University Auxiliary Services: A Review of Factors Impacting Privatization Decisions
Author: Gordon, Rita S.
Date: 2019-04-00
Type: Tests/Questionnaires
Subjects: Universities,Ancillary School Services,Privatization,Books,Retailing,Dining Facilities,Decision Making,Expectation,Outsourcing,Satisfaction,Preferences,Specialization,Facility Improvement,Financial Support

The dynamics of higher education funding present unique challenges and opportunities for administrators. One method university administrators employ to contain expenses and provide additional revenue is privatization of academic and non-academic services. The purpose of this quantitative study was to investigate the specific factors considered in a decision to privatize bookstore and/or dining service operations, and perceptions about whether the post-privatization decision met pre-privatization expectations. Gordon's (2019) Privatization Decision Framework was created based upon existing research and then used to develop survey questions. Twelve pre-privatization decision factors, nine post-privatization contracted relationship expectation factors, overall satisfaction with the privatization decision, and a privatization decision reflection were utilized to answer the research questions. An online survey instrument collected data from 140 auxiliary services professionals at public, four-year universities across the United States, representing 45.0% of such institutions who are members of the National Association of College and Auxiliary Services; responses were proportional to the regional membership of this organization. Full-time equivalents (FTEs) ranged from 500 to 110,000 students with a mean of 19,642 students. Overall, over half of the university respondents 79 (56.4%) are contracting their bookstore operations, and satisfaction with the bookstore contractor's performance generally met expectations with a mean of 3.87 (out of a five point scale with five being greatly exceeded expectations). The top areas of satisfaction included: transfer of inventory costs carried by the contractor, management specialization/expertise, and transfer of risk externally. Most respondents (85.5%) also indicated satisfaction by noting a strong preference to contract with the same bookstore contractor if the decision could be made again. One half of university respondents indicated that their dining services operations are under contracted management. Overall satisfaction with the dining services contractor's performance generally met expectations with a mean of 3.54 (on a five point scale). The highest areas of satisfaction were: management specialization/expertise, transfer of risk externally, and external capital. Most respondents (73.0%) indicated overall satisfaction with a strong preference to contract with the same dining services contractor if the decision could be made again. In addition to overall satisfaction, respondents were asked to indicate the level to which their contractor met their pre-privatization goals related to nine expectation factors, and all factors for both bookstore and dining services contracts were rated as at least generally meeting expectations. Six of the nine post-privatization expectation factors had a significant difference between the bookstore and dining services operations in the factors of: external capital for renovation or facilities construction, inventory costs carried by the contractor, customer service/quality improvements, external legal pressure, human resources/staffing issues, and management specialization/expertise; for all such factors, the bookstore contractor yielded higher levels of satisfaction. Respondents were asked to indicate the extent 12 factors influenced their decision to privatize bookstore and dining operations. Two decision factors within both the bookstore and dining services operations were found to have a statistically significant relationship which impacted the university's decision to privatize: external capital for renovation or facilities construction, and human resources/staffing issues. This study provides new information to university leaders who are contemplating a privatization decision through the examination of pre-privatization factors, post-privatization satisfaction, and the decision respondents would make regarding their current contracted services, given the current knowledge of the contractor's performance.