Influence of Diversification Innovation on Revenue Streams Sources of Public Universities in Kenya

IntroductionThere is hyperbolic pressure globally in higher institutions of learning to enlarge opportunities for enrollments whereas rising the standard of education offered, however, countywide governments aren't assigning sufficient funds for them.For example, in Australia and European countries there's a mentioned reduction in their provisions for higher institutions of learning, despite the very fact that European colleges are for the most part funded by the state (Muscio, Quaglione & Vallanti, 2013).Subsidizing for higher institutions of learning in Ireland, Lithuania, and the UK reduced by around thirty five percent from the academic year 2008-2009 to 2013-2014 (European University Association, 2014).Since 2009, Italian public universities have lost roughly ten thousand academic staff and scholars; meantime, 'state funding for scholarships was reduced by ninety percent from 2010 to 2011 and by other fifty percent in 2012' (Katsomitros, 2012).American states allotted, averagely, twenty eight percent less for higher education in 2013 than they did in 2008 (Oliff, Palacios, Johnson, & Leachman, 2013) throughout those five years, eleven states cut their funding for higher education by a third or more per student.To cover this financial gap, student tuition fees have been on the increase.Tamayo-Torres, Ruiz-Moreno, and Verdú, (2010) argues that because of the instability and dynamic nature of business environment, most organizations are engaging in incessant and periodic strategic innovation.Therefore, in order to realize sustainable competitive advantage and increased revenue streams in unstable and dynamic environment, organizations must strengthen their innovative capabilities.A good number of scholars have established that well performing institutions use diversification innovation so as to increase their experiences, skills, networks, resources, competencies and technologies which is a prerequisite to outstanding performance (Awino & Mutua, 2014).This implies that strategic innovation is a forebear to the increase of revenue streams sources in universities, therefore, strategic innovations are necessary for the achievement and control which ultimately leads to sustainable financial performance of universities.Kilonzo, (2011) opined that most Kenyan public universities admit students who sponsor themselves as a source of revenue, because, as compared to the ones that the government of Kenya sponsors, they pay a little bit higher tuition fee.However, in the last three years the quality assurance audit led by commission of university education closed a number of public university satellite campuses which were supposedly revenue centers for the public universities.Another twin tragedy was the crackdown by the ministry of education extended to secondary schools to check on administration of Kenya Certificate of secondary school examination which is a qualifying exam to higher institutions of learning.This led to few qualifying students for admission to the increased number of universities in Kenya due to a great drop in performance.This was worsened by enforcement of the mean entry grade for university and abolishing bridging courses for failed grades.The outcome of these raft measures was extreme reduction in the catchment numbers for fresh admissions for both public and private universities implying a drop in revenue collection since tuition fees forms the major source of university income.Against the backdrop of established research gaps, the study therefore attempts to fill the knowledge gap by investigating the influence of diversification innovations on revenue streams sources in public universities in Kenya.