Tài liệu Analysing financial management of ulsa basis for efficient resource allocation

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THAI NGUYEN UNIVERSITY Socialist Republic of Vietnam ANALYSIS SOUTHERN LUZON STATE UNIVERSITY Republic of the Philippines ON FINANCIAL MANAGEMENT OF ULSA: BASIS FOR EFFICIENT RESOURCE ALLOCATION DOCTORAL DISSERTATION ðỖ THỊ THANH HOA (English Name: EMILY) Supervisor: Dr. JOANNA PAULA ELLAGA Thainguyen University of Economics and Business Administration (TUEBA) TNU-SLSU, 2013 TABLE OF CONTENT LIST OF TABLES ................................................................................................................................... 4 LIST OF FIGURES.................................................................................................................................. 5 ACKNOWLEDGMENT .......................................................................................................................... 6 COMMITMENT ...................................................................................................................................... 7 ABSTRACT ............................................................................................................................................. 8 CHAPTER I INTRODUCTION ........................................................................................................... 10 1.1. Background of the study ..................................................................................................... 10 1.2. Statement of objectives ....................................................................................................... 12 1.3. Hypotheses .......................................................................................................................... 15 1.4. Significance of the study ..................................................................................................... 15 1.5. Scope and limitation of the study ........................................................................................ 18 1.6. Definition of terms .............................................................................................................. 20 CHAPTER II REVIEW OF RELATED LITERATURE AND STUDIES .......................................... 23 2.1. Literature and studies review .............................................................................................. 23 2.1.1 Foreign literature ............................................................................................................ 23 2.1.2 Local literature................................................................................................................ 27 2.1.3 Foreign studies ............................................................................................................... 29 2.1.4 Local studies................................................................................................................... 41 2.2. Theoretical and conceptual framework ............................................................................... 52 2.2.1 Concept of quality and effectiveness:............................................................................. 52 2.2.2 The task of higher education: ......................................................................................... 54 2.2.3 Cameron’s Model of Organizational Effectiveness:....................................................... 55 2.2.4 The Balanced Scorecard ................................................................................................. 57 2.2.5 Applicability of the balanced scorecard model in higher education management in Vietnam 59 2.2.6 Conceptual framework ................................................................................................... 61 CHAPTER III METHODOLOGY........................................................................................................ 63 3.1. Research design................................................................................................................... 63 3.2. Determination of sample size .............................................................................................. 63 3.3. Sampling design and techniques ......................................................................................... 63 3.4. Subject of the study ............................................................................................................. 64 3.5. Research instrument ............................................................................................................ 64 3.6. Validation of the instrument................................................................................................ 65 3.7. Statistical treatment ............................................................................................................. 65 CHAPTER IV RESULTS AND DISCUSSION ................................................................................... 66 4.1. Profile of the respondent ..................................................................................................... 66 4.1.1 Gender of the respondents .............................................................................................. 66 4.1.2 Age of the respondents ................................................................................................... 66 4.1.3 The highest educational attainment of the respondents .................................................. 67 4.1.4 Monthly average income of the respondents .................................................................. 68 4.1.5 Position of the respondents............................................................................................. 68 4.2. Assess the effect of financial management in resource allocation ...................................... 69 4.2.1 Financial management of ULSA in terms of resource allocation in labor...................... 69 4.2.2 Financial management of ULSA in terms of resource allocation in equipment and infrastructure................................................................................................................................. 73 4.2.3 Financial management of ULSA in terms of resource allocation in program ............... 75 4.2.4 Financial management of ULSA in terms of resource allocation in services provision 77 4.3. Evaluating Financial management in terms of resource allocation and propose a basis for resources allocation for ULSA .......................................................................................................... 78 4.4. Regression analysis ............................................................................................................. 80 4.5. Hypothesis testing ............................................................................................................... 85 4.5.1 Hypothesis 1: The more investment in improving facilities, the higher effect of financial management.................................................................................................................................. 85 4.5.2 Hypothesis 2: To increase the percentage spent on teachers and satisfaction of teachers, it will increase the effect of financial management: .................................................................... 86 4.5.3 Hypothesis 3: Reduce administrative costs will increase the effect of financial management:................................................................................................................................. 87 2 4.5.4 Hypothesis 4: The more investment in innovation program (method, examination, tests and assessment), the higher effect of financial management ........................................................ 88 CHAPTER V SUMMARY, FINDINGS, CONCLUSIONS AND RECOMMENDATIONS .............. 90 5.1. Summary ............................................................................................................................. 90 5.2. Conclusion........................................................................................................................... 92 5.3. Recommendation................................................................................................................. 95 REFERENCES..................................................................................................................................... 101 APPENDIX .......................................................................................................................................... 104 APPENDIX 1. REQUEST LETTER TO CONDUCT THE SURVEY (TO RESPONDENTS)......... 104 APPENDIX 2. QUESTIONNAIRE ..................................................................................................... 105 APPENDIX 3. Cronbach alpha of factors of financial management.................................................... 109 APPENDIX 4. CURRICULUM VITAE.............................................................................................. 112 3 LIST OF TABLES Content............................................................................................................... page Table 1.1. Resources allocation in ULSA 2012........................................................ 11 Table 3.1. Five point Likert’s Scale ......................................................................... 64 Table 4.1: Gender of the respondents....................................................................... 66 Table 4.2: Age of the respondents............................................................................ 66 Table 4.3: Education level of the respondents .......................................................... 67 Table 4.4: Monthly everage income of the respondents............................................ 68 Table 4.6. Frequency and Percentage Distribution of the Respondents in Financial Management in terms of Labor Resources Allocation as to Salary ........................... 70 Table 4.7 The average value of from 1.1 to 1.4 questions......................................... 71 Table 4.8. Frequency and Percentage Distribution of the Respondents in Financial Management in terms of Labor Resources Allocation as to professional development and teaching quality................................................................................................. 72 Table 4.9. Frequency and Percentage Distribution of the Respondents in Financial Management in terms of Labor Resources Allocation as to development career....... 73 Table 4.10. Frequency and Percentage Distribution of the Respondents in Financial Management in terms of Resources Allocation in equipment and infrastructure....... 74 Table 4.11. The average value of from 4.1 to 4.3 questions...................................... 75 Table 4.12. Frequency and Percentage Distribution of the Respondents in Financial Management in terms of Resources Allocation in program ...................................... 76 Table 4.13. The average value of from 5.1 to 5.4 questions...................................... 76 Table 4.14. Frequency and Percentage Distribution of the Respondents in Financial Management in terms of Resources Allocation in services provision ....................... 77 Table 4.15. The average value of from 6.1 to 6.3 questions...................................... 78 Table 4.16. Frequency and Percentage Distribution of the Respondents in Financial Management in terms of Resources Allocation ........................................................ 79 Table 4.17. The average value of from 7.1 to 7.6 questions...................................... 80 Table 4.18. Cronbach alpha coefficient.................................................................... 82 Table 4.19. F-test and Significance test.................................................................... 83 Table 4.20. The regression models........................................................................... 84 Table 4.21. gamma’s value and level of significance of hypothesis 1 ....................... 86 Table 4.22. gamma’s value and level of significance of hypothesis 2 ....................... 86 Table 4.23. gamma’s value and level of significance of hypothesis 3 ....................... 87 Table 4.24. gamma’s value and level of significance of hypothesis 4 ....................... 88 Table 1.1. Resources allocation in ULSA 2012........................................................ 96 Table 5.1. The optimal rate of items in resource allocation....................................... 97 4 LIST OF FIGURES Content............................................................................................................... page Figure 1.1. Limitation of study ................................................................................ 19 Figure 2.1. Model Balanced Scorecard..................................................................... 45 Figure 2.2 Diagram of the Balanced Scorecard ........................................................ 58 Figure 2.3. Research paradigm................................................................................. 61 Figure 4.1: percent of position of sample. ................................................................ 69 5 ACKNOWLEDGMENT I would like to express my sincere gratitude to Dr. Joanna Paula Ellaga who has instructed her dedicatedly to complete this Dissertation. I also would like to thank the lecturers of the University of Southern Luzon, Thai Nguyen University, faculty and staff of University of Labour and Social Affairs for helping me during the survey of Financial management: basis for resources allocation. Thanks for my family and all my beloved friends who have shared, encouraged and supported me so much during my DBA program to made my study feasible. The Author Do Thi Thanh Hoa 6 COMMITMENT The authors declare that this is my own research. The information is used in the dissertation is credible. The evaluation criteria of financial management: the basis for allocating resources have not been available in Vietnam in general and Hanoi in particular. The evaluation criteria of financial management: the basis for allocating resources have not been available in Vietnam in general and Hanoi in particular. The problem of resources allocation in the financial university has been mentioned. However, no specific studies at the University of Socialist Labor and other universities in Vietnam. This study may provide the basis for financial management to allocate resources effectively, in accordance with the actual situation of ULSA, and the reference to the financial management of the other schools and policy makers regarding the allocation of resources for education. The author strongly believes that the thesis is the first study in Vietnam to build resource allocation model suitablely for University Labor – Social Affairs, and therefore it is also the first study to introduce the method of applying the standards of resources allocation of the university. Therefore, the findings and conclusions of the dissertation has not been published in any other work yet. The Author Do Thi Thanh Hoa 7 ABSTRACT Starting from current reality in Vietnam, the mechanism of financial of education, including tuition fees are not renovated, a system of wage scales also take the average, so is not to encourage the dynamism and creativity of teachers and education managers; cost norms for training between branches, jobs is still averaged and not practical; mechanisms for allocating budget for institutions is also unreasonable. Attracting investment from social resources for of higher education (including public schools) are limited (the Resolution No. 05- NQ/BCSð January 06, 2010) University of labour and social affairs (ULSA) is also in this general situation. Now, tuition fees of ULSA are in regulated frame, infrastructure is poor, the system of wage doesn’t encourage the employee, state budget invested in ULSA is limited, financial management is not good, resource allocation is not reasonable. The objective of this dissertation is to analyze the current status of financial management including resource allocation of University Labor - Social, in order to offer solutions to better allocate resources for it. From the survey of managerial staff and lecturers of University of Labor – Social Affairs, dissertation assessed the impact of financial management, including the allocation of resources to the factor labor, equipment and facilities, program and course providers. The dissertation used methodology of the questionnaire survey, descriptive statistical analysis, regression to give proposal for the resources allocation of the university. From the analysis of actual allocation of resources in the University of Labor and Social Affairs, the dissertation determine the respondent’s profile (gender, age, the highest education level, montly average income, the number of years of services 8 in the university, position), profile of the respondents is in accordance with the actual situation of ULSA. Secondly, the author assess the effect of resources allocation to the factors: labor, equipment and infrastructure, course program and providing services. Determining the impact of these factors is to adjust the allocation of resources for effectiveness Finally, the researcher proposes a basis for an efficient financial resources allocation for the university through regression model. These model showed that the priority of investment to get high efficency. 9 CHAPTER I INTRODUCTION 1.1. Background of the study Education in our Vietnam ver the next decade in the context of developing world is more rapid and complex changes. Globalization and international integration in education has become an inevitable trend. Scientific and technological revolution, information technology and communications, intellectual economy growing strongly, direct impact on the development of education in the world… Fast-growing demand for education to meet the demands of industrialization and modernization of the country, economic development in depth knowledge with advanced technologies and international integration, while the resources to education is limited, will create pressure on educational development. (The decision No 711/Qð-TTg June 13, 2012) The core problem of a university education (higher education) can be summed up in three words: quality, efficiency and social justice. And with ULSA is two words: quality and finance. How to manage finance to get high quality and financial management here is allocating the resources. The decision No 711/Qð-TTg June 13, 2012 also confirm necessary educational solutions development phase 2011-2020 is: Increasing resources for investment and innovating education financing mechanism. To continue renewing education financing mechanisms to mobilize, allocate and use more effectively the resources of public and social investment in education and enhancing the autonomy of the institution, make transparency and responsibility to the State, the learner and society to ensure financial resources for a number of Vietnamese educational institutions are capable of integrating and international competition. Current status of resources allocation in ULSA: 10 Table 1.1. Resources allocation in ULSA 2012 No Content 1 2 Salary for faculty professional development and teaching quality 3 Amount (VND) Rate 28,150,143,000 42.6% 5,096,875,000 7.7% Career development 1,377,176,000 2.1% 4 equipment and infrastructure 6,587,828,000 10.0% 5 Course program 8,002,749,000 12.1% 6 service provision Total 16,869,174,000 25.5% 66,083,945,000 100% Source: Accounting Department of ULSA, 2012 Currently, the quality of the teachers is inadequate, the salary of each teacher is not high, and method of payment of salary for each teacher on fix rank and seniority to lose the its leverage. In 2012, the average income of a teacher is 6.721.000VND/month (= 320 USD / month), this salary does not encourage teachers, Thus, teachers are not interested to prepare good lecture, add and update knowledge. Moreover, the construction of the system of fixed wage scale, the time of wage increasing is 3 years, this salary payment does not reflect the true quality of teachers. Training program is now not really completed, ULSA invested about 12% for program but basic teaching methods are still in the old lines, mostly by traditional methods. The traditional method mean that learning is mainly based on lectures so acquiring knowledge processes are passive, unilateral, does not expand the vision. When problems of practices are improper such as theory, most students fall into an embarrassing situation and dare not to process. Students are not interested in program. Therefore, the school should innovate program and method to meet current needs. 11 The amount of investing equipment and facility of ULSA is small. The procurement of equipment and facilities were not timely and did not meet the requirements. In fact, equipments and infrastructure for practice, experiments are inconsistent and outdated. Providing services of ULSA now account for a relatively large proportion of 25.5%, but the service is not really efficient. Administrative procedures are cumbersome, providing information to students and parents is slow and inaccurate, service attitude is not good. ULSA need to allocate resources suitable to get high quality. Thus, analyzing the financial management: basis for efficient resources allocation is very necessary. 1.2. Statement of objectives In recent years, many principals have errors in financial management, leading to serious disunity, even corruption cases occur, adversely affecting the reputation of the school as well as the professional subject.(Thanh Binh, 2012) Danger of falling behind can make the gap of economics, knowledge and education between Vietnam and other countries increased. International integration and market development raises new problems, such as risk of cultural intrusion and unhealthy lifestyles to erode national identity, poor quality of education services may cause greater the risks to education posed requires innovation in both theory and practical solutions relevant to the development of education. (The decision No 711/Qð-TTg June 13, 2012) Training quality, effectiveness of VN higher education are low, don’t meet the increasing requirements for human resources. Maybe that's getting is uniformly high in the nearly 1,000 delegates attended the conference "Innovation VN higher education: Opportunities and Challenges" by the Ministry of Education and Training 12 held in Hanoi . Such remarks are mentioned in almost every speech, ideas, sketches of a situation not so optimistic of higher education in Vietnam .(Thanh Hà, 2004). The decision No 711/Qð-TTg June 13, 2012 about approval education development strategy 2011 – 2020 of Prime Minister points out the inadequacies and weaknesses: The quality of education is low compared with the requirements of the country's development in the new period and compared with the level of countries with advanced education in the region, around the world. Don’t solve the relationship between the development of number and requirement of improving the quality ; professional capacity of students graduated did not meet the requirements of the job; have expressed deviant behavior and lifestyle in a division students. Management education is subsidized, embraced, and overlapping incident and scattered, responsibilities and powers of professional managers is not parallel with responsibility, authority for personnel management and finance. The legal system and education policy is inconsistent, is amended and supplemented slowly. The coordination between education and other ministries, branches and localities has not been close. Policy to mobilize and allocate human resources to finance education is not reasonable; efficient use of resources is not high. State investment in education is not highly concentrated for the priority objectives; the expenditures for professional activities is low. Autonomy and social responsibility of educational institutions is not stipulated fully and truly. This study focuses on financial management of ULSA, so that we can allocate suitably resources because ULSA today are still subsidized so it is not interested much in financial efficiency. The research uses knowledge mainly on the criteria to assess the effects of capital investment and quality standards in education. The specific objectives of this dissertation are: 13 1. To determine the profile of the respondents in terms of the following 1.1. gender 1.2. age 1.3. highest educational attainment 1.4. monthly average income 1.5. position 2. To assess the effect of financial management in resources allocation in the following areas: 2.1. labor 2.1.1. salary 2.1.2. professional development and teaching quality 2.1.3. career development 2.2. equipment and infrastructure 2.3. course program 2.4. service provision 3. To propose a basis for resources allocation for ULSA From the reality of management systems in public universities in general and the university of Labor and Social Affairs in particular, the allocation of resources is important in the financial management of the university. Appropriate resources allocation will help financial managers to achieve better efficiency and improve the quality of training, to be the basis for implementing of strategic objectives most effectively, to avoid waste and inefficient in the use of resources. So this dissertation is necessary to contribute to strengthen financial management: the basis for efficient resources allocation. 14 1.3. Hypotheses A few assumptions can be made from the scientific reports and from practice as follows: - Hypothesis 1: The more investment in improving facilities, the higher effect of financial management. - Hypothesis 2: To increase the percentage spent on teachers and satisfaction of teachers, it will increase the effect of financial management: - Hypothesis 3: Reduce administrative costs will increase the effect of financial management: - Hypothesis 4: The more investment in innovation program (method, examination, tests and assessment), the higher effect of finacial management 1.4. Significance of the study Before the general reality is lack of resources to develop the education and training of university, ULSA also need to have the financial resources to meet the expenditure needs to ensure the survival and development. However, the mobilization of resources ULSA is not a urgent issue due to it is financed by the state budget ULSA, tuition revenue sources is collected by state regulation. So the question here is how to exploit and utilize financial resources efficient at the University of Labor – Social, this is now emerged problems, financial management mechanisms are inappropriate, even more wasteful and embarrassing, not proactive and highly creative yet. The university has not really considered to the efficiency of the exploitation and the usage of financial resources. It is also a major cause of reduced quality of training. Currently, ULSA is lack of facilities and equipment, only temporary teaching facilities meet minimum learning needs. Specially, equipment for laboratory and 15 practices are lack of synchronization and backward. So the motto “the study go together with practice” is not basically done. The quality of the teaching staff is week. Teaching and learning methods are mostly traditional methods, which students are mainly based on learning following lecture and lesson, acquiring knowledge processes are passive so students do not expand the vision. Salary for teachers are low, wage payment method on rank and seniority has lost its leverage. Base salary is considered for a raise every 3 years do not reflect the true quality of teachers. Teachers still have to do extra working so as to reduce time to prepare lecture and update additional knowledge, so lectures quality is not improved to directly affect the quality of training. Training program for the university was recently built, it should be gradually improved. Compared to other countries in the region and the world, the program is relatively backward, so it is needed to continue to research, add and upgrade urgently. So how and where to invest the resources of ULSA to get a high quality are current issues. Thus the study of the subject “analysis financial management of ULSA: basis for efficient resource allocation” is essential and important today. Before this needs and seeing the financial management of the University of Labor – Social Affairs, the dissertation “ analysis financial management: the basis for efficient resources allocation” is necessary. From that, the financial manager of ULSA could use better resources, provide higher education quality. The dissertation will present the method of distribution of financial resources that is consistent with the situation of ULSA, to help its financial manager to plan for allocating resources for specific items. 16 The beneficiaries of this dissertation research is firstly managers of ULSA, especially financial managers; managerial staff; faculty of ULSA; students of ULSA; the other public university and the budget allocation planner. For the managers, this dissertation will give them the way to use resources reasonably, they will know to prioritize resources for which items and what items should be adjusted to achieve high efficiency. Since then , the university will have a way of appropriate financial management and resources allocation to ensure the survival and sustainable development. The school will have a good future development and create increasing prestige. For the teachers, when the resources allocated reasonably, wages are paid according to the quantity and quality of labor, not the average salary. Thus, teachers will invest more in teaching quality hours so they are paid higher salary. In addition, they will be invested more in professional development because ULSA will invest adequate resources for this item. For the staffs, the rational allocation of resources will help them to be more motivative to work better because their labor will be estimated rightly, the university will not increase the salary 3 years 1 times that be paid by effective working. Therefore, they will invest to improve the quality and efficiency of work, so that the quality of service increased. They will focus on making the work more effective instead of doing unnecessary work. When rational allocation of resources, ULSA will increase prestige, the staff will have the opportunity to develop their work more professional and provide better service to receive higher wages. For students, the rational allocation of resources, they will be entitled to the investment needed to develop the quality of learning. Teachers will provide them with hours of teaching quality, suitable equipment investment and better quality of service 17 will create opportunity for students to learn and practice more. Therefore, students will feel more satisfied with the university and they are the best advertiser for the brand of the university. Their parents will be more satisfied and willing to contribute to a higher payment in order to received the better training quality of the university. Then the other public universities can learn ULSA model of resources allocation. In addition, the Budget allocation planner for education also can refer to have more reasonable basis for budget allocations for public higher education. In the future, before the training needs of the society increasing, financial management solution of ULSA will effectively improve the quality of training, investment efficiency and raise the responsibilities of the education and training facilities to meet the demand of high quality human resources of the country, protect the legitimate interests of learners and require continual innovation knowledge to serve society. So the research on financial management of ULSA is very meaningful in this context. This will be the basic for allocating resources. This study is expected to help improve the financial management of ULSA effectively. 1.5. Scope and limitation of the study But the main difficulty affecting research results is the quality criteria are not specific, relative and difficult to assess objectively. However, in this study reseacher selected criteria: quality of education measured by the worth of money. This concept balance quality with and value, in particular as value for money, "quality product with economic price" .... Although often referred to quality as value for money, it is be evaluated through a number of criteria such as standards, specific level or reliability. The core concept of quality measured by the worth for money is the concept of responsibility. The public service is expected to be responsible for the investment and the "customer" (Department of Testing and quality control of education, 2008) 18 The critical variable in the study are: + Evaluate the criteria in the use of finance: capital investment in innovation teaching method, examination, tests and assessment, the percentage spent on teachers and administrative costs. + Indicators to assess the effects of using labors: income statement, the average salary per teacher and per administrative staff. + The evaluative criteria in the use of efficient equipment and facilities: learning area per one student, dormitory area per one student, the amount of money for equipment of teaching and learning per one student + Indicators of quality education: the satisfaction of teacher and student construction and equipment for physical training and sport of student… Limitations of the study is to assess financial management of ULSA, the basic for resources allocation. Other elements of financial management are also assessed as important as the security of capital and debt, revenue and profitability of financial investment in education, but for the ULSA - a public university, the safety of capital is relatively stable, almost no debt, revenue and profit are not their interest because the money is mainly provided by state budget. They only care how to use and allocate money effectively. This is illustrated by the following diagram: Figure 1.1. Limitation of study financial management: resources allocation Investment in program Investment in serving Investment in labour Investment in educational equipment and infrastructure 19 1.6. Definition of terms To perform this study, the authors used a number of concepts, definitions as a basis for the study. These concepts, definitions are throughout the dissertation, as a basis for the understanding and applications of research findings into practice. - The Higher Education Law 2012 defines financial management of higher education institutions to ensure the quality of higher education, including four conditions: labor (faculty, administrators, staff), equipment and infrastructure (Study room, office, library, information technology systems, laboratories, practice facilities), course program (training programs, curriculum, teaching materials and learning) and service provision. - Finance is the economic categories, reflecting the distribution relations of wealth in the form of social value. Incurred in the process of forming, creating, allocating monetary funds of entities in the economy in order to achieve the objectives of each subject in certain conditions. (http://vi.wikipedia.org/wiki/Tài_chính) - Resource allocation is used to assign the available resources in an economic way. It is part of resource management. In project management, resource allocation is the scheduling of activities and the resources required by those activities while taking into consideration both the resource availability and the project time. (http://en.wikipedia.org/wiki/Resource_allocation) Thus, to get high quality education, the researcher study financial management in terms of resources allocation under four aspects: Labour (teachers and staff), course program, facilities and infrastructure, services provision. 20
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