The effectiveness analysis of the university-business interaction institutional mechanism and recommendations for its improvement

Abstract

Object: The purpose of this study is to provide justification of Business Interaction Centers on the basis of organisational models, determine its functions, tasks and indicators for evaluating its work for different types of universities, taking into account business interests ensuring direct and most active participation of the business community in performance of educational, scientific and entrepreneurial functions of the university.

Methods: The methods are content, comparative, retrospective types of analysis.

Findings: The article includes the results of analysis of the effectiveness of university-business interaction in Kazakhstan, based on the Matrix of characteristics of the UBI institutional mechanism and the profile of an entrepreneurial university, which has found that formally all universities have required departments for interacting with business for entrepreneurial, educational and scientific activities, but the majority of the universities studied do not have a integrated center for interaction with business.

Conclusions: Increasing the effectiveness of interaction with business, universities are required to make changes to their organizational structure and create the integrated unit for interaction - the Business Interaction Centre.

Introduction

Kazakhstan is on the verge of fundamental changes in the higher education system related to the adoption of the Law of the Republic of Kazakhstan “About amendments and additions to some legislative acts of the Republic of Kazakhstan on the expansion of academic and administrative autonomy of Higher Education Institutions”. These changes ensure to move to a new level of reforming the higher education system making it more open for interaction and adaptive to challenges, respond to rapidly changing demands of the business and economy, give new opportunities for development of a strategic partnership between business and universities. Also it has launched processes reducing the state's role and strengthening the market mechanisms, when universities work in the labor market, the educational services market, the scientific and technical products and services market (Belash et al., 2012) and the innovative products and services market. The universities have to meet demand generated by the economy and business with quality supply of graduates, basic and supplementary educational programs, research and innovative products and services. The universities face the most important challenge - their inability to meet demand fully arising in these types of markets. The negative consequence of this unsatisfied demand is development of infrastructure for transfer of knowledge and technology outside the higher education system. The development of the markets of supplementary and business education, and consulting is due to the growing demand for human resources training with additional skills, for new management technologies and applied research in the competitive environment. These services are provided by native and international training and consulting companies, research agencies, training centers and corporate universities. One of the reasons such educational and research structures existence is universities' misperception of real business needs. That is why business does not choose traditional educational institutions expediting the process of transferring competencies at the lowest cost. Thus, universities have many potential competitors, which take on main universities' activities forming its own system of interaction with a business community, promote online and e-learning offering not only specialized training for their companies, but undergraduate and Master's programs; provide consulting services and conduct applied research. Taking into account this negative and threatening factor for the system of

higher professional education the so-called "entrepreneurial universities" (Clark, 1998) become effective in terms of interaction with the business community. According to B. Clark, the characteristic “entrepreneurial” includes conscious efforts for “institutional construction,” which provides transformations ensuring the university's competitive advantage in the future. Moreover, these transformations require significant changes in the organizational structure of the university.

The authors' personal contribution is UBI effectiveness assessment based on analysis of organizational structures of universities of various types in terms of carrying out entrepreneurial functions in four types of markets, as well as availability of an integrated unit for managing interaction with different partners such as business, government agencies and NGOs, on the basis of one of the internal organizational models. Also the authors justify the necessity of such a unit, determine its functions, a mechanism of its arrangement and specifics of its work. It may be called Business Interaction Center (hereinafter the Center). The term “interaction” includes all its types from transactional to long-term: participation, contacts, cooperation, collaboration, relationship. This Center is an integrator for all departments separately interacting with business, creating conditions to form a n integrated comprehensive programme of university-business interaction (hereinafter UBI), accumulating all the information to assess the effectiveness of interaction and making decisions about future directions of this interaction.

The preliminary prerequisite is such a situation that each university has embarked on a transformation path from traditional to entrepreneurial in conditions of academic capitalism developing, budget financing reducing, academic and administrative autonomy expansion. The difference is in the stage of the university's life cycle and in the archetype of the entrepreneurial university (Bronstein et al., 2014). That is why the design and construction of organizational structures and departments of the university interacting with business, the choice of various forms of interaction, indicators for evaluating the effectiveness of this interaction will depend on the above-mentioned difference.

The main hypothesis is that provided a university has an integrated unit as a touch point for interacting with business based on one of the organizational models. It will allow any university to arrange systemic and long-term relationship with its business community. First of all, a university should become an open system, and this is the first step to transformation of traditional universities into entrepreneurial-type ones.

Literature Review

The universities, business community and government agencies are interested in aspects of UBI. The authors have been interested in researchers' works reflecting the current situation of UBI institutional mechanism. The level of development and forming infrastructure for UBI and forms of interactions are presented in the works of G. Dutrenit, V. Arza (2010), A.A. Tashkinov (2011), S.V. Shabayeva, A.L. Kekkonen (2017), D.A. Sitenko (2018), S.K. Kunyazova, A.A. Titkov, S.Zh. Ibraimova (2016). Classifications of internal organizational models of UBI (centralized/unitary, chaotic/multi-divisional, project/matrix, feder- al/holding) and their functions are described in works of S.V. Grinenko (2009), T. Vihervaara (2018), F. Brescia G. Colombo, P. Landoni (2016). The functions of universities traditional (employment, education, science) and entrepreneurial (entrepreneurship, entrepreneurship-education, entrepreneurship-science) are determined in works of A.O. Grudzinsky, A.B. Bednyi (2004), I.A. Pavlova (2016), G.A. Reznik, M.A. Kurdova (2017). The extensive literature analysis has shown that main attention is paid to the problems of transactional relations between universities and businesses in the transfer of technology and commercialization, the bias towards an accelerated transition to research universities with their low level of socio-economic results and lower demand for R&D in the industry sector due to its decrease.

Methods

The content, comparative, retrospective types of analysis as study methods have been used for effectiveness of UBI institutional mechanism as an object of the study and availability of the units in the organizational structure of the universities for UBI in four types of markets via one intermediary-unit as a subject of the study.

Results

The effectiveness analysis of the UBI institutional mechanism has been conducted with the authors' matrix of criterions of the UBI institutional mechanism (see Table 1). This matrix reveals the criterions of channels and forms of UBI via university internal departments interacting with business in different types of markets and taking part in performance of their traditional and entrepreneurial functions. The matrix has been made using: 1) Model of the matrix of institutional functions and university's roles (Pavlova, 2016),

demonstrating the exceptionality of the entrepreneurial function; 2) classification of higher educational institutions' functions during evolvement of innovation-based economy (Reznik and Kurdova, 2017); 3) general classification of the channels and forms of interaction (Dutrenit et al., 2010), with a focus on bi-directional channels and long-term interaction intensity, and 4) analysis of publications on the UBI, the most of which devoted to such topics as creation of spin off (Felm and Rodríguez, 2017), academic entrepreneurship and joint research (Dima et al., 2017).

Table 1. The matrix of criterions of the UBI institutional mechanism for Kazakhstan universities

According to the matrix in Table 1, the greatest interest by long-term relationships criterion is interaction via bi-directional channels. These channels provide exchange of knowledge (Dutrenit et al., 2010) and they prove the education entrepreneurial function comes the first. This is confirmed by fulfillment of the priority role of universities in stimulating innovation (Christopherson et al., 2014) and accomplishment by universities of their third mission (Kitagawa et al., 2016). If the choice of the university's priority functions depends on the economic effect they have impacted, then the university's activity in commercialization of

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knowledge or multifaceted extra budgetary educational activity gives the greatest economic effect in terms of the university's development. The income structure analysis of Western universities has confirmed this fact. Therefore, when compiling a profile of an entrepreneurial university by its functions, provided that traditional functions are already being implemented as historically established, it is necessary to follow the priority functions for UBI of Kazakhstan universities: the first priority is educational-entrepreneurial, the second priority is entrepreneurial and the third priority is scientific-entrepreneurial.

The choice of Kazakhstan's universities (see Table 2) highlighted in the article for the analysis has been based on the National ranking of universities 2019. The situation with chosen universities has shown an identical picture in terms of the formation of organizational structures and units for interacting with business depending on the university's profile – multidisciplinary, technical, humanitarian-economic.

Серия «Экономика». № 2(98)/2020

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Table 2 presents the results of websites content analysis of the three profiles of universities in order to study information about their organizational structures construction for the following: 1) the availability of units that interact with business in different types of markets via the implementation of their traditional and entrepreneurial functions, 2) the availability of an integrated unit liable for interaction with business.

In general, the analysis of the universities organizational structures and their divisions interacting with business has found true of the above mentioned hypothesis that all civilian universities, which work for the needs of business are entrepreneurial and they have all the necessary infrastructure for implementation of their entrepreneurial functions.

Traditionally in Kazakhstan, the main form of interaction with business is job placement of graduates (Borbasova et al., 2019). The employment indicator plays an important and dominate role when checking the quality of universities and one of the indicators of their activity effectiveness. The focus of these units is mainly aimed at development, first of all, of technical and professional competencies contributing to the most effective employment of students, graduates and young professionals.

With regard to educational services, their significance and first priority begun in the world in the nineties of the twentieth century, when problems of organizing mass higher education had manifested in a global competitive market environment. This trend has led to the understanding that not only science, but also the educational activities of the university should be transferred. The UBI is on extremely low level in the market of complementary education in Kazakhstan. Moreover, this market is highly competitive and it is represented by training companies and corporate centers offering applied training demanded by business. Instead of it the universities more focus on the educational needs of students, teachers and applicants.

The interaction of business and universities in the market of scientific and technical products and services is mainly carried out through consulting services and contract research. The main indicator is amount of financing for consulting and contractual work and the information on fulfilling these directions is classified. In the National Report, the main units which interact with business on research activities are represented by 130 laboratories (Natsionalnyi doklad, 2019).

The entrepreneurial function of universities in the market of innovative products and services is implemented mainly by commercialization offices, business incubators and technology parks, which are represented in numbers of 24, 24 and 9, respectively, at the end of 2019 (Natsionalnyi doklad, 2019). Currently, the universities pay serious attention to development of infrastructure for entrepreneurial activity, especially youth entrepreneurship through start-up centers (Kunjazova et al., 2016) and the startup community (Sitenko

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et al., 2018) in Kazakhstan. In this regard the organizational structure of Karaganda State Technical University deserves special attention, in which there is a Department of Innovation and Entrepreneurship implementing time entrepreneurial activity of the university and interacting with business.

Particular attention in the analysis of organizational structures was given to availability of a unit as an integrated center for interaction with business. The analysis found the following situations:

1. there is no unit or responsible person for contacts with business;
2. there is a call-center or a contact-center;
3. there is a unit or responsible person for contact with business;
4. there are several units for contact with business in difference directions, but without coordinating with each other.

The first situation when entrepreneurs simply don't know who to contact for interaction is typical for universities which are only embarking on the path of transformation, regardless of their forms of ownership and legal status. It involves traditional forms such as job fairs, career days, presentations of employing companies and active including business in educational and research processes.

The availability of a call/contact-centre is typical for humanitarian and economic universities. It greatly facilitates communication processes with the external environment, if an operator prompt responses to requests and he/she has a high level of competence identifying appliers' needs and making decisions to whom to redirect their requests.

The most important analysis of the situation with availability of the unit for interaction with business and their functions. The analysis has found only three universities having such divisions. The first is Career and Business Partnership Department with traditional forms of interaction such as job placement and student internships; the second is Entrepreneurship and Partnership Centre with student start-ups; the third is Strategic Development and Partnership Department for strategic partnership with national and international organisations, universities and enterprises. Although the key word in the name of these divisions is “partnership”, every university has a completely different meaning the main functions of such a division. Additionally, due to established practices and experience of a particular university none of the existing organizational models of these units do not reflect in their pure form.

The fourth situation is more typical for the polytechnic and research universities, which are represented by decentralized structures, where there is no integrated center in the organizational structure, except for Karaganda State Technical University. Interaction with business is carried out both by units responsible for interaction and the teaching staff of departments. This leads to duplication of functions between different departments and struggle for resources. In this case, business representatives are forced to simultaneously maintain contact with several representatives located in different departments on various issues and at different levels, which does not allow to make up an integrated comprehensive UBI programme.

Discussions

Based on the results, the article proposes to highlight a position for an employee responsible for UBI in one of the existing units, or to create a completely new unit, as an intermediary to coordinate UBI and to plan an integrated program for this interaction at a higher management level of a faculty or university, taking into account the existing organizational structure of management, financial capabilities, models of corporate governance practice (Brescia et al., 2016). When choosing the organizational model and functions for the Centre, the following parameters should be taken into account: 1) the archetype of an entrepreneurial university (research-entrepreneurial, technical-entrepreneurial, innovative-entrepreneurial, commercial-entrepreneurial) (Bronstein et al., 2014); 2) the units interacting with business, their functions and placement in the organizational structure; 3) the stage of the life cycle of an entrepreneurial university; 4) types of business by the classifications such as small-medium sized and large organisations, sectors focuses, local/ regional/ national/ international geography (Kitagawa et al., 2016); 5) location of the university. The main functions of the Centre, regardless of the chosen organisational model, are presented in Table 3.

The expert-analytical function is obligatory for the Centre. It consists of analysis and then continuously monitoring the university's internal and external environment (Belash et al., 2012), taking into account the peculiarities of its location and the region needs for which it works, studying the needs in training and scientific and technical services and products of the business community, students and staffs.

The analysis of the internal environment for supporting of universities is carried out for indicators for three areas: infrastructure, management and employees. The implementation of the expert-analytical function in the external environment analysis of the university requires close cooperation with their Marketing department and it includes a list of market research providing the values of indicators of the markets.

Table 3. The main functions of the Business Interaction Centre

The second important function of the Centre is organizational, which is performed in order to expand the scope of interaction and develop relations with potential partners of the Centre. This involves to organize a system for registering business contacts and Customer Relationship Management, coordinate the work on fulfilling orders to provide complete and consistent responses to customer requests for maintaining a positive image of the university as a reliable and responsible partner for business.

The financial-economic function of the Centre is directly related to the educational-entrepreneurial function, entrepreneurial function and scientific-entrepreneurial functions of the university attracting extrabudgetary funding.

Special attention is paid to description of the functions which become key depending on a choice of the organizational model. If the university chooses the unitary model, the key functions are decision-making and coordinating the activities of the university in the search, attraction and involvement of business partners. The main goals of this unit are: continuous collection, systematization and updating of information on key scientific and educational areas of the university and the relevant competencies of its employees, the search for potential partners, conducting preliminary negotiations with companies as potential partners.

When choosing the multi-divisional model, the Centre should perform the functions of strategic planning and control of many distributed units, play the role of organizer, providing methodological support and determining the working order of university departments with business partners. The Gentre should have information about the main directions of the university's activities and act as a “single window”, which is able to formulate a request from business for a specialized unit and organize interdisciplinary project implementation, but rarely participating in negotiations with business. At the same time, university departments carrying out work for the enterprises' orders have significant autonomy.

The key function of the Center using the matrix model, is to implement project management and provide service support for projects in joint activities. The main organizational substructure implementing a specific project is a group of university employees, which is called a project group, which is established to implement a new university product. This group operates within the mission, strategic plan and charter of the university, while it has a high degree of independence in the choice of methods for solving the problems set in the project tasks. The control of its activities is carried out according to the results of work, the distribution of earned money is carried out according to the agreements with the university on funds sharing.

Without doubts, many issues of both internal and external nature will occur when organizing such Centres, but for establishing viable Business Interaction Centres, it is necessary to take into account mutually beneficial interests of all the actors (Rybnicek and K^nigsgruber, 2019) which will be a driver for successful interaction.

Conclusions

The positive changes occurred in Kazakhstan's education law have expanded the possibilities of academic and administrative autonomy for implementation of academic freedom and mobility, the business's participation in activities of universities and formation of positions of universities as open systems with entrepreneurial culture. At the same time, the universities continue to be closed organizations with complex internal structures and business often does not imagine where the unit they need is located, which is responsible for a specific area or implementation of specific projects. The center-intermediary for interaction with business – Business Interaction Centre as an integrator for all departments separately interacting with business solves these tasks successfully taking into account mutual interests. The scientific novelty and practical value of the results are in: the created profile for an entrepreneurial university by its functions with priority educational and educational-entrepreneurial functions; substantiation of creation Business Interaction Centres with the basic unified functions such as expert-analytical, organizational and financial-economic, these Centres' tasks of and indicators for efficiency evaluation of UBI; additional functions depending on the chosen organizational model; the parameters for choosing a suitable organizational model for the Business Interaction Center.

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