Ansoff growth strategies, funding policy and the performance of universities in Kenya

Abstract

With the rise in reduced government funding, global competition and demand higher education, universities have adopted strategic approaches to stay relevant and enhance perfonnance. This study analysed the relationship between Ansoff growth strategies, funding policy and the perfonnance of chartered universities in Kenya and specifically examined the effect of Ansoff growth strategies comprising of market penetration, product development, market development and diversification on performance of chartered universities in Kenya and the moderating effect of funding policy on these strategies. Strategic Fit Theory (SFT), Resource-Based Theory (RBT) and the Contingency Theory provided an understanding of how strategic alignment and resource capabilities enhance university performance. A cross-sectional research design was used for data collection and analysis. Six chartered universities were randomly selected for a pilot study from a population of 60 and a census conducted from the remaining 54 comprising 22 private and 32 public Kenyan chartered universities. Primary data was collected, from vice-chancellors or senior management officers designated by the vice-chancellors using a structured questionnaire and SPSS V.26 was used to summarize descriptive statistics for frequencies, percentages, means and standard deviations. Inferential statistics and Pearson’s correlation analysis were computed and hypotheses tested using simple and multiple regression analysis as well as PROCESS macro. The correlation analysis results established a significant correlation between market penetration, market development and funds generation policy and university performance (p < 0.05). Product development, diversification strategy and funds allocation policy, however, had an insignificant correlation with performance (p > 0.05). Hypotheses test results for market penetration strategy ([3 = 0.356, p < 0.05) and market development strategy (B = 0.357, p < 0.05) reveal a significant influence of the strategies on university performance, demonstrating their effectiveness in enhancing performance. In contrast, product development (B = 0.054, p > 0.05) and diversification strategies (B = -0.244, p > 0.05) did not show significant effects, implying that their contribution to performance is contextual. The study concludes that prioritization of market penetration and market development with supportive funds generation policies, significantly improves university performance. However, product development, diversification strategies and funds allocation policy distinctly were significant although the joint application of Ansoff growth strategies positively enhance performance of chartered universities. Universities should therefore strengthen revenue generation and apply a mix of Ansoff growth strategies for sustained performance.