Assessing universities’ impact of interactions: A signal based perspective

Magnus Holmen
Halmstad University

Daniel Ljungberg
School of Business, Economics and Law, Goteborg

Robert Dalitz
University of Canberra

Even though the university has long been considered to be a relatively stable institution, it is well-established that university sectors world-wide are facing an on-going transformation. Changes in external pressures, such as globalization of education and research, university deregulation and increased reliance of competitive research funding - are reshaping the external environment of universities (Bonaccorsi, 2014; McKelvey and Holmén, 2009). This ongoing transformation have led some scholars to consider universities as organizations that: 1) engage in emerging strategies; 2) compete for resources and prestige; and 3) increasingly are re-organized by vice-chancellors or other prominent university leaders in response to external pressures. Beside these early attempts of understanding university transformation, there has been very little theorizing around how universities interact with stakeholders, such as industry, government and students across the three roles of research, education and social interaction (third mission). Thus, the purpose of the paper is to characterize how partially autonomous universities act to improve their relation to external stakeholders by using signals as the mechanism for influencing how stakeholders evaluate and and select university services. We illustrate our arguments by illustrating how the universities and policy makers may operationalize signals into specific performance measurements (metrics) as evaluation, and its implications from the perspective of selection by means of signals.

To derive a model of university interactions, we address the question of what a university does by characterizing the benefits of university activities across its three roles and for four types of stakeholders (firms, students, scientific community, and society). Then based on the literature we address how universities signal to the stakeholders across these twelve relations, taking care to distinguish ‘normal’ signals from costly signals. Although most types of stakeholders are more closely connected to one of the university’s roles than the other two roles– e.g. students are commonly mostly concerned with education – in practice each of the four stakeholder types may benefit from any of the roles, and thus may respond to the signals that universities send. As a first proxy, students, firms and government and policy actors are primarily interested in education while scientific communities are concerned with research. However, firms may be very interested in both research and third mission as these activities and outcomes may solve some of their problems, while students may care about the quality and reputation of the university’s research as that provides status to their education or because of personal or career-related interests in science. This means that all stakeholders are likely to have some interest for all of the university roles and that universities should signal to stakeholders so that their future services will be selected. However, stakeholders will not be equally motivated and able to screen all of the universities activities. For example, students are more likely to invest in screening and comparing universities’ reputation, expected future salary based on educational profile and perceived educational quality than e.g. the universities’ third mission activities, since the former are more closely related to the education offered by the university, and thereby the benefits this education may bestow on the student.

A university can signal almost anything, e.g. by posting selected information on a university webpage or in the annual report, but only a limited number of signals are costly (e.g Stiglitz, 2002). Costly signals differ from mundane signals in that they are hard to imitate, e.g. by being expensive or time consuming to create, or difficult to work around. A costly signal may be related based on legislation or accreditation, or it may be based on the need for significant and time consuming investments. Educational costly signals can include e.g. having a large well-known alumni working in high positions in relevant industries, research costly signals include ability to publish in prestigious (high ranked) journals or publishers or having an internationally recognized research staff, such as Nobel laureates. Third mission costly signals include strategic partnerships with internationally competitive firms, successful academic spinoffs or regular media attendance in issues of societal concern. Some costly signals are regulated and some of the signals can be measured by specific, and commonly used, metrics, such as publication counts.

We conceptualize metrics as institutionalized signals, in the sense that they are more or less standardized performance indicators which can be used to assess university performance in its multidimensional output space (cf. Bonaccorsi and Daraio, 2007b). The most apparent example might be the use of the number of scientific publications and their citations, which now is a standardized way of assessing research performance, which are used as a metric to signal research productivity (and implicit assumptions are commonly made that it also signals research quality). Another example is the (increased) use of a university’s number of patents and/or ventures founded as a metric for the degree of research commercialization.