In a knowledge- eased economy, it would seem urgent that stakeholders investigate deferent alternatives to going International. Universities have not taken on a service sector leadership role in their own internationalization. Before 2006 universities have internationalization their teaching content their internal vision and operational competence have not kept pace with globalization and the transformation of society. Student mobility is the education sectors equivalent of what trade negotiators refer to as consumption abroad. All together, there are four modes of Internationalization.
A strategic type of cross-border activity of service Industries Identified by the World Trade Organization consists of delivery abroad. Where a service Is created and offered in another nation. Within the education sector, this approach would consist of faculty and academic mobility. General Issues Foreign market entry mode is an institutional arrangement that makes possible the entry of a company’s products and services, technology, knowledge, human capital, management, or other resources into a foreign country. The entry arrangement’s mode Is among the most Important strategic decisions that a school considering the
International market will have to make. Institutional arrangements with firms from different countries with different economic development involve complex factors such as host government policy, host country culture and risk, which complicate structural and resource dynamics of transactional activities Factors Considered expansions is influenced by three determinants (OIL advantages): Ownership advantages (O) of the firm, Location advantages (L) of the market, and the Initialization advantages (l) of integrating transactions within the firm.
Hypothesis A)The larger the size of a business school, the greater the likelihood of a business school entering a foreign country using an equity-based strategic mode. (B)The greater the multinational experience of a business school, the greater the likelihood of entering a foreign country using an equity-based strategic mode. (C)The greater the product differentiation of a business school, the greater the (D)The greater the market potential perceived by a business school, the greater the (E) The greater the investment risk perceived by a business school, the smaller the Advantages of the Entry Strategy
Ownership advantages The ownership advantage variables developed were: multinational of the business school, and the ability to develop differentiated products and/or services. The multinational factor consists of four dimensions, covering the orientation of the university, and the capability of its technology, administrative, and financial infrastructure to handle international expansion. The product differentiation factor covers the difficulties of establishing an overseas program, the difficulties of obtaining accreditation and the motivation for the internationalization.
Location advantages Location advantage variables consisted of two factors: market potential and investment risk. Market potential was measured using four Liker-scale items. They addressed, on a country specific basis, the demand for post secondary education, its projected growth, and the attitudes of government towards foreign market entry in consisted of five items, namely political, social and economic risk, currency repatriation risk and expropriation risk.
These issues are important because the perception of the school’s administration relating to the safety of revenues and sets can reduce a school’s ambition to locate in riskier countries even though the market potential is positive. Initialization advantages Initialization advantages include Contractual risk, Dependent variable and Control variables. In order to measure the initialization dimension of a school entering overseas markets, the perceived risks involved in sharing assets and skills with local educational organizations were determined.
The dependent variable is the mode of entry for each location overseas. Respondents were asked to provide a list of the overseas locations where they have established orgasm and to indicate the type of relationship that has been established (wholly owned, Joint venture, license, or franchise). And Control variables include an CABS accreditation variable, measured as yes or no. Accreditation occurs at varying levels including geographic location (I. E. Tate and national) and the type of the degree offered (I. E. Business, medicine). Problem The size of a business school did not appear to be a significant variable when considering investing abroad. This conflicts with several studies, which have found size effects when looking at the entry decisions of a large corporation. Our results can feed directly into mode of entry strategy. A school of any size can consider the mode of entry which appeals to its particular situation.
Small, medium and large schools will not necessarily be precluded from selecting from a variety of entry strategies. Recommendations Given the increasingly rapid generation of knowledge and the improvements in technology useful for its dissemination, there is likely to be more activity and competition in the higher education sector. Increasing technological capability is also likely to generate academic distance-jobbing, where information dissemination can e distributed around the globe – coming from and going to everywhere.
Understanding how entry modes are chosen and how they affect success is crucial both to the firms (in our case, universities), themselves, as well as the governments who are likely to expand their international education approaches. It must be noted that modes of internationalization are complex within and between different knowledge-based service firms. It this study, we have concentrated mainly on the modes of student, faculty and program mobility also have large roles to play and are keel to require different actions by universities.
Though our conceptual approach has been global, our data were obtained from only U. S. MBA programs – leaving room for additional findings from current and future programs in other nations. Focusing on these different modes, and also on different sectors and locations of knowledge- based service firms, researchers may be able to identify additional factors that are unique to the service sector. Much needs to be done to further enhance our understanding of the internationalization of knowledge-based service firms.