There are profound similarities between how universities and schools are managed. David Teece’s paper on, ‘Managing the university: Why “organised anarchy” is unacceptable in the age of massive open online courses’ (2018) highlights many of these parallels well.
Managing organisations in an environment, “subject to unforecastable shifts” (Teece, 2018), particularly resonates. The international private education market in China is not only bloated and highly competitive but also increasingly volatile. This is because of several changes to the sector Beijing has introduced. Significant among those changes are new tax laws where individuals will now pay tax on the perks companies give to overseas staff, such as paying employees children’s private education and housing allowance. Along with this, Beijing has made it illegal for private companies to make a profit from after school education. Private educational institutions also may not conduct online after-school tutoring via instant messaging, video conference or livestreaming platforms. Further legislation is set to follow. Multi-billion-dollar companies listed on the New York stock exchange have collapsed. The motivations behind this could be seen as socialist in essence, but never are such turbulent mechanisms that transparent.
The knock-on effect of this for all international schools in China is a volatile environment and, in particular, disruption regarding resources and competences. The strategic capability as defined by Johnson, Scholes, Whittington (2007) are resources and competences that an organisation needs to move forward with confidence. The parts that make up the tangible resources are such things as the buildings, the teaching infrastructure and the staff. In a small way, there is a crossover between intangible and tangible resources with staff. Staff are a physical and non-physical asset. The school relies on their knowledge and expertise to deliver results. The results determine the reputation and the reputation is a key marketing stratagem to engage clients.
Like universities, international K12 private education is a globally competitive environment (Slaughter and Leslie, 1997) that requires a form of strategic management similar to the dynamic capabilities framework (Teece, 2007; Teece et al., 1997). The framework assists managers in analysing sources of wealth creation by using processes such as sensing, seizing, and transforming. There is an emphasis on identifying internal opportunities in times when there are rapid technological changes that threaten path dependencies. The framework suggests that recognising new opportunities is time better spent that strategizing, although one would think both of these activities imbricate.
What particularly resonates here is the emphasis on internal opportunities. Top international schools in China rely on overseas staff to populate the teaching courses they offer. These staff need to be experienced in delivering board specific examination syllabuses, like the IGCSE’s, A level’s and IB International Program. Basically, teachers from the UK are at a premium. The present situation has made recruiting native staff very difficult. Not only are there restrictions because of Covid, but financial incentives to come to China to work have also been rocked because of the changes in tax. This in turn makes high school fees less palatable compared to bi-lingual schools, which has caused much disruption to school’s threshold levels.
It makes sense to compete at a level that creates the greatest impact within the market. In China, the reputation of schools, beyond the generic stereotypes of British, American, Australian educational systems, counts for little. Reputation is built on results and results primarily depend on the quality of the teaching staff, an internal strategic capability that is crucial if an educational institution in China wants to build a competitive advantage.
Johnson, Gerry; Scholes, Kevan; Whittington, Richard. 2007. Exploring Corporate Strategy
Academic Capitalism: Politics, Policies and the Entrepreneurial University by Sheila Slaughter and Larry L. Leslie. Johns Hopkins UP, 1997
Teece, David. 2018. Managing the university: Why “organised anarchy” is unacceptable in the age of massive open online courses.
Teece, David J; Pisano, Gary; Shuen, Amy., 1997; Dynamic Capabilities and Strategic Management