IMPACT OF THE ENVIRONMENT OF GERRANTOWN ON THE PPP

Gerrantown is a small developing country in the Caribbean. The country gained independence from Britain in 1962 and has had a history of political stability over its post-independent years. Gerrantown is “...known for its strong sense of self-identity” (BBC, 2011) but is still plagued by widespread poverty and crime (ibid.). The country has a GNI of US $4,990 (World Bank, 2009, cited in BBC, 2011). Because of “…its limited productive capacity, the island nation is heavily dependent on imported goods and on foreign debt relief to sustain its struggling economy” (Encyclopedia of the Nations, (2011). International migration is high in Gerrantown but this has also increased the level of remittances received making it one of the greatest contributors to the national GDP (Adams, 2003). In the year 2000, the country had the highest migration rate of all developing countries and this was predominantly at the tertiary education level (Adams, 2003, p.29). This phenomenon is demonstrative of the economic and developmental vulnerability of small island states (Briguglio, 2003; Briguglio, 1995).

6.1.2 Economic, Geographic and Social Vulnerabilities

Economic and social vulnerabilities resulted from the on-going crisis in the economy, dependency on foreign resources and the geographic location of the country within the hurricane belt that often caused infrastructure damage with attendant economic costs. The country experienced a perpetual scarcity of financial resources in the overall economy and this impacted the PPP. The affordability of business education for students as individuals, and the limited financing available from the private sector, presented challenges for the business school. Market size was limited due to the impact of migration on the overall size of the population. The economic context contributed to social issues such as crime and poverty, including the associated ills of health challenges.

There were several vulnerabilities that appeared to emanate from the socio-economic, historical and geographic context of the country. Despite the contextual challenges, the environment was essentially viewed by both actor sub-groups as providing opportunities for the business school “…to generate (and) to advance solutions towards

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the building of resilience to those vulnerabilities” (#1 Pub/Priv KOA, Gerran). Public

actors’ concerns emanated from the ability of students to afford fees whereas the public-private sub-group was concerned with affordability from the perspective of what it meant for the activities of the business school.

“If you think about an economic side, we are so tremendously dependent on resources that are not Gerrantown backed …it affects us so very, very badly.” (#1 Pub/Priv KOA, Gerran)

The absence of a comment from private actors suggested that they did not consider the environment as having significant impact on the success of the business school.

6.1.3 Competitive Environment of Business Education

The geographic proximity of the country to the metropolis, the open economy, and the largely unregulated education market facilitated the entry of providers that were more robust and in a better resource position. Despite this, it appeared that Gerran was able to find its space within the market and establish its brand. This may have been externally influenced by the strong cultural self-identity amongst citizens of Gerran and internally by its organisational presentation to the market as a privately managed institute of Green University backed by renowned people on its board of directors. The concern for the survival of the business school in its highly competitive environment was shared by respondents in all sub-groups. This factor appeared to be positioned as a constraint more than an opportunity for the business school, although the business opportunity was overtly acknowledged by university actors. One actor noted:

“…there was a business opportunity because this business school has been established as a private company” (#3 Pub/Director, Gerran).

Business was seen as an opportunity to earn profits and this drove the competition to provide business education. In one case, the familiarity of university actors with the region was viewed as an ‘inimitable’ resource that could favourably position the business school amongst its competitors (Barney, 1988; Peteraf, 1993, p.188; Barney, 1991). Evidence of this is presented in Table 10. All actor sub-groups lamented the extent of competition in Gerrantown.

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Table 10: Respondents’ Comments on the Competitive Environment

Public “Certainly competition is often strongest in the business training and education area… given the belief that business education is the key to a BMW or SUV, based on your preference” (#2

Pub Director, Gerran).

Private “…recognising the increased competition, I don’t know if you know what is happening in Gerrantown where all the…everybody is here now and the day when Gerran was the only business school offering an MBA (is) far-gone!” (#1 Priv KOA, Gerran).

6.1.4 Small World Effect

In the small country of Gerrantown, social distance was greatly reduced and this may have perpetuated the “small world effect” (Newman, 2000, p.1; Kochen, 1989) that may have influenced the cognitive social structure and behaviours of actors. The short social distance between people in the society was demonstrated in the structure of the Board of Directors and it was suggested that they “…all seem to be sort of cut off from

the same cloth!” (#2 Pub Director, Gerran). In the wider environmental context of the

country, the prominence of directors, as leaders of government and large businesses appeared to positively influence the acceptance and legitimacy of the PPP, thereby aiding in building the brand within the society. The small world effect appeared to be a feature of the society and, as such, a reality of the working environment of business school graduates. The implications of the small world for governance, curriculum responsiveness and the profile of the business school graduate were articulated by respondents as follows:

“You have to understand too, you know, that it is a very small society! People come to the table knowing people, understanding their position, respecting their contribution and...they also (take) on board with the governance architecture…they also have other objectives to fulfil.” (#4 Pub Director, Gerran)

“[The reality of] working in the Caribbean is the fact that very quickly you get to the top. …You know you were supposed to be a. the guru on the one hand and b. who the hell do you think you are on the other hand.” (#1 Pub/Priv Director, Gerran)

The comments of respondents with respect to the small word effect appeared to reside on a continuum of implications from positive and supportive to negative and deterministic. The challenge to business education in the region was underscored by the respondent who ventured that the business school must produce graduates who are able

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to take immediate control of business enterprises. Overall, the existence of the small world effect held implications for the relationships in the PPP and is considered in the explanations developed.

6.1.5 Risk-Averse Business and Regional Isolation

Gerrantown is a member of CARICOM. Respondents commented on the lack of integration of the society within the Caribbean region and the resulting sense of isolation from the rest of the region. The separation from the region appeared to emanate from socio-economic and historical factors in the development of the region in general, with some attribution to the actions of the leadership of Gerrantown. There also appeared to be perceptions of opportunistic behaviours by the business sector in some countries more capable of regional expansion.

“Lack of regional integration and ability to benefit from regional instruments is also …because of our own failing …to address the weaknesses in the Gerrantown economy.” (#3 Priv Director, Gerran)

The impact of isolation and the overall social, economic and cultural factors in the society prevented collaborative efforts between businesses in Gerrantown and the private sector across the region. One respondent noted the lack of competitiveness and innovation across the Caribbean and this may have been partly attributed to lack of regional co-operation. More importantly, the loss of opportunity of regional integration weakened the private sector which engaged in risk-averse business. This increased the distance between sectors, including between academia and business. Respondents noted:

“the sense that one gets is that they’re (private businesses) not adventurous… Basically, most people just lend money to Gerrantown government and got big returns.” (#1 Pub Director, Gerran)

Respondents indicated that despite the offering of the university, business was perceived as lacking innovation and maintained the status quo across the region.

6.1.6 Summary: Influence of the Country Context on the Partnership

Private sector actors in particular, saw the environment as a source of opportunity, engendering personal commitment. One respondent commented:

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“Well it makes the school…it almost makes me paranoid and in my view paranoid is the best antidote to complacency. The rate at which things happen in Gerrantown forces the school to always be on the lookout for embracing change, recognizing the external dynamics. You are not forced into almost a false cocoon because of the environment you are in.” (#2 Priv Director, Gerran)

The directors saw the opportunity for the business school “… to be in the forefront in

providing support to public sector and private sector, to get out of particular situations, to guide them through particular situations” (#2 Priv Director, Gerran). It was noted

though that the most important consideration for the Board of Directors was “how” to influence the transformation.

Overall, the directors were in agreement with the analysis of the vulnerabilities and challenges of the context and this therefore provided a common point of departure with respect to the business school agenda. Respondents appeared to link the country’s development concerns and agenda to the purpose and responsibility of the business school. The smallness of size and the resulting reduced social distance appeared to create a sense of personal and collective responsibility for all categories of actors, suggesting a network culture that is influenced by the culture and contextual variables (Fuhse, 2009). This appeared to positively influence the relationship between actors in the governance structure and it appeared that the cultural embeddedness of actors at Gerran Business School in the context of Gerrantown provided the business school with opportunities for building trust and acting in concert (Dequech, 2003; Zukin and DiMaggio, 1990). The extent to which actors in the PPP considered environmental factors as critical to strategy will be considered in a later sub-section of the case report. The second major consideration in the analysis of the external environment in this study is the context of the University in which the PPP was embedded.

6.2 THE CONTEXT OF GREEN UNIVERSITY, GERRANTOWN CAMPUS