an IBC is time intensive. Institutions need be aware of the indirect costs to the parent institution in terms of staff time and salaries even if partners pay the IBC’s operating expenses. While this study identified several factors universities consider when establishing an IBC, much work still remains. Additional research on specific ways HEIs with different characteristics approach the decision-making process and whether and how these factors lead to positive long-term impacts for IBCs, for example, would be valuable. v Table of Contents Executive Summary ....................................................................................................................... iii Figures............................................................................................................................................ xi Tables ........................................................................................................................................... xiii Acknowledgements ....................................................................................................................... xv Abbreviations .............................................................................................................................. xvii Chapter One: Background, Purpose, and Research Questions ....................................................... 1 Overview ...................................................................................................................................................1