Accounting and analytical support to strategic management of higher education establishments based on the theory of constraints

Abstract

The article explains the need for reforming the system of the domestic higher education establishments management by applying modern approaches, based on the theory of constraints, to the strategic management. The fundamentals of the theory of constraints are analysed, the special aspects of the theory application in terms of higher education establishments management are defined and the basic implementation steps of the theory are identified. The limiting factors affecting the achievement of strategic goals by business undertakings are defined and comparative analysis of the impact of those factors on the activities of educational establishments is presented. It is demonstrated that the main limiting factors, as applicable to educational establishments, include the following: limited capacities (resources potential), market constraints and demographic constraints. Taking account of the special aspects of educational services, duration period for which is determined by the Law of Ukraine “On Higher Education”, it is demonstrated that the time constraints, as applicable to educational establishments (as opposed to business undertakings), do not play a key role in achieving strategic goals. It is proposed to distinguish a separate group of limiting factors, in particular, the “demographic constraints”, taking account of which, in terms of educational establishments, allows the management personnel to timely coordinate and revise the development strategy of an establishment.
It is demonstrated that, as applicable to higher education establishments (as opposed to business undertakings, where the key indicator is company profit or company value), the key performance indicators in terms of strategic decisions include the following: increasing competitiveness of the educational establishment by providing high-quality educational services, increasing the overall number of students engaged at the higher education establishment, graduate employment rate and professional competence of students acquired at the educational establishment.
The role and functions of management accounting and analysis in the system of management of higher educational establishments, based on the theory of constraints, are defined. In order to control the constraints and the possibilities to affect them, a system of analytical indicators in terms of each group of constraints is proposed. For each group of internal limiting factors of “capacities constraints”, the indicators are grouped according to three topics: technological constraints, personnel constraints and financial constraints. The indicators proposed by the author that are used for the analysis of impact of external limiting factors on the results of the activities of educational establishments are grouped under two topics: market constraints and demographic constraints. The proposed system of analytical indicators shall become the basis for drafting management reports by higher education establishments.