Managing core university business performance in the wake of ‘fees must fall’ context: a legitimacy theoretical perspective

This paper uses the legitimacy theory as a lens to identify the most sustainable performance model to defend and maintain the legitimacy of higher education institutions in the midst of ‘fees must fall’ crisis. The body of evidence presented demonstrates that universities have at least seven critical stakeholders that control resources needed for survival, growth and legitimacy. Using this evidence, this study builds a model that looks at the impact of fee income and workload on success. The model was tested using annual time series panel data for the period 2009-2013 across 23 public universities in South Africa. The model examined the effect of fee income and workload on success rate. Basing the arguments on the notion that students are a critical constituency, with a strong influence on the amount of fee income an institution may amass, the model tested the relationship between performance and fee income using success rate as a proxy for performance. The findings showed that not only is fee income a stronger predictor of success rate, but also that fee income is negatively related to success rate of students. Policy implications of the findings are discussed.

Keywords: higher education, fee income, institutional theory, performance legitimation, workload model.
JEL Classification: I23, D31, L26