Determinants of financial sustainability of universities: a case of Strathmore University

Riachi, Christine Kiringa
Journal Title
Journal ISSN
Volume Title
Strathmore University
With the changing landscape in the higher education sector in the world, only the strong Universities will survive. Financial sustainability will enable the university to fund innovation to adapt to dynamic changes. In Kenya there has been a lot of changes in the higher education sector, the universities found themselves with few students thereby reducing their main source of revenue which has been tuition fees, this brought about cash crisis that threatened the financial survival of the institutions. This study sought to find out the determinants of the financial sustainability of the private universities with a focus on the revenue diversification, cost management practices and human resource competence. The study adopted a descriptive research design with the population being employees of Strathmore University. Purposive sampling was used to identify middle managers; the data was collected using a structured questionnaire as well as secondary data from the published annual report covering the period from 2014 to 2018. The study established that while cost management practices and human resource competence had significant influence on financial sustainability of Strathmore University, revenue diversification strategies had insignificant effect. The study concluded that cost management practices had the largest influence on financial sustainability of Strathmore University followed by human resource competencies and lastly revenue diversification strategies. The study recommended that the Ministry of Education and the Commission of University Education (CUE) should ensure that Strathmore University policies are aligned with the cost management practices and the human resource competencies are emphasized for financial sustainability of the institution. The various practitioners including the finance managers and heads of department will be able to understand the need to focus on cost management practices to enhance financial sustainability of their organizations. The study recommends further studies to be conducted focusing on other universities for instance by comparing the public and the private universities in Kenya.
A Thesis submitted in partial fulfillment of the requirements for the award of the Degree of Masters of Business Administration at Strathmore University Business School
Financial Sustainability, Revenue diversification, Cost management, Human resource competence