Archive for October 3, 2009

Kazakhstan’s Acid Test on “Competition” of Universities

At the beginning of this past week, I had Kazakhstan’s Peace Corps Country Director and his wife (both have MBAs) come and talk about their U.S. business venture to my class of over 20 MA students.  In actual fact, I know my dear Kazakh students would much rather listen and interact with outside speakers than discuss their final paper and project required by me.  But the day of reckoning (rough draft deadline) is fast approaching.  

 The following are answers to the question that came up about “competition” during the Peace Corps director’s talk.  One vocal student expressed concern about the strategy our guest speaker and his partners used as being unethical when these typical Americans had tried to maintain profits after bringing their newly acquired business out of bankruptcy.  An outside, bigger competitor had tried to get into the same business in their region.  

This interaction with the speaker and my Kazakh students revealed just how prevalent Soviet trained teachers, who long preached against capitalism as the evils of all societies, still have contemporary students trapped into thinking that competition is a bad thing in business. When in truth, competition is ultimately good for the customer because it helps to reign prices in.  I think our university needs to work on the finer points (no BASIC points) of economics with their masters students especially.  I’ve never taken an economics course myself but I am married to an economist.  Being a liberal arts grad, I can appreciate that education and economics go hand in hand.  When a country is doing well, their educational systems improve.  When a country has no money for basic survival, their education languishes.  Let that not be so for Kazakhstan!!!

First, I’ll set up the context of how we got into this discussion and then how this might impact our western style university in Kazakhstan.  However, I don’t see anything coming close to what our university offers outside of Central Asia.  The following are answers from my masters students when queried about what the Peace Corps Country Director talked about with competition and his business.

How did John and his partners compete when a competitor came into their territory to sell the same product?  Was this a good thing they did, how would you do it differently?

S.Z. – They cut down their price, advertised more, tried to put their stations near those of competitor.  I studied economics and this is a classic way of getting the competitor out of business.  I would do it the same.

R.S. – It was a good strategy, I would also recommend to give some free services for customers, like free oil check.

L.S. – Personally I think that it is good, because this is the world of business and only the strongest companies survive.

K.L. – They reduced their prices on products (service).  That is not good from ethics way of mind but efficient.  I would offer some special offers like if you buy two, the third is free.

A.I. – I would do the same thing or would offer wide assortment and better services.

D.D. – I think its right because it’s a business, you must fight to your interests

Would it be good if another comparable institute like our university competed against it?

R.S. – Competition would be good because then there were a competition between institutions and the prices for education went lower, so more people could be educated in qualified places.

D.N. – Yes, there will be choice to which institution go.  Moreover, the competition between the institutions will start.  So, they come to cut the prices, and doing other things for attention of students.

A.A. – In my opinion, it would be VERY good. Our university has no competitors, that’s why it annually arises its costs.  But if there are more qualified institutions, people will have a choice and our education system will rise up.

A.B. – The tuition fee will be decreased.  Yes it will be a good, but there is risk that the quality could also decrease because our university will not afford to employ highly evaluated expensive professors.

A.V. – It will be good or excellent, because only in competitive situation firm or institution will increase quality of education, trying to get more students.

A.T.– Maybe, but I think it won’t be exactly the same, because our university has more experience and history.

A.D. – Of course yes, because people will have choice and for university students and other comparable institute student will be a big competition, and the level of education of population will be higher (more higher)

L.S. – I think that it would be good for the following reasons: 1) fees will be decreased 2) quality of education will increase.  I hope that soon there will be a good competitor to our university

K.L. – It will be good because of the competition between the universities for students

A.I.– competition is the base of good quality

D.D. – Decreasing tuition fees to make students stay in at our university, provide more scholarships, discounts for students

A.B. – That would be perfect, because when you have a really strong competitor, your effectiveness can be rised twice, it will help to rise the quality of education in our university also it will keep prices stable.

A.A. – We have to look from two sides 1) ordinary people; 2) administration for our university.  If will be more universities, there is good for people, they will have a choice where is better and cheaper.  We know competition is always good.  But for administration is not good because they will be mean competition.

A.B. – I think that our university has reputation as one of the western modeled institute with quality faculty and if new institution would be opened that shouldn’t be a problem for our university as it offers high quality education.

S.Z. – Yes, it would be, because in order to compete with the new institution, our university would have to decrease tuition fees, and hopefully to increase the quality of services.

A.T. – Yes, it’s be good because 1) competition which make the price cut and quality of education will be good 2) choice of universities and more programmes will be available to students.

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