Managing Resources and Relations in Higher Education Institutions: A Framework for Understanding Performance Improvement

Higher education institutions (HEIs) have recently been approaching saturation in Taiwan in terms of the intensity of their development. Their educational pattern has been transformed from education of the elite to education of the masses (Taylor, Webber, & Jacobs, 2013). Moreover, Taiwan's birth rate has plummeted from 2.06 in 1984 to only 1.07 in 2013 (Ministry of Interior, 2014). As a result, increasing competition among HEIs demonstrates that these various disadvantages have jointly led to an oversupply of HEIs. If HEIs' competing against one another is currently acceptable, then it is necessary to consider the following questions: "Why do some HEIs consistently outperform others?" and "What are the implications for institutional strategy development?" (Lynch & Baines, 2004). Most of the cases within research that consider the performance evaluation of HEIs come from Western countries (Colbert, Levary, & Shaner, 2000; Korhonen, Tainio, & Wallenius, 2001; Abbott & Doucouliagos, 2003) while few studies have been conducted regarding Asian HEIs' performance, especially those in Taiwan. In particular, concerning public and private HEIs, Taiwan's public HEIs possess more educational resources and better reputations compared to private institutions; therefore they better meet students' needs and attract more public donations and institutional funds. For this reason, exploring the performance and development of HEIs in Taiwan is an interesting and meaningful research issue (Beard, 2009).HEIs can be deemed well-structured organizations (Kale, 2013). Although consideration factors related to institutional development and institutional growth differ greatly among them (Chapple, Lockett, Siegel, & Wright, 2005), some scholars have suggested that performance evaluations still should contain measurements of research, teaching, and service outcomes (Henry & Neville, 2004; Nevilli & Henry, 2006; Parks & Riggs, 1993). By referring to discussions in the literature about organizational management, one can further understand the keys to success. From a systematic viewpoint, factors that influence organizational operations can be roughly divided as internal and external (Lee, Lee, & Pennings, 2001). In terms of internal factors, scholars have focused on the quantity and attributes of internal resources using the resource-based view (RBV; Barney, 1991; Penrose, 1959; Wernerfelt, 1984). They have suggested that the development and performance of an organization depends on the quantity of resources it owns (Barney, 1991). Regarding external factors, relational resources bring HEIs several advantages that enable them to resolve competitive conflicts, obtain greater learning benefits, deal with turbulence and environment uncertainty, and absorb external resources (Feldman & Schipper, 2007; Leana & Pil, 2006; Walter, Auer, & Ritter, 2006). Accordingly, assets gained from external relations and leverage effects are called social capital (Leana & Van Buren, 1999; Nahapiet & Ghoshal, 1998; Yli-Renko, Autio, & Tontti, 2002).This study builds on previous work by explicitly addressing from internal and external sources the underlying mechanisms that facilitate the improvement of HEIs' performance. Although the RBV and social capital theory have achieved remarkable results in studies in the field of education, little research has been conducted on resource variables specific to HEIs. Therefore, exploring the relationship between resource variables and institutional performance will give rise to practical implications regarding institutional governance and theoretical foundations of institutional research, as well as significant insights to HEIs in other countries facing similar situations.The present study has three purposes. Firstly, it explores how HEIs utilize educational resources to realize and improve their performance by using the RBV to divide organizational resources into two categories: university reputation (Boyd, Bergh, & Ketchen, 2010) and slack resources (Nohria & Gulati, 1996; Su, Xie, & Li, 2009; Voss, Sirdeshmukh, & Voss, 2008). …