Effects of Strategic Issue Diagnosis Process (SIDP) on Profitability of Private Universities in Kenya: Case of the Catholic University of Eastern Africa (CUEA)

Abstract

The study analyzed the effects of strategic issue diagnosis process (SIDP) on the profitability of the Catholic University of Eastern Africa (CUEA). The study used a census survey design of the fifty members of the top management team (TMT) of the University. The survey data was analyzed using factor analysis and regression analysis. Factor analysis using principal components and varimax (orthogonal) rotation (to maximize variable loadings to each factor) was conducted to reduce the dimensionality and identify the factors (latent variables) and labels (constructs) of both the SIDP and profitability of CUEA. The regression analysis results showed that the joint effect of the six factors of the SIDP accounted for about 30 per cent of the total variance of the profitability of CUEA, implying that about 70 per cent of the variance could be attributed to excluded university specific, higher education industry and external factors. However, the joint effect of the factors of the SIDP on the institution’s profitability was statistically significant (p<0.05). Although all the factors of the SIDP had theoretically expected signs, not all had statistically significant individual (partial) effects on the profitability of CUEA. The results show that all but the null hypotheses on communication systems and personality profile of the members of the TMT were rejected at p<0.05. The study recommended conduct of additional studies with a larger sample of universities, inclusion of the excluded variables and use of structural modeling approaches.