Principal Versus Agent: Are Universities Doing Their Jobs?

Carla Serfontein ()
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Carla Serfontein: University of the Free State

A chapter in Impacting Society Positively Through Technology in Accounting and Business Processes, 2025, pp 129-150 from Springer

Abstract: Abstract This article considers the principal–agent relationship between top management at universities as agents and the government and students as principals to assess the extent to which the top management of South African universities adhere to the primary objective of their stakeholders. Quantitative data were used first to determine whether universities provided affordable education by focusing on the increases in tuition fees at a sample of publicly funded South African universities from 2010 to 2019 (explicitly excluding the impact of COVID-19). Secondly, an analysis of the enrolments and graduates at the 26 South African public universities for a sample of Classification of Educational Subject Matter Categories (CESMs) was analysed from 2010 to 2021. The findings were then interpreted using the Future of Jobs Survey of 2020 by the World Economic Forum to determine whether universities served the main objective of their primary stakeholders, that is, to deliver affordable, relevant education that will enhance employability. From the analyses performed and literature reviewed in this study, in South Africa, the country with the highest unemployment rate and income inequality in the world, publicly funded universities failed to (a) deliver affordable education, (b) offer relevant education that would adequately prepare graduates for future employment in the changing global business environment; and (c) fulfil their responsibilities as agents of their principals. The information provided in this study could be a starting point for top management at universities to determine a strategy to ensure that they can efficiently act as agents in the best interest of their principals.

Keywords: Agency theory; Universities; Employability; Technological disruption; Top management; Public universities (search for similar items in EconPapers)
Date: 2025
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Persistent link: https://EconPapers.repec.org/RePEc:spr:prbchp:978-3-031-84885-8_7

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DOI: 10.1007/978-3-031-84885-8_7

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