Academic journal article International Education Studies

The Study of Government-University Relationship in Malaysian Higher Education System

Academic journal article International Education Studies

The Study of Government-University Relationship in Malaysian Higher Education System

Article excerpt


Recently the Agency Theory is extensively used in the study of government-university relationship in higher education system. The theory expounds the main concept of information asymmetry and goal conflict in the relationship. In this paper these two concepts are used to explain efforts undertaken by the Malaysian Federal Government to improve the quality of higher education and their struggle to reform the funding system in public universities. This move is parallel to the implementation of National Higher Education Strategic Plan Beyond 2020 which was announced in 2007. Interestingly, this study found that public universities in Malaysia are working positively towards materialising the government objectives regardless of the government funding cuts. Indeed, the government initiative to keep track of the universities performances by using the monitoring, controlling and incentives mechanisms have helped reduce the agency problems in the government-university relationship.

Keywords: agency theory, strategic planning, funding, higher education

1. Introduction

In recent years, the Malaysian Government has introduced some extensive changes in its strategic planning for public universities to stimulate competition in the higher education sector and to ensure that the industry follows the objectives set by government (Ministry of Higher Education, 2007a, 2007b). Under the aegis of the National Higher Education Strategic Plan beyond 2020 and National Higher Education Action Plan 2007-2010, the government has introduced extensive reforms in its funding mechanisms for higher educational institutions. In addition, to facilitate successful execution of the strategic plan, the government has established 23 Critical Agenda Projects or CAPs. Here, each of CAP has its own objectives, indicators and targets that need to be achieved (Embi, 2011). This CAP is divided into five pillars: (1) governance: (2) leadership: (3) academia: (4) Teaching and Learning (T&L): and (5) Research and Development (R&D) (Ministry of Higher Education, 2007a).

Meanwhile, the Programme Management Office has been set up at the ministry level and Institutional-Programme Management Office at the universities level. The purpose of establishing these offices is to provide support at both ministry and university levels in the implementation stage of planning and executing the National Higher Education Strategic Plan Beyond 2020. The universities are required to provide information about the key performance indicators set by the Ministry of Higher Education for the purpose of monitoring and controlling. Information provided by the public universities is audited by the government, through its steering committee sets to oversee the universities performances according to the strategic plans. As stated in the National Higher Education Strategic Plan 2007-2010 the Programme Management Office operating unit includes the: (1) Project Delivery; (2) Process and Mentoring; (3) Monitoring and Reporting; (4) and Communication (Ministry of Higher Education, 2007b). From the Agency Theory perspective, the implementation of monitoring and auditing system helps the principal to obtain the required information on the universities performance and thus mitigates any agency problem that may surface in the process. As a key principal in this relationship, the government has established such system to guarantees that the return on its investment in higher education is secured (Lane & Kivistö, 2008). The existence of Malaysian Research Assessment Instrument is one of the way how research performance in public universities has been scrutinized over the years.

This study investigates the effects of government strategic plans and funding reforms initiated by the Federal Government on public universities in Malaysia. The university is expected to incorporate the reforms wholly as stipulated by the government. Thus, this study intends to investigate whether the funding reforms are the leading cause towards achieving the desired changes in the universities. …

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