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Financial stability and sustainability in online education: a study of promising practice

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Financial stability and sustainability in online education: a study of promising practice

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Content Running head: FINANCIAL STABILITY IN ONLINE EDUCATION

FINANCIAL STABILITY AND SUSTAINABILITY IN ONLINE EDUCATION:
A STUDY OF PROMISING PRACTICE

Kyle Waterstone

A Dissertation Proposal Presented to the
FACULTY OF THE USC ROSSIER SCHOOL OF EDUCATION
UNIVERSITY OF SOUTHERN CALIFORNIA
In Partial Fulfillment of the
Requirements for the Degree
Doctor of Education

August, 2016

Copyright 2016 Kyle Waterstone
FINANCIAL STABILITY IN ONLINE EDUCATION 2
ABSTRACT
The economic potential of distance education and academic globalization has piqued the
interest of the higher education community (Rovai & Downey, 2010). The result has been
an influx of online programs (Pittinsky, 2003). One of the biggest myths about online
programs is that they are less expensive and easier to financially manage (Darrow, 2010).
This study investigated the promising financial practices of administrators at seven
institutions that are offering high quality online programs and exhibiting financial
stability and sustainability. These promising practices included: valuing the mission of
the institution and its goals for the online program, successfully communicating program
goals, utilizing private sector resources effectively, and allocating personnel
appropriately. The findings of this study highlighted five specific assets and organized
them using Clark and Estes’ (2008) gap analysis model in terms of the Knowledge,
Motivation, or Organizational dimension to which they aligned. The overarching goal
for this study was to identify what administrators need to know, what skills they need to
possess, what motivates them to engage in these practices, and what organizational
factors contribute to the overall success of those practices. By identifying the assets that
contribute to a financially stable and sustainable online program and proposing
recommendations for achieving those assets, this study benefits other institutions
wishing to design a financially viable online program of their own.

FINANCIAL STABILITY IN ONLINE EDUCATION 3
TABLE OF CONTENTS

Abstract……………………………………………………………………………. 2

Chapter One: Introduction…………………………………………………. ……... 8

Organization Context and Mission………………………………………… 10

Organizational Performance Status………………………………… ……... 10

Related Literature…………………………………………………………...12

Importance of this Study……………………………………………………15

Organizational Performance Goal and Current Performance……………… 16

Organizational Stakeholders……………………………………………….. 16

Stakeholder for the Study…………………………………………………...18

Purpose of the Project and Study Questions……………………………….. 18

Definitions…………………………………………………………………..19

Chapter Two: Review of the Literature……………………………………………. 21

Introduction…………………………………………………………………21

Standards of Best Practice for Financial Stability and Sustainability
in Online Education………………………………………………………... 21
Learning and Motivation Theory…………………………………………... 23

Knowledge and Skills……………………………………………… 24

Motivation…………………………………………………………..25

Organization………………………………………………………... 28

Factors that Contribute to Financial Sustainability in Online Education….. 29

Knowledge and Skills……………………………………………….29

Motivation…………………………………………………………..31

FINANCIAL STABILITY IN ONLINE EDUCATION 4
Organization………………………………………………………... 33

Factors that Inhibit the Financial Sustainability in Online Education……... 37

Knowledge and Skills……………………………………………… 37

Motivation…………………………………………………………..39

Organization………………………………………………………... 40

Most Salient Factors Specific to Administrators and Program Directors….. 41

Conclusion…………………………………………………………………. 42

Chapter Three: Methodology………………………………………………………. 46

Purpose of the Project and Questions……………………………………… 46

Framework for the Study…………………………………………... 46

Presumed Performance Assets……………………………………... 48

Guiding Background Information………………………………….. 48

Knowledge and skills………………………………………. 49

Motivation………………………………………………….. 49

Organization………………………………………………...50

Learning and Motivation Theory…………………………………... 50

Knowledge and skills………………………………………. 51

Motivation………………………………………………….. 51

Organization………………………………………………... 52

Summary…………………………………………………………… 53

Validation of the Performance Assets………………………………………54

Validation of the Performance Assets: Knowledge………………... 54

Validation of factual knowledge assets……………………..54

FINANCIAL STABILITY IN ONLINE EDUCATION 5
Validation of conceptual knowledge assets………………... 55

Validation of procedural knowledge assets…………………55

Validation of metacognitive knowledge assets…………….. 56

Validation of the Performance Assets: Motivation………………… 57

Validation of the Performance Assets: Organization……………… 59

Participating Stakeholders…………………………………………………. 61

Data Collection…………………………………………………………….. 62

Survey……………………………………………………………… 62

Interviews…………………………………………………………...63

Trustworthiness of the Data………………………………………………... 64

Role of the Investigator……………………………………………………..64

Data Analysis………………………………………………………………. 65

Limitations and Delimitations………………………………………………66

Limitations…………………………………………………………. 66

Delimitations……………………………………………………….. 68

Chapter Four: Results and Findings………………………………………………... 70

Participating Institutions…………………………………………………… 71

Participating Stakeholders…………………………………………………. 72

Results and Findings for Knowledge Causes……………………………….73

Survey Results………………………………………………………74

Findings from Interviews…………………………………………... 76

Synthesis of Results and Findings for Knowledge Causes………… 80

Results and Findings for Motivation Causes………………………………. 81

FINANCIAL STABILITY IN ONLINE EDUCATION 6
Survey Results……………………………………………………... 82

Findings from Interviews…………………………………………... 84

Synthesis of Results and Findings for Motivation Causes………… 87

Results and Findings for Organization Causes…………………………….. 88

Survey Results…………………………………………………....... 89

Findings from Interviews………………………………………....... 91

Synthesis of Results and Findings for Organization Causes………. 94

Summary…………………………………………………………………… 95

Chapter Five: Recommendations, Implementation, and Evaluation………………. 97

Selection of Validated Assets and Rationale………………………………. 97

Recommendations for Motivation Assets………………………………….. 102

Goal Setting………………………………………………………... 102

Attainment Value…………………………………………………... 104

Recommendations for Organization Assets………………………………... 105

Leadership………………………………………………………….. 105

Recommendations for Knowledge Assets…………………………………. 106

Conceptual Knowledge…………………………………………….. 107

Procedural Knowledge……………………………………………... 108

Implementation Plan……………………………………………………….. 109

Recommendation Integration………………………………………. 109

Evaluation Plan…………………………………………………………….. 112

Level 1: Reaction…………………………………………………... 112

Level 2: Learning…………………………………………………... 113

FINANCIAL STABILITY IN ONLINE EDUCATION 7
Level 3: Transfer…………………………………………………… 113

Level 4: Impact…………………………………………………….. 114

Limitations…………………………………………………………………. 114

Future Research……………………………………………………………. 116

Conclusion…………………………………………………………………. 117

References………………………………………………………………………….. 121

FINANCIAL STABILITY IN ONLINE EDUCATION 8
CHAPTER ONE: INTRODUCTION
Introduction of the Problem of Practice
Adequate funding, appropriate resource allocation, and strategic financial
planning are central to the success of any higher education academic program (Lerner,
1999). Many U.S. accrediting organizations require institutions to display and sustain
financial stability (Eaton, 2010). Often times, accredited status is conveyed only if
institutions and programs can provide evidence of this financial stability (Eaton, 2010).
In higher education, financial stability is the ability of an institution to adequately fund
institutional infrastructures (e.g., departmental units), allocate resources, accumulate
wealth, and manage risk (Schinasi, 2004). Similarly, financial sustainability is the
ability of an institution to manage their financial, social and environmental risks,
obligations and opportunities over a period of time (Schinasi, 2004). These
characteristics all contribute to the overall financial health of an institution and
specifically as it relates to successful online education programming (Dew, 2012; Gibb et
al, 2013; Volery & Lord, 2000). Given these definitions, this study looks to better
understand the knowledge and skills of online program directors that are needed for
financially stable and sustainable programs, what motivates them to engage in those
behaviors, and what organizational factors contribute to those processes.
The concept of being financially stable and sustainable has taken on greater
importance as the federal government continues to emphasize the importance of
exhibiting fiscal and administrative capacity as appropriate to the specified scale of
operations at the particular institution (Delisle et al, 2014; Eaton, 2010). These same
fiscal principles apply to online education (Rovai & Downey, 2010). The economic

FINANCIAL STABILITY IN ONLINE EDUCATION 9
potential of distance education and academic globalization has piqued interests of
numerous higher education institutions and constituents (Rovai & Downey, 2010). The
result has been an influx of online and virtual educational offerings (Pittinsky, 2003).
However, the online programs that are unable to successfully adapt to this competitive
and burgeoning environment are at risk of not attracting enough students to meet revenue
demands and subsequently fail (Rovai & Downey, 2010).
Darrow (2010) asserted that one of the biggest myths about online programs is
that they are less expensive and easier to financially manage compared to campus-based
programs. In reevaluating that myth, Darrow (2010) identified various costs that must be
factored into the development, implementation and maintenance of a strategically
planned online program for it to become financially stable and sustainable. Specifically,
the cost to initially fund staffing and support services is a significant burden for online
programs (Weber, 1996). If the program develops as planned, the costs to maintain
technological infrastructures, upgrade software, and staff appropriately also pose
financial challenges (Groulx & Hernly, 2010). Thus, fiscal stability is at the crux of
online program management.
This study on promising financial practices examines several institutions that are
successfully offering high-quality online degree programs and exhibiting financial
stability and sustainability. These institutions were each presented with their own unique
set of circumstances that warranted the pursuit of online education, analyzed the available
data, and made the decision to engage in online education as a platform for institutional
success and long-term financial health. This study seeks to identify the skills and
strategies used by an administrator or program director and to understand these skills and

FINANCIAL STABILITY IN ONLINE EDUCATION 10
strategies in terms of the knowledge, motivation and organizational factors that facilitate
or impede financial stability and sustainability.
Organization Context and Mission
The context of this project includes seven institutions that all offer high quality
online graduate degree programs. All of these schools share a goal of providing their
online students with an academic experience online equivalent to that experienced by
students attaining the degree in a traditional, on-ground format. To accomplish this goal,
each school utilizes a common cloud-based software-as-a-service (SaaS) provider that
partners with selective institutions and utilizes synchronous video-conferencing
technology to enable an interactive and face-to-face online learning environment.
The common SaaS provides the partner institutions with the learning management
system (LMS) and infrastructure needed to attract, enroll, educate, and support a global
audience of prospective graduate students. By merging face-to-face learning experiences
with synchronous online learning tools, the SaaS and partner institutions collaborate to
ensure that every student has the opportunity to attain the highest educational outcome.
However, in order for the SaaS and the partner institution to successfully collaborate,
administrators at each site must work closely with the SaaS to identify a fiscal strategy
that will provide the highest likelihood of achieving financial health.
Organizational Performance Status
Several of this study’s partner programs self-identify as highly selective
institutions and belong to The Association of American Universities (AAU), an
association of 62 leading public and private research universities who are committed to
high quality programs of academic research and scholarship (“AAU Membership,”

FINANCIAL STABILITY IN ONLINE EDUCATION 11
2014). More specific to this study, several programs rank at the top of U.S. News &
World Report’s list of best online programs (“Best Colleges U.S. News Education,”
2014). Students enrolled in these online programs tend to be current working
professionals committed to enhancing their professional profile through continued
education (About 2U, 2015).
The study’s partner programs utilize a common SaaS provider that enables them
to provide a blended learning approach in order for students to receive a similar academic
experience as those students attaining the degree in a traditional, on-ground format. The
online education industry is creating numerous opportunities for higher education
institutions to creatively grow and the partnership with this common SaaS provider
represents one of the leading the ways in that pursuit (About 2U, 2015).
Partnering and outsourcing for the purposes of innovation is not a novel ideal. In
fact, this is common practice in other industries, particularly business (Borins,
2001). The involvement of for-profit industries breeds a culture of competition that some
argue is not germane to the education industry (Borins, 2001). Tellis (2012) posits that
competitive culture subsequently creates a subculture of innovation; and that innovative
culture is needed in education (Christensen, Horn, Caldera, & Soares, 2011). As a result,
the impetus is to identify the most salient innovations and allocate the appropriate level of
resources in order to implement them. The institutions in this study identified an
opportunity for improvement and chose to partner with a for-profit business to achieve
the desired outcome. The process by which that decision was made and the structures in
place to support the partnership are what this study seeks to understand.

FINANCIAL STABILITY IN ONLINE EDUCATION 12
Related Literature
Higher education’s transition to providing increased online educational offerings
has been a national trend since the turn of the century (Dew, 2012). The rise of the
internet, increasing emphasis on globalization, and a struggling national economy have
prompted universities to seek new opportunities for expanding their educational reach
and increasing enrollment (Pittinsky, 2003; Goldberg & Seldin, 2000). The most recent
economic recession saw a shift in behavior as people did not automatically return to
institutions for advanced education in the wake of economic hardship as done previously
(Carnevale, Cheah & Strohl, 2012). This shift in focus created a market for online
education where the consumer is not limited by physical space or geography and
consequently has more access to graduate level education. In 2008, at least 25% of all
postsecondary students took at least one course online (Christensen et al, 2011).
Institutions are taking note of this pattern and have begun to strategize how online
education can be leveraged to address financial deficits, enrollment woes, and gaps in
student achievement (Eisenhauer, 2013).
One such strategy that institutions are utilizing to manage economic challenges is
through private sector partnerships. These partnerships employ private funds, in addition
to institutional funds, to reach a larger audience in a more efficient manner than the
traditional classroom model (Moloney & Oakley, 2010). By partnering or outsourcing
services to private sector organizations, higher education institutions have the flexibility
to operate outside the traditional structure of the academy (Parker, 2012). More
specifically, private sector partnerships can create alternative funding sources or
expansion opportunities that might not be feasible within the traditional confines of the

FINANCIAL STABILITY IN ONLINE EDUCATION 13
institution (Baines & Chiarelott, 2010). Examples of these creative strategies include
seed funding, payment plans, use of existing infrastructures, and/or research and
development funding (Gibb, Haskins, & Robertson, 2013).
However, there are also many institutions that are less enthusiastic about private
sector or third-party partnerships (Baines & Chiarelott, 2010; Bosenberg, 2014;
Carpentier, 2012; Morey, 2004; Ubell, 2010). These types of financial relationships
merge two different financial and ideological models, one that is motivated by profit and
another that is not. A relationship of this kind poses a variety of concerns related to
academic independence, corporate power and influence, and institutional values
(Carpentier, 2012). By partnering with for-profit businesses, higher education may be
swayed to now prioritize revenue above more altruistic goals like educating students
regardless of cost (Baines & Chiarelott, 2010). In this same manner, Carpentier (2012)
even questions the future of the liberal arts if these types of partnerships continue.
The literature surrounding higher education’s incorporation of online education
into its mission is polarizing. First, there is a need for institutions to become and remain
financially viable (Cullen, Joyce, Hassall, & Broadbent, 2003). Second, the costs
associated with providing an education are increasing and there is some consternation
about why that is the case (Dew, 2012). Third, institutions are trying to identify
innovative strategies for addressing these challenges. One such strategy is through
private sector partnerships that offer a way to attract and enroll more students (Moloney
& Oakley, 2010; Morey, 2004). Finally, there is growing concern from faculties who
question whether the increased entrepreneurship of the academy may cloud its judgment,
bias its mission, and/or subvert efforts to educate students (Bosenberg, 2014).

FINANCIAL STABILITY IN ONLINE EDUCATION 14
Higher education is facing new challenges in the internet age in terms of
educational quality and the cost of delivering that quality (Christensen et al, 2011).
Ultimately, the cost of providing higher education is increasing and pressure is mounting
from various stakeholders at the local and federal level to hold institutions accountable
for justifying the increased costs (Delisle, Phillips, & Van der Linde, 2014). Institutions
are identifying new ways to educate more people while maintaining efficiency and
affordability. Online education is one of those strategies. However, online programs are
not immune to the financial pressures facing higher education (Darrow, 2010). Similar to
its on-ground counterparts, online education must also utilize adequate funding,
appropriate resource allocation, and strategic financial planning in order to deliver high-
quality programming (Darrow, 2010).
A key component for any institution, online or on-ground, is identifying the
appropriate financial model that will provide sufficient resource stability to support
positive student outcomes (Gibb et al, 2013). Financial stability greatly influences hiring
practices, teaching course loads, research opportunities, compensation, and health
benefits (Appana, 2008). Therefore, without proper financial strategies in place,
institutions and each of their departments risk a decline in enrollment, revenue,
reputation, personnel, and/or external support (Brown & Hoxby, 2014). Knowing that
this is a complex, multifaceted issue with a variety of key stakeholders, this study is
specifically concerned with identifying and understanding the financial strategies being
used to ensure fiscal stability and sustainability in online education, specifically within
online graduate programs.

FINANCIAL STABILITY IN ONLINE EDUCATION 15
Importance of this Study
The literature identifies financial stability as a significant factor in predicting
program success (Brown & Hoxby, 2014). Similarly, fiscal stability is paramount as
institutions pursue online education as a way to diversify their educational delivery
methods, reach a larger audience of students, and utilize scale to financially leverage
institutional programming (Rovai & Downey, 2010). As online education continues to
occupy a larger market share, it is important for administrators to better understand the
relationship between resources, both human and nonhuman, and student outcomes. The
administrative challenge in understanding this relationship has only been exacerbated by
the recent economic recession, decreased government funding, and dwindling
institutional endowments (Mortenson, 2012; Brown & Hoxby, 2014).
Based on information from the National Income and Product Accounts (NIPA),
state appropriations for higher education are rapidly declining (Mortenson, 2012).
Funding in 2011 was 40.2% less than in 1980 and the financial trends since then indicate
that state fiscal support for higher education will reach zero by 2059 (Mortenson, 2012).
In addition to decreased state funding, institutional endowments have only now begun to
recover from the recent recession (Brown & Hoxby, 2014). Given these statistics, the
challenge for administrators is to understand the influence of financial stability of online
degree programs as they seek to increase learning outcomes and creatively identify
alternative revenue sources (Gibb et al, 2013).
The consequences for administrators and program directors that do not possess
the necessary financial knowledge and skills are significant. The risk of failure for online
educational programs is high (Rovai & Downey, 2010). For a program to succeed long

FINANCIAL STABILITY IN ONLINE EDUCATION 16
term, an institution must have a clear financial plan that will cover all operating costs and
work within the existing administrative structure. Developing this strategy can be a
challenge for any administrator managing a traditional, on-ground program let alone an
online program where uncertainties, risks, and misinformation abound (Rovai &
Downey, 2010). For these reasons, this study will look at promising practices in order to
provide guidance to others.
Organizational Performance Goal and Current Performance
According to the gap analysis method of assessing performance status within an
organization, one must establish a goal that each organization is attempting to achieve in
order to assess effectiveness (Clark and Estes, 2008). For the purposes of this study, the
performance goal being evaluated is financial stability and sustainability as measured by
revenues against expenditures, program growth, and years of operation. In order to
successfully achieve this goal, institutions will need to: a) strategically increase
enrollment, b) balance the program budget, c) manage staffing and personnel, and d)
forecast future developments in the industry (Cullen et al, 2003).
Organizational Stakeholders
Financial stability and sustainability of online degree programs influences three
groups: a) institutional leadership (e.g., President, Board of Trustees), b) faculty, and c)
administrators and program directors. First, transitioning degree attainment online is a
shift for the traditional higher education institution and its leadership because it
drastically alters both the mode of educational delivery and the structures that support
them (Dew, 2012). The role of online degree programs in higher education is increasing
(Dew, 2012; Brown & Hoxby, 2014; Pittinsky, 2003). And similar to their on-ground

FINANCIAL STABILITY IN ONLINE EDUCATION 17
counterparts, these programs must be financially viable in order to employ faculty and
staff, create and deliver content, and thus effectively educate students (Darrow, 2010;
Rovai & Downey, 2010). Online degree programs are central to the future of higher
education and it is the job of the institution’s leadership to determine if that future will be
affordable, sustainable, and efficient (Norton, 2013).
Second, the financial stability and sustainability of online degree programming
influences the faculty members at these institutions. Delivering educational content
through a synchronous software platform is not only a pedagogical shift for faculty
(Boling, Hough, Krinsky, Saleem, & Stevens, 2012; Garrison & Kanuka, 2004), it also
impacts hiring practices, teaching loads, and job security (Appana, 2008; Darrow, 2010).
Financial health is critical for establishing program stability. Without a sound financial
underpinning, institutions are faced with difficult decisions that affect the employment,
workload, and compensation of its faculty (Cullen et al, 2003). As such, faculty members
are inextricably connected to the financial stability and sustainability of online programs.
Finally, institutional administrators and program directors (e.g., Dean, Vice Dean,
Director of Financial Planning) are often responsible for understanding and managing the
financial stability and sustainability of online degree programs. These individuals are
charged with determining the critical factors that facilitate or inhibit program success
(Volery & Lord, 2000). As an example, in addition to the fixed and variable costs of on-
ground programs (e.g., faculty, physical space, contractual agreements), there are also
costs specific to online education (e.g., LMS, program training, technological
requirements, ongoing maintenance). In particular, up front development costs can be
quite burdensome in addition to the ongoing maintenance and support costs that are quite

FINANCIAL STABILITY IN ONLINE EDUCATION 18
often greater than expected (Darrow, 2010). While distance learning may appear very
cost effective in principle, there is significant risk and unpredictability associated with
initial investments prior to receiving any form of revenue from student tuition or fees
(Rovai & Downey, 2010). These are just some of the financial challenges that this
stakeholder group must navigate.
Stakeholder for the Study
For purposes of this study, the main stakeholder group will be the individuals at
each partner institution responsible for planning and organizing the funding and financial
strategy to support the online graduate program. Most often, these individuals are the
administrators at each institution with financial and program development oversight (e.g.,
Dean, Vice Dean, Director of Financial Planning). Therefore, this study seeks to identify
the knowledge and skills, motivation and organizational factors that, from the perspective
of administrators, facilitate financial stability and sustainability.
Purpose of the Project and Study Questions
The purpose of this study is to identify the knowledge, motivation and
organizational factors of administrators that facilitate financial stability and sustainability
for their online programs. This study must answer several pertinent questions that will
guide the focus of this study.
1. What knowledge, skills, motivational and organizational factors do
administrators perceive as facilitating or inhibiting financial stability and
sustainability for the online programs in these institutions?

FINANCIAL STABILITY IN ONLINE EDUCATION 19
2. For those factors perceived to be facilitating financial stability and
sustainability, what promising practices could be adapted to and utilized by
other units in the same agency?
3. How might those interventions, whether promising practices or
recommendations, be evaluated for effectiveness?
In sum, this study seeks to identify what administrators need to know, what skills
they need to possess, what motivates them to engage in these practices, and what
organizational factors contribute to the overall success of those practices. By identifying
the required characteristics of a promising online practice, this study may benefit other
institutions that wish to design a financially viable online program of their own.
Definitions
• Synchronous: It is an adjective describing objects or events that are coordinated in
time; often occurring in real time as a means of recreating face-to-face interaction.
• LMS: Learning Management System is a software application for the
administration, documentation, tracking, reporting and delivery of electronic
educational technology education courses or training programs.
• SaaS: Software-as-a-service is a software distribution model in which applications
are hosted by a vendor or service provider and made available to customers over
an online network.
• Cloud-Based: The ‘cloud’ is the ability to host a software platform or service
from a remote location that can be freely accessed and used anywhere via Internet
access. Instead of installing a suite of software programs on multiple computers,
only one application log in is required.

FINANCIAL STABILITY IN ONLINE EDUCATION 20
• Distance Education: Often referred to as distance learning. It is a mode of
delivering education and instruction to students who are not physically present in
a traditional setting such as a classroom.
• Financial Stability: The ability of an institution to adequately fund institutional
infrastructures (e.g., departmental units), allocate resources, accumulate wealth,
and manage risk and financial sustainability as the ability to manage their
financial, social and environmental risks, obligations and opportunities over a
period of time (Schinasi, 2004).

FINANCIAL STABILITY IN ONLINE EDUCATION 21
CHAPTER TWO: REVIEW OF THE LITERATURE
Introduction
In this chapter, the existing body of literature will be examined, a promising
practice will be defined, and what is needed for a promising practice to ensure the
financial stability of an online program will be identified. Additionally, a modified
version of Clark and Estes’ (2008) methodological framework known as a gap analysis
will be used to determine facilitating and inhibiting factors that contribute to the financial
stability and sustainability of online degree programs. This study of promising practices
will identify assets and facilitators as well as gaps and inhibitors to financial stability.
Standards of Best Practice for Financial Stability and Sustainability
in Online Education
This study is defining financial stability as the ability of an institution to
adequately fund institutional infrastructures (e.g., departmental units), allocate resources,
accumulate wealth, and manage risk and financial sustainability as the ability to manage
their financial, social and environmental risks, obligations and opportunities over a period
of time (Schinasi, 2004). These characteristics all contribute to the overall financial
health of an institution and are necessary for successful online education programming
(Dew, 2012; Gibb et al, 2013; Volery & Lord, 2000).
The influence of the internet and the subsequent rise of online educational
offerings have even piqued the interest of the federal government as it continues to take
interest in monitoring the financial health of higher education institutions (White House,
2013). In 2013, President Obama issued his College Affordability plan, which is a
strategic financial plan that expects greater learning accountability and cost effectiveness

FINANCIAL STABILITY IN ONLINE EDUCATION 22
in higher education in order for students to have greater access, lower debt, and increased
success (White House, 2013). The task of becoming financially stable and remaining
financially sustainable is a part of that process as institutions seek to provide high quality
education at an affordable price tag (White House, 2013). The pressure from the federal
government calls for institutions to be financially innovative as a means to decrease the
debt burden on students and increase the efficiency of the academy (White House, 2013).
Online education is an example of one such innovation.
U.S. accrediting organizations have their own financial standards for institutions.
These organizations ensure academic quality, identify areas for improvement, and
establish accountability in order to meet the standards of the accrediting body as well as
consistency with peer institutions (Eaton, 2010). One of those expectations is a
requirement of programs to have evidence of fiscal stability (Eaton, 2010). Programs
must exhibit fiscal and administrative capacity as appropriate to the specified scale of
operations at the institution (Eaton, 2010). Specifically, the Western Association of
Schools and Colleges (WASC) calls for programs to display dashboard indicators of
financial stability in order to receive initial accreditation status (WASC, 2013).
In addition to the accrediting organizations, several professional associations have
expectations and standards for online education. The National Association of College
and University Business Officers (NACUBO) emphasize the need for online degree
programs to budget, plan, and manage similar to traditional brick and mortar institutions
(Husson, 2012). Furthermore, the United States Distance Learning Association
recognizes that financial management is a key principle for continuous improvement and
program development (USDLA, 2011).

FINANCIAL STABILITY IN ONLINE EDUCATION 23
The financial challenges facing online education are both similar and different
from its on-ground counterparts. Both types of programs must cope with challenges in
resource allocation, wealth accumulation, and risk management (Holian & Ross, 2010;
Schinasi, 2004). However, specific to online education, institutions must also address the
significant risk and unpredictability associated with the industry (Rovai & Downey,
2010; Husson, 2012). The unique context of online programs poses challenges for
academic governance, organizational responsibility, and financial control (Husson, 2012).
These similarities and differences are important for administrators who are responsible
for the financial well-being of online education to understand as they begin to plan,
implement, and manage their programs.
Learning and Motivation Theory
In order to determine the primary factors and inhibitors that contribute to the
financial success of online graduate degree programs the gap analysis process as
described by Clark and Estes (2008) will be applied. Clark and Estes (2008) provide a
detailed description of the gap analysis process as a means of assessing an organization to
determine why the organization is not achieving its goals. Clark and Estes (2008)
provide a framework for analyzing the organization to determine whether knowledge,
motivation and/or the structure of the organization is the cause of the gap in desired
performance. They assert that improving the knowledge and motivation of constituents
as well as assessing the organizational context can improve performance (Clark & Estes,
2008). In order to effectively employ the gap analysis model, a performance goal is
needed as a means of establishing a desired outcome.

FINANCIAL STABILITY IN ONLINE EDUCATION 24
For the purposes of this study, financial stability and sustainability will be
determined based on the guidelines from the federal government and the WASC
standards for initial accreditation. The gap analysis will identify the knowledge
contributing to the financial success of online graduate degree programs through the lens
of Bloom’s Taxonomy as proposed by Krathwohl (2002). In order to uncover the
potential motivational issues impacting the performance, the study will use the
motivational framework by Rueda (2011). In addressing organizational barriers
impacting performance, the author will turn to Gallimore’s and Goldenberg’s (2001)
work regarding the impacts of culture on an organization.
Knowledge and Skills
Knowledge and skills are the first area of focus in Clark and Estes (2008) gap
analysis model. Clark and Estes (2008) suggest that in order to determine the knowledge
and skills of constituents, it is imperative to understand what is expected of them. To
make this determination, the framework developed by Krathwohl (2002) will serve as the
guide for the knowledge and skill analysis.
Krathwohl (2002) proposes three tiers of knowledge: declarative, procedural, and
metacognitive. Declarative knowledge is often divided into two components, factual and
conceptual knowledge (Krathwohl, 2002). Factual knowledge is the basic information
necessary to complete a specific task (Krathwohl, 2002). Conceptual knowledge is an
understanding of the theories and principles needed to achieve the task (Krathwohl,
2002). Procedural knowledge is an understanding of how to accomplish desired
outcomes and includes the order of operations that must be followed in order to achieve
those outcomes (Krathwohl, 2002). Finally metacognitive knowledge is the reflection on

FINANCIAL STABILITY IN ONLINE EDUCATION 25
one’s approach and the ability to make adjustments to achieve desired outcomes
(Krathwohl, 2002). A first step in identifying barriers and facilitators to financial
stability is to identify the knowledge required to facilitate financial stability and
sustainability in online degree programs.
Motivation
Motivation is the second component of Clark and Estes (2008) gap analysis
model. Motivation is the study of what causes people to engage in certain activities or
efforts (Mayer, 2011). Many researchers including Clark and Estes (2008), Rueda (2011)
and Mayer (2011) have studied motivation and the reasons people might participate in
certain activities or endeavors. Motivation is at the core of why people do certain tasks,
their willingness to continue doing the task, and the level of effort they commit towards
the task (Clark & Estes, 2008). Clark and Estes (2008) identify these three motivation
indices as: (a) choice, (b) persistence, and (c) mental effort.
First, active choice is an individual’s voluntary willingness to choose to engage in
a certain task (Clark & Estes, 2008). Active choice is the decision to actually do
something and not merely the intent. Examples of active choice can include, but are not
limited to, making a purchase, registering for a class, attending an educational session, or
initially using a product or resource. In this promising practice study, a next step is to
identify facilitators or barriers to choosing to engage in the activities that facilitate or
inhibit financial stability and sustainability of online degree programs.
The second index is persistence, which refers to an individual’s ability to remain
engaged in the execution of a certain task (Clark & Estes, 2008). Persistence is defined
as the commitment an individual is willing to invest when completing a certain task

FINANCIAL STABILITY IN ONLINE EDUCATION 26
(Clark & Estes, 2008). In order to determine the level of persistence, one might consider
how long and to what extent an individual is willing to persevere through a given task.
And lastly, mental effort is displayed when an individual applies new learning to a
difficult, novel, or challenging task (Clark & Estes, 2008). Individuals often display
mental effort when new information is presented. In other words, mental effort is how
much cognitive innovation the individual is willing to invest in the activity or task at
hand (Clark & Estes, 2008). As opposed to persistence, which is merely what is needed
to continue engaging in the task, mental effort is needed to complete the challenging task.
Motivation, comprised of choice, persistence and mental effort is influenced by
multiple variables: self-efficacy, values, attributions, interest, and goals (Clark & Estes,
2008). The first influence on motivation is the individual’s self-efficacy. Ambrose,
Bridges, DiPietro, Lovett, and Norman (2010) express that in order for individuals to be
motivated to engage in or complete a task, they must expect that they will be able to
succeed in completing the task. It is important to note that motivational indicators might
be occurring in an organization at any given time contributing to a lack of motivation
amongst constituents. Examples of motivational indicators in this study include the
mission and vision of the institution, directives from institutional leadership, federal
mandates, existing financial models, and compensation incentives.
The second influence on motivation is value. Value is the importance that
individuals assign to the task they are working on (Rueda, 2011). Value is often
understood in terms of intrinsic, extrinsic, attainment, and cost. Intrinsic refers to the
personal interest that an individual has in a given task. Extrinsic refers to the utility that
the task has for the individual. Attainment refers to the importance the individual

FINANCIAL STABILITY IN ONLINE EDUCATION 27
associates with the task and the cost is what benefit could come to the individual for
achieving it (Rueda, 2011). Without identifying one or more of these indicators, the
individual is less likely to be motivated to complete the task. This is particularly
important for this study as the author begins to identify why administrators at the partner
sites engage in fiscally responsible practices.
The third influence on motivation is attribution; which refers to how an individual
assigns failures or successes of a task to the level of effort used rather than one’s ability
(Rueda, 2011). Attribution is the process of assigning cause to a certain behavior or
event. An individual's attributions of achievement influence subsequent behaviors and
motivation (Rueda, 2011). This concept becomes important to understanding the
motivational influences for why administrators engage in fiscally responsible practices
because a primary assumption of attribution theory is that people will interpret their
environment in such a way as to maintain a positive self-image (Weiner, 1985). As such,
if people believe they are responsible for failures or undesired outcomes, they will be less
motivated to engage in the task or repeat their behaviors (Weiner, 1985).
The fourth influence on motivation is the individual’s level of interest in the task
at hand. In this context, interest is also aligned with choice. An individual’s level of
interest towards a certain task influences motivation to engage in that certain task.
The final influence on motivation is goals and goal setting. Rueda (2011) stresses
the importance of goals and goal setting in motivation as having clear, relevant and
challenging goals that encourage mastery and continued engagement. Goals, then, are
the standard of best practice for which one should strive. For purposes of this promising
practice study, the goals for financial stability and sustainability should align with the

FINANCIAL STABILITY IN ONLINE EDUCATION 28
standards of best practice identified by accrediting agencies, professional associations,
and administrator and institutional experience.
Organization
A third type of facilitator or barrier originates from the culture of the organization.
Culture, often identified by cultural settings and models (Rueda, 2011), is better
understood by examining the contextual dynamics of a situation. Every organization,
called a cultural setting, and profession, called a cultural model, has a unique culture.
This underlying culture and its associated belief patterns and social systems influence
many aspects of an organization and how it conducts business (Ambrose et al, 2010).
When analyzing an organization, it is important to consider the cultural models
and cultural settings that influence the specific organization to determine both the visible
and invisible structures in place (Rueda, 2011). According to Rueda (2011), cultural
models are shared beliefs and understandings that are evident in the practices of the
organization’s constituents while cultural settings are the social contexts in which those
beliefs are enacted. Cultural models are the values, beliefs and attitudes of an
organization that are generally invisible to insiders and are often automated (Gallimore
and Goldenberg, 2001). Some examples of cultural models include lack of trust, culture
of competition, or negative attitudes. Cultural models contribute to the structure and
policies of an organization (Gallimore and Goldenberg, 2001).
Cultural settings on the other hand are manifestation of the cultural models in the
organization’s daily life (Gallimore and Goldenberg, 2001). Examples of cultural
settings might include effective role models or benchmarks, communication strategies,

FINANCIAL STABILITY IN ONLINE EDUCATION 29
available resources, policies, procedures, and/or organizational directives. All of these
factors can be an organizational facilitator or barrier depending on context.
Factors that Contribute to the Financial Sustainability in Online Education
Knowledge and Skills
Given the increased demand for online educational offerings (Dew, 2012; Morey,
2004) and the increased pressure to provide high quality education at an affordable price
tag (White House, 2013), leaders of higher education institutions need to maintain an
appropriate level of knowledge and skills as they relate to financial management,
particularly in the online realm. The literature outlines three main points of emphasis that
are critical for administrators and program directors to display in order to produce
financially stable and sustainable online programs: a) knowledge and understanding of
financial principles (Lenington, 1996), b) ability to forecast financial expenditures against
revenues (Barr & McClellan, 2010), and c) communication skills necessary to build
institutional capacity (Argenti, Howell, & Beck, 2005; Goodman, 2006).
First, managing any academic program or department requires a basic
understanding of finance (Lerner, 1999). Appropriate levels of funding, resource
allocation, and planning are central to the success of any academic program (Lerner,
1999). Achieving these appropriate funding benchmarks is only exacerbated in an
industry like online education where there are numerous uncertainties, risks, and
misinformation about what and how operations work (Rovai & Downey, 2010).
Therefore, the literature highlights the importance of understanding the influence of
financial principles.

FINANCIAL STABILITY IN ONLINE EDUCATION 30
Lenington (1996) looks at program management in higher education and notes the
significance of financial management. Whether it is in private business or higher
education, a firm understanding of financial principles like risk management, cash flows,
debt ratios, and competitive markets is needed (Keller, 1983; Lenington, 1996).
Lenington (1996) often sees a gap in financial knowledge for administrators in the public
or community sector. Keller (1983) attributes this lack of knowledge and understanding
to the culture of the public and community sector where competition and innovation is
not always encouraged or promoted. Innovative financial strategies are common practice
in other industries, particularly business. However, historically, both K-12 and
postsecondary education has been slow to adopt these practices (Mead & Rotherham,
2008). Higher education institutions do not necessarily face competitive pressures that
lead to and demand more effective and efficient ways to educate students (Mead &
Rotherham, 2008). As a result, these organizations often recruit leaders who reciprocate
the altruistic values of the institution but may not have the business acumen of
counterparts in the private sector (Keller, 1983; Lenington, 1996).
A key component of understanding those financial principles is the ability to
forecast financial expenditures against potential revenues when managing an online
program. This is the second skill that administrators and program directors need when
managing an online program. Balancing a budget is a necessary managerial task in
private business as well as academia (Barr & McClellan, 2010; Lenington, 1996).
Institutions are accountable for how money is spent and must manage those expenses in
appropriate relation to the revenue received, often in terms of enrollment (Barr &
McClellan, 2010). Given the unpredictable nature of launching an online degree

FINANCIAL STABILITY IN ONLINE EDUCATION 31
program, administrators and program directors need the knowledge and skills to read,
understand, and interpret financial information in order to predict the future financial
viability of the program (Rovai & Downey, 2010). Rovai and Downey (2010) note
online education poses significant challenges to this predictive process. Thus, being able
to accurately navigate these analytics is a critical step in program management.
The third skill set that contributes to financial stability and sustainability is having
the necessary communication skills to build institutional capacity and support
surrounding online programs (Argenti, Howell, & Beck, 2005; Goodman, 2006).
Argenti, Howell, and Beck (2005) identify excellent communication skills as the most
salient characteristic for Chief Financial Officers (CFO) when managing programs.
These skills are critical when communicating multifaceted issues and complex data
points to individuals that are not always familiar with that jargon (Argenti, Howell, &
Beck, 2005). Because there is risk and uncertainty involved with online education, being
able to convey a message that connects to the institutional vision and the educational
tenets of the faculty and staff is invaluable (Goodman, 2006). Financial stability is built
from a solid understanding of financial principles and economic indicators (Barr &
McClellan, 2010; Lenington, 1996). However, financial sustainability requires the
collective effort of the institution for a prolonged period of time (Argenti, Howell, &
Beck, 2005; Goodman, 2006).
Motivation
Higher education is at a critical juncture in its history and its future has come into
question (Dew, 2012). One of the charges from the federal government is to provide the
highest quality education at the lowest possible cost to students and taxpayers (White

FINANCIAL STABILITY IN ONLINE EDUCATION 32
House, 2013). Additionally, there continues to be increasing competition in the
postsecondary educational market (Hiltz & Turoff, 2005). The influence of for-profit
institutions and global access to information has resulted in a market where the consumer,
or student, is the focus. Therefore, institutions are faced with questions about altering the
services or finding alternative sources of revenue (Hiltz & Turoff, 2005). This
competitive market pressure is an underlying motivational factor that is possibly
contributing to the financial strategies dedicated to online education.
The literature identifies two motivational forces specific to administrators and
program directors that contribute to the financial stability and sustainability of online
programs: a) the need to increase enrollment (Caudill, 2009; McCafferty, 2014; Rovai &
Downey, 2010) and b) the need to remain competitive (Allen & Seaman, 2010;
Marginson & Van der Wende, 2007; Volery & Lord, 2000). Both of these motivational
forces are related to the mental effort required to comprehend the new and complex
managerial challenges posed by online degree programs.
Much of the revenue derived from degree programs comes from tuition (Berger &
Kostal, 2002; Johnstone, 2004). Thus, enrollment is at the crux of establishing the
necessary cash flow to balance the expenditures for staffing, operations, capital
improvements, etc. This is especially important for online programs as they are often
seen as value-added assets for institutional finances (Caudill, 2009; Darrow, 2010; Rovai
& Downey, 2010). The challenge in online programs is that much of the expenditures are
taking place before a single tuition check is ever received (Caudill, 2009; Darrow, 2010).
To justify the initial expenditures necessitated by launching an online degree program,

FINANCIAL STABILITY IN ONLINE EDUCATION 33
administrators and program directors need to attract and enroll as many students as
possible (Caudill, 2009; McCafferty, 2014).
The second motivational force specific to administrators and program directors
that contributes to the financial stability and sustainability of online programs is the need
and desire to remain competitive within the institution and beyond (Allen & Seaman,
2010; Volery & Lord, 2000). Many institutions are engaging in online degree programs
as a way to increase enrollment, but also as a way to differentiate themselves from peer
institutions for various purposes including national and regional rankings, prestige, and/or
market segmentation (Volery & Lord, 2000). Administrators and program directors are
therefore motivated to learn the necessary financial principles and communicate the
potential impact of online programs as a means to build support for launching and
maintaining online degree programs (Volery & Lord, 2000).
Organization
Rueda (2011) identifies the importance of both cultural models and cultural
settings when analyzing an organization and how it functions. Cultural models are shared
beliefs and understandings that are evident in the practices of the organization’s
constituents while cultural settings are the social contexts in which the cultural models
are enacted (Rueda, 2011). In that sense, cultural models are the invisible values, beliefs
and attitudes of an organization that are often automated whereas cultural settings are the
manifestation of the cultural models in everyday life (Gallimore and Goldenberg, 2001).
There are two main cultural models that contribute to financially stable and
sustainable practices: a) a culture of competition (Marginson & Van der Wende, 2007;
Volery & Lord, 2000), b) and a mission of continuous improvement (Detert, Schroeder,

FINANCIAL STABILITY IN ONLINE EDUCATION 34
& Mauriel, 2000; Venkatraman, 2007). These underlying cultures are invisible to those
within the organization but are evident in how the organization conducts itself each day.
First, a culture of competition and comparative rankings is pervasive in higher
education (Marginson & Van der Wende, 2007). Much of the concern surrounding
program management is related to regional or national rankings and the influence that
these comparisons have on enrollment (Berger & Kostal, 2002; Marginson & Van der
Wende, 2007). This competitive nature is even felt within the institution and the
potential fear of online programming supplanting its on-ground counterpart, also known
as cannibalization (Kretovics, 2011; Rahman, 2001). This invisible culture also
influences decision making, particularly as it relates to program improvement and the
associated costs to deliver high quality education; both of which influence financial
stability and sustainability (Altbach, Gumport, & Berdahl, 2011).
Second, online education in and of itself is a manifestation of continuous
improvement (Detert et al, 2000; Venkatraman, 2007). A pillar of many higher education
institutions’ mission and vision is to continuously strive for improvement and innovation
in order to best serve students (Detert et al, 2000). This strategy is an example of a
management principle known as total quality management (TQM) (Venkatraman, 2007).
Specific to innovation in online education, the flexible and organic nature of
online programs compared to the traditional, brick-and-mortar counterpart allows for
institutions to react more rapidly to the changing demands of the consumer (Rovai &
Downey, 2010). Having a program partially or fully online allows the institution some
level of latitude when making strategic financial and organizational decisions (Volery &
Lord, 2000). As an example, by moving a program online, an institution can market to a

FINANCIAL STABILITY IN ONLINE EDUCATION 35
specific population not readily accessible (e.g., military, second-career, international
students). Additionally, working in a virtual space shifts focus away from physical
limitations (e.g., available space, capital costs, faculty location) and onto the actual
desired learning outcomes (Volery & Lord, 2000).
Similarly, there are three main cultural settings that contribute to financially stable
and sustainable practices: a) proper resource allocation through private sector
partnerships (Baines & Chiarelott, 2010; Bok, 2009; Carpentier, 2012; Morey, 2004; Peel
et al, 2002), b) effective communication strategies (Argenti, Howell, & Beck, 2005;
Goodman, 2006), and c) an efficient organizational structure (Allen & Seaman, 2010;
Cullen et al, 2003; Husson, 2012; Lenington, 1996; Shelton & Saltsman, 2005). All three
of these cultural settings are manifested in the daily life of the organization through
various operational tasks, policies, procedures, and work flows (Keller, 1983).
First, like any effective program, there must be an appropriate allocation of
resources to support programs, services, and staffing (Johnstone, 2004; Lerner, 1999).
One such way that these resources are being dedicated to online programs is through
private sector partnerships (Bok, 2009; Carpentier, 2012; Peel et al, 2002). By partnering
with private sector organizations, institutions are, in essence, outsourcing certain
components of their educational offerings (Baines & Chiarelott, 2010; Carpentier, 2012;
Peel et al, 2002). Although these types of partnerships have come under scrutiny in many
parts of the academy (Boesenberg, 2014), there is some value to merging the inherent
organizational structure and audience of higher education with the entrepreneurial
innovation and competitiveness of the private sector (Mead & Rotherham, 2008).

FINANCIAL STABILITY IN ONLINE EDUCATION 36
Private sector partnerships represent one aspect of the innovation being demanded
by various stakeholders. Organizationally, these types of partnerships are outside the
scope of the traditional institution and thus allow for funding options that are not often
feasible in on-ground counterparts (Mandernach, Radda, Greenberger, & Forrest, 2015).
These private sector organizations often bring seed funding, alternative revenue sources,
and creative financing options that contribute to the overall financial stability of the
institution (Peel et al, 2002). More and more institutions are looking to the private sector
for funding partnerships in all aspects of the institution’s life including research, program
design, job placements, and personnel (Mandernach et al, 2015).
The second cultural setting that contributes to financially stable and sustainable
practices is effective communication strategies (Argenti, Howell, & Beck, 2005;
Goodman, 2006). These communications encourage faculty support and agreement.
Volery and Lord (2000) posit that at the core of any online educational platform is the
content being delivered and the individuals delivering that content. The product, or
course content and delivery method, needs to be of a high quality. If the faculty is not
fully supportive of the online delivery method, the product will suffer (Rovai & Downey,
2010). At that point, it is a matter of supply and demand. Without a high quality
product, there will not be a demand from the consumer. And without the demand, the
need to continue supplying that product would potentially not justify the resources
necessary to do so. Therefore, delivering the adequate communication necessary to
create faculty support is a central aspect of financial stability and sustainability for online
degree programming (Shelton & Saltsman, 2005).

FINANCIAL STABILITY IN ONLINE EDUCATION 37
Lastly, the literature asserts that the organizational and structural context of an
institution is integral to proper financial management (Allen & Seaman, 2010; Cullen et
al, 2003; Husson, 2012; Lenington, 1996; Shelton & Saltsman, 2005; Volery & Lord,
2000). Allen and Seaman (2010) identify organizational context as a critical foundation
from which to build. More specifically, Shelton and Saltsman (2005) posit the location,
history, demographics, and culture of an institution as critical factors to the institutional
story and contribute to how finances are managed (Shelton & Saltsman, 2005).
Cullen, Hassall, and Broadbent (2003) emphasize the importance of an
institution’s organizational structure when determining fiscal health and aptitude. In this
way, structure refers to the organizational hierarchy and how financial stability is
managed for the betterment of the institution (Husson, 2012; Lenington, 1996). When
considering how an institution measures the economic value of programs and people, it is
logical that understanding the cultural settings will contribute to how finances are used.
Factors that Inhibit the Financial Sustainability in Online Education
Knowledge and Skills
There are numerous factors that contribute to the financial stability and
sustainability of an institution and specifically it’s online degree programming.
Conversely, there are equally as many factors that inhibit this type of progress. The
following section will look to identify and explain seven of these factors from the
literature, organize them by the appropriate learning theory category (e.g., knowledge,
motivation, organization) and begin to delve into why online programs fail, particularly
as it relates to financial stability and sustainability.

FINANCIAL STABILITY IN ONLINE EDUCATION 38
First, not only is a foundational knowledge of basic financial principles necessary
for program management, so, too, is the understanding of the required technology for
synchronous online education (Allen & Seaman, 2010; Appana, 2008). To effectively
administer an online program, institutional staff members, including program directors,
need to understand how to use the LMS (Roblyer, Davis, Mills, Marshall & Pape, 2008),
how to organize online course curriculums (Volery & Lord, 2000), and how the online
format works with and differs from the on-ground counterpart (Boling, Hough, Krinsky,
Saleem & Stevens, 2012). Without having the procedural and contextual knowledge of
how the online programs function, administrators will not be able to effectively
communicate with key stakeholders, hire appropriate personnel, and/or implement the
program successfully (Roblyer et al, 2008).
The second factor that inhibits the financial health of an online program and
contributes to program failure is a lack of understanding about the process for online
degree attainment (Rovai & Downey, 2010). Not only is it important for institutional
staff members to understand the necessary technology for synchronous online delivery
(Roblyer et al, 2008), it is equally important to understand how this system fits into the
larger goals of the institution and its students (Rovai & Downey, 2010). Goldenberg and
Seldin (2000) assert that the student-as-consumer model has dictated a more efficient
delivery of academic degrees thus easing the transition into the labor market. If
institutional staff members do not possess the appropriate levels of knowledge related to
how students are achieving degrees and why they certain enrollment decisions are made,
then the foundation for a successful online program is at risk (Rovai & Downey, 2010).

FINANCIAL STABILITY IN ONLINE EDUCATION 39
Motivation
Inhibiting these knowledge developments are three separate motivational factors.
The third factor that inhibits the financial stability and sustainability of an online program
is the fear of program failure. Institutional staff members understand the need for and
importance of online programming (Allen & Seaman, 2011; Appana, 2008), but due to a
lack of knowledge related to financial principles and/or online technology, there is an
underlying fear of failing (Bacow et al, 2012; Rovai & Downey, 2010). This fear is
inhibiting institutional staff members from choosing to address their lack of knowledge
and skills in these specific areas.
In addition to a fear that inhibits addressing certain knowledge and skill gaps
related to financial stability, the fourth factor that inhibits this success is the pressure and
difficulty of launching the online program. The student-as-consumer model has
increased pressure to offer degree attainment in a cost-effective manner (Goldberg &
Seldin, 2000). Specifically, institutions are being asked to educate a future labor force
while simultaneously providing a well-rounded education at a price point that takes into
consideration the financial prospects of its students as well as the opportunity cost
associated with attending a postsecondary institution (Heyman, 2010). As such, online
education is a tool for achieving the market competitiveness and long-term financial
stability necessary for institutional progress (Goldberg & Seldin, 2000).
The fifth factor inhibiting addressing knowledge and skill gaps related to financial
stability is the motivational challenge associated with faculty. Transitioning to a partial
or exclusive online delivery model is a change to the status quo from a labor perspective;
particularly for faculty members (Appana, 2008; Betts, Kramer & Gaines, 2013; Garrison

FINANCIAL STABILITY IN ONLINE EDUCATION 40
& Kanuka, 2004). Disrupting the current model is often received with resistance. In
many ways, change creates additional work, stress, and anxiety about the unknown
(Christensen et al, 2011). If these factors are present in faculty members, the motivation
to take on new tasks, engage in problem solving, and persevere through the challenges
will not be present. In the end, these motivational shortcomings inhibit the overall
success of online degree programs and create a challenge for administrators and program
directors as they make personnel decisions (Bacow et al, 2012).
Organization
Although the knowledge, skills, and motivation of institutional staff members
play a role in the financial success of an online degree program, there are two specific
cultural settings that establish the context for the previously identified factors.
Specifically, Volery and Lord (2000) assert that the cultural setting of an organization
should be understood first because it influences the knowledge, skills, and motivation, or
lack thereof, of constituents. As a result, the financial stability and sustainability of
online programs is prefaced by the underlying cultural and organizational settings.
The sixth factor that inhibits the financial stability and overall success of an
online degree program is a lack of initial funding for staffing and program
implementation (Darrow, 2010; Goldberg & Seldin, 2000). A primary concern for
institutions launching an online degree program is the initial funding needed to begin
operating (Darrow, 2010). This funding is used for curriculum development, technology,
capital costs, staffing, and more. More specifically, a significant concern is the initial
costs related to curriculum development and staffing prior to receiving any form of
revenue (Betts, Kramer & Gaines, 2013; Goldberg & Seldin, 2000). Without an

FINANCIAL STABILITY IN ONLINE EDUCATION 41
appropriate amount of seed funding, whether through private partnerships, charitable
gifts, or internal resource allocations, an online program risks the financial stability
necessary to succeed (Goldberg & Seldin, 2000). The literature emphasizes that this
funding is critical to establishing a culture where online education is both a financial and
teaching asset for the overall betterment of the institution (Goldberg & Seldin, 2000).
The final factor that inhibits the financial stability and sustainability of an online
degree program is a lack of clear and identifiable benchmarks for success (Frydenberg,
2002). Online degree programs are a relatively recent phenomena (Dew, 2012).
Therefore, the benchmark, or blueprint, for how to be financially sustainable is often
unclear. Institutions frequently do not have a standard from which to measure or a story
of success that could be copied or repeated (Frydenberg, 2002). For that reason, this
study seeks to identify the promising practices currently being used by the partner
institutions in order to establish a necessary criterion from which to work.
Most Salient Factors Specific to Administrators and Program Directors
Specific to the administrators, program directors, or other individuals who are
responsible for the financial well-being of online education at their respective institutions,
there are three critical performance factors that contribute to financial stability and
sustainability of an online degree programs that will be addressed in the remainder of this
study. First, the literature emphasizes the importance of an administrator’s prior
experience, knowledge, and understanding of higher education finance (Bok, 2009;
Caudill, 2009; Darrow, 2010). Caudill (2009) suggests that establishing a sound and
viable financial model is directly tied to the institutional administrator’s knowledge, skill,

FINANCIAL STABILITY IN ONLINE EDUCATION 42
and understanding of higher education finance. Therefore, a key component of this
study’s methodology will focus on addressing this type of knowledge in administrators.
In addition to knowledge of higher education finance, the second most salient
performance factor for administrators is a foundational knowledge, skill, and comfort
with the required technology (Bacow et al, 2012; Holstrom & Millacci, 2009; Lewis &
Baker, 2005). Although these individuals may not be coding or building the LMS, the
literature does assert the need to possess a certain understanding and an overall comfort
with the movement towards technology and away from traditional delivery methods (e.g.,
lecture) (Bacow et al, 2012; Holstrom & Millacci, 2009; Lewis & Baker, 2005). This
base level knowledge, skill, and comfort will help with transitioning responsibility as
well as with building cultural support and stakeholder buy-in (Bacow et al, 2012).
The final critical performance factor specific to administrators and program
directors that this study will seek to validate is the underlying organizational context that
most supports a financially viable online program. Volery and Lord (2000) identify
organizational factors as triggers for the knowledge, skills, and motivation necessary for
program success. In this regard, the financial stability and sustainability of online
programs is prefaced by the underlying cultural and organizational settings (Darrow,
2010). Therefore, a critical performance factor for administrators who seek to establish
financially stable and sustainable programs will be the institution’s financial model,
available resources, and staffing structure (Darrow, 2010; Goldberg & Seldin, 2000).
Conclusion
In this chapter, the literature surrounding financial stability and sustainability of
online education was examined. The literature was organized through the lens of

FINANCIAL STABILITY IN ONLINE EDUCATION 43
learning theory (e.g., knowledge, motivation, and organization) and applied using Clark
and Estes’ (2008) gap analysis framework. This analysis provided context for the assets
and facilitators as well as the gaps and inhibitors for establishing a promising practice.
Considerable attention was given to identifying the performance facilitators and
inhibitors for establishing a financially stable and sustainable online graduate program.
These factors were categorized in terms of their knowledge and skill, motivational or
organizational nexus. Moving forward, the goal is to know and understand the root
causes of performance facilitators and inhibitors so that recommendations can then be
developed and subsequently implemented.
These performance facilitators and inhibitors have been influenced by the rise of
online educational offerings (Dew, 2012; Norton, 2013). Moreover, the federal
government has inserted itself into this discussion through President Obama’s College
Affordability plan, which calls for increased innovation in online education in order to
decrease the financial burden on students and increase the efficiency and accountability
of the academy (White House, 2013). Many U.S. accrediting bodies now require
programs to have evidence of fiscal stability (Eaton, 2010) including WASC and
NACUBO. These financial standards are increasingly important in online education as
institutions address the significant risk and unpredictability associated with the market-
driven forces of the industry (Rovai & Downey, 2010; Husson, 2012).
This review of the literature synthesized seven performance facilitators and seven
performance inhibitors relative to ensuring financial stability and sustainability for online
programs. The facilitators, or contributing factors to produce financially stable and
sustainable online programs included: a) knowledge and understanding of financial

FINANCIAL STABILITY IN ONLINE EDUCATION 44
principles (Lenington, 1996), b) ability to forecast financial expenditures against
revenues (Barr & McClellan, 2010), c) communication skills necessary to build
institutional capacity (Argenti, Howell, & Beck, 2005; Goodman, 2006) d) enrollment
growth (Caudill, 2009; McCafferty, 2014; Rovai & Downey, 2010) e) market
competition (Allen & Seaman, 2010; Marginson & Van der Wende, 2007; Volery &
Lord, 2000) f) a culture of competition (Marginson & Van der Wende, 2007; Volery &
Lord, 2000), g) and a mission of continuous improvement (Detert, Schroeder, & Mauriel,
2000; Venkatraman, 2007).
The barriers, or inhibiting factors, included: a) lacking a foundational
understanding of the necessary technology (Allen & Seaman, 2010; Appana, 2008;
Roblyer et al, 2008), b) lacking knowledge about online degree attainment (Goldenberg
& Seldin, 2000; Rovai & Downey, 2010), c) a fear of failure (Bacow et al, 2012; Rovai,
2010), d) the pressure and difficulty of launching an online program (Goldenberg &
Seldin, 2000; Heyman, 2010) , e) the resulting lack of faculty buy-in (Appana, 2008;
Betts, Kramer & Gaines, 2013; Garrison & Kanuka, 2004; Shelton & Saltsman, 2005), f)
lack of initial funding (Darrow, 2010; Goldenberg & Seldin, 2000), and g) the absence of
any form of benchmarks for success (Frydenberg, 2002).
The remaining focus of this study is the on the administrators, program directors,
or other individuals who are responsible for the financial well-being of online education
at their respective institutions. After review of the literature, administrator’s knowledge
of higher education finance, comfort and skill with required technology, and
understandings of the underlying organizational context have been identified as the most
salient performance factors that facilitate or inhibit financial sustainability in online

FINANCIAL STABILITY IN ONLINE EDUCATION 45
education. Looking ahead to the next chapter, these specific factors will become the
focus of the testing process in hopes of validating the assumed causes for purposes of
providing other institutions with the benchmark guidelines necessary to create a
financially stable and sustainable promising practice in their own online programs.

FINANCIAL STABILITY IN ONLINE EDUCATION 46
CHAPTER THREE: METHODOLOGY
Purpose of the Project and Questions
The purpose of this study is to identify the knowledge, motivation and
organizational factors of administrators that facilitate financial stability and sustainability
for their online programs. This study must answer several pertinent questions that will
guide the focus of this study.
1. What knowledge, skills, motivational and organizational factors do administrators
perceive as facilitating or inhibiting financial stability and sustainability for the
online programs in these institutions?
2. For those factors perceived to be facilitating financial stability and sustainability,
what promising practices could be adapted to and utilized by other units in the
same agency?
3. How might those interventions, whether promising practices or recommendations,
be evaluated for effectiveness?
By identifying the required strategies and characteristics of a promising online
educational practice, this study may benefit other institutions that wish to design a
financially viable online program of their own.
Framework for the Study
The framework for this study is based on the gap analysis model as proposed by
Clark and Estes (2008). The gap analysis model assesses the performance of an
organization via the desired goals that the organization is attempting to achieve. Using
the ideal performance goal as the basis for the assessment, the gap analysis model
determines where the organization is failing to meet that ideal performance goal (Clark &

FINANCIAL STABILITY IN ONLINE EDUCATION 47
Estes, 2008). Once the gaps in desired performance have been identified, one can then
assess the knowledge, motivation, and organizational barriers that are negatively
impacting the success of the organization.
A detailed understanding of the causes and facilitators that are leading to the
performance gaps enables one to implement recommendations in hopes of striving closer
towards ideal performance. It is significant to note that the gap analysis process is
cyclical and requires constant assessment, evaluation, and enhancement of intervention
strategies in order to achieve the desired performance goal. Additionally, the framework
for this study utilized various data collection modalities including scanning interviews,
surveys, and follow-up telephone interviews.
For this study, the performance goal that was evaluated is the level of knowledge
and skills of online program directors that is needed for financially stable and sustainable
programs. Financial stability in higher education is being defined as the ability of an
institution to adequately fund institutional infrastructures (e.g., departmental units),
allocate resources, accumulate wealth, and manage risk (Schinasi, 2004). Financial
sustainability is the ability of an institution to manage their financial, social and
environmental risks, obligations and opportunities over a period of time (Schinasi, 2004).

FINANCIAL STABILITY IN ONLINE EDUCATION 48

Figure 1. Gap analysis process
Presumed Performance Assets
When conducting a gap analysis assessment in accordance with Clark and Estes
(2008) framework, it is necessary to validate that the assumed causes or facilitators
contributing to closing the gaps in knowledge, motivation, and organization are correct.
Without a thorough assessment of the facilitators that are contributing to closing the
performance gap, relevant recommendations will not be implemented because the source
of the problem is not appropriately identified. This study investigated these facilitators
by conducting informal scanning interviews, assessing learning and motivational theory,
and a comprehensive review of the literature surrounding financial principles necessary
for successful online program management.
Guiding Background Information
Scanning interviews with key stakeholders, a thorough review of the literature,
and a personal interest in higher education financing are foundational information used to

FINANCIAL STABILITY IN ONLINE EDUCATION 49
guide the study. The information obtained is divided and categorized using Clark and
Estes’ (2008) knowledge, motivational and organizational framework.
Knowledge and skills.
Through higher education readings, conversations with various colleagues, and
general interest in higher education finance, the author was drawn to understand more
about the increase in online educational offerings (Dew, 2012). The first step in that
process was identifying key stakeholders working in online higher education with similar
contexts as those within the partner sites of this study. Those conversations highlighted
information about the knowledge factors that influence administrators’ ability to create
financially stable and sustainable programs.
The key stakeholders alluded to several knowledge factors that were critical to the
development and implementation of their particular online program. Those factors
included a sound financial background, experience with online program launches, and
exceptional communication skills. The stories of these key stakeholders informed both
the research questions and the lens from which the literature review was conducted. The
information about what knowledge and skills administrators need to manage a financially
stable and sustainable online program was echoed in the literature. A goal of this study
was to identify those factors more clearly and validate their causes so as to provide a
guide for institutions seeking to launch similar online programs in the future.
Motivation.
In addition to the knowledge factors highlighted in the scanning interviews, there
was particular relevance to the underlying motivational factors related to the knowledge
and skill factors needed to manage a financially stable and sustainable online program.

FINANCIAL STABILITY IN ONLINE EDUCATION 50
The stories of the key stakeholders hinged around two main points of emphasis: a) fear of
failure and b) lack of vision. The key stakeholders discussed that often times, their
experiences with launching and managing online programs was dictated by a fear of
failure or a lack of vision. Specifically, this fear of failure and lack of vision was tied to a
knowledge and skill deficit. However, the individuals were not motivated to address
those knowledge and skill gaps because they were afraid to fail and/or did not have the
organizational vision necessary to understand the importance of learning the skill set.
Once again, the underlying motivational factors for administrators and program directors
to address these knowledge and skill deficits was outlined and reinforced in the literature.
Organization.
Essential to both the knowledge and skill factors and underlying motivational
factors, the scanning interviews highlighted two primary organizational factors that
contribute to administrators and program directors being able to manage and implement
financially stable and sustainable online programs. The stories of the key stakeholders
spoke directly to the importance of the institution’s culture of innovation and to the
allocation of resources. These two factors, one a cultural model and the other a cultural
setting, were also found to be relevant in the literature. These factors will need to be
examined more critically during the testing stage of this study.
Learning and Motivation Theory
As discussed in the previous chapter, there is extensive literature related to the
knowledge, motivation, and organizational factors that serve as facilitators or inhibitors
to the promising practice of online program financing. While not all of the presumed
assets will be evident in this study via the participating partner school sites, all of these

FINANCIAL STABILITY IN ONLINE EDUCATION 51
assets are important to include and understand as they are considered to be critical in the
performance outcomes related to successful online program financing.
Knowledge and skills.
Krathwohl (2002) proposed assessing the knowledge and skills needed in order to
successfully complete a task by utilizing a four-tiered definition of knowledge: factual,
conceptual, procedural, and metacognitive. Factual knowledge is where individuals have
the necessary knowledge to complete a task (Krathwohl, 2002). Conceptual knowledge
is the theories and principles that individuals need to know in order to be successful
(Krathwohl, 2002). Procedural knowledge is one’s understanding of how to accomplish a
desired task as well as the order of operations that must be followed in order to achieve
the desired results (Krathwohl, 2002). Lastly, metacognitive knowledge is defined as
one’s ability to self-reflect on what is occurring and then determining how to
appropriately modify ones approach (Krathwohl, 2002).
According to the literature, there are three critical knowledge and skill factors for
administrators and program directors to display in order to produce financially stable and
sustainable online programs: a) knowledge and understanding of financial principles
(Lenington, 1996), b) ability to forecast financial expenditures against revenues (Barr &
McClellan, 2010), and c) communication skills necessary to build institutional capacity
(Argenti, Howell, & Beck, 2005; Goodman, 2006).
Motivation.
Clark and Estes (2008), Mayer (2011) and Rueda (2011) all proposed assessing
the motivational factors needed in order to determine whether participants are allocating
the appropriate effort to a task in order to complete it as necessary. The literature

FINANCIAL STABILITY IN ONLINE EDUCATION 52
identifies two motivational forces specific to administrators that contribute to the
financial stability and sustainability of online programs: a) the need to increase
enrollment (Caudill, 2009; McCafferty, 2014; Rovai & Downey, 2010) and b) the need to
remain competitive (Allen & Seaman, 2010; Marginson & Van der Wende, 2007; Volery
& Lord, 2000). Both of these motivational forces are related to the mental effort required
to comprehend the new managerial challenges posed by online degree programs.
Organization.
Rueda (2011) identifies the importance of both cultural models and cultural
settings when analyzing an organization and how it operates. Cultural models are shared
beliefs and understandings that are evident in the practices of the organization’s
constituents while cultural settings are the social contexts in which the cultural models
are enacted (Rueda, 2011). Cultural models are the invisible values, beliefs and attitudes
of an organization that are often automated whereas cultural settings are the manifestation
of the cultural models in everyday life (Gallimore and Goldenberg, 2001).
There are two main cultural models that contribute to financially stable and
sustainable practices: a) a healthy culture of competition (Marginson & Van der Wende,
2007; Volery & Lord, 2000), and b) a culture of continuous improvement (Detert,
Schroeder, & Mauriel, 2000; Venkatraman, 2007). These cultures are invisible to those
within the organization but are evident in how the organization conducts itself each day.
Similarly, there are three main cultural settings that contribute to financially stable and
sustainable practices: a) proper resource allocation through private sector partnerships
(Baines & Chiarelott, 2010; Bok, 2009; Carpentier, 2012; Morey, 2004; Peel et al, 2002),
b) effective communication strategies (Argenti, Howell, & Beck, 2005; Goodman, 2006),

FINANCIAL STABILITY IN ONLINE EDUCATION 53
and c) an efficient organizational structure (Allen & Seaman, 2010; Cullen et al, 2003;
Husson, 2012; Lenington, 1996; Shelton & Saltsman, 2005). All three of these cultural
settings are manifested in the daily life of the organization through various operational
tasks, policies, procedures, and work flows (Keller, 1983).
Summary
Table 1. Summary of assumed contributors to financial stability and sustainability of
online graduate programs.

Assets
Sources
Knowledge Motivation Organizational
Processes
Scanning Interviews

• Sound financial
background

• Experience with
online program
launches

• Exceptional
communication
skills

• Fear of failure

• Lack of institutional
vision

• Culture of
innovation

• Adequate resource
allocation

Related Literature • Knowledge &
understanding of
financial principles

• Ability to forecast
expenditures
against revenues

• Exceptional
communication
skills

• Need to increase
enrollment

• Need to remain
competitive
regionally &
nationally

• Culture of
competition

• Culture of
continuous
improvement

• Proper resource
allocation through
private sector
partnerships

• Effective
communication
strategies

• Efficient
organizational
structure

FINANCIAL STABILITY IN ONLINE EDUCATION 54
Validation of the Performance Assets
Having established an understanding of the knowledge, motivation, and
organizational assets that contribute to or inhibit the achievement of a performance goal,
it is necessary to discuss the strategies that were used to assess the factors in the programs
that are most salient to the purpose of this study. These specific factors were the focus of
the testing process in hopes of validating the assumed causes for purposes of providing
other institutions with the benchmark guidelines necessary to create a financially stable
and sustainable promising practice in their own online programs. The remainder of the
information in this chapter will therefore focus on establishing a framework for assessing
the performance indicators.
Validation of the Performance Assets: Knowledge
Krathwohl (2002) provides a framework for analyzing the various levels of
knowledge. The author proposes a four-tiered level of knowledge and describes the
various components of each level (Krathwohl, 2002). Krathwohl’s (2002) four levels of
knowledge are factual, conceptual, procedural, and metacognitive. Using Krathwohl’s
(2002) level of knowledge, one can evaluate the level of knowledge and skills of online
program directors that is needed for financially stable and sustainable online programs.
In the sections below, a detailed understanding of the various forms of knowledge will be
provided in addition to recommendations as to how to address these issues.
Validation of factual knowledge assets.
According to Krathwohl (2002), factual knowledge is defined as the information
one requires in order to complete a specific task. This knowledge is actualized through
facts, names, and terminologies. In order to validate factual knowledge one can

FINANCIAL STABILITY IN ONLINE EDUCATION 55
administer assessments that require participants to answer questions in order to assess
their level of knowledge or interview them in regards to this basic, surface-level
information. For the purposes of this study, in order to validate the factual knowledge
causes, a survey was administered to administrators and program directors at each partner
institution (Appendix A). Administrators were asked about their experience with
financial principles and program management in higher education. These questions
directly focused on the knowledge and skill of administrators and program directors as it
relates to creating a financially stable and sustainable online program.
Validation of conceptual knowledge assets.
According to Krathwohl (2002), conceptual knowledge is related to one’s ability
to understand the principles and/or theories surrounding a topic in order to function more
properly or effectively. Conceptual knowledge can be examined via surveys where
participants are asked to identify and categorize theories and/or compare concepts and via
interviews where they are asked to paraphrase concepts or operating procedures. In order
to assess the conceptual knowledge of individuals at each partner institution responsible
for organizing, funding, and financially planning online graduate programs, a survey was
given to administrators and program directors at each partner institution that asked more
in-depth questions specific to the financial management of their online programs.
Validation of procedural knowledge assets.
According to Krathwohl (2002), procedural knowledge is an individual’s ability
to comprehend and articulate the order of operations necessary in order to complete a
task. Procedural knowledge of administrators and program directors was assessed in
regards to their comprehensive understanding of the financial processes needed to

FINANCIAL STABILITY IN ONLINE EDUCATION 56
successfully launch and manage an online graduate program. Based on the results of the
surveys, follow-up interviews were conducted. Respondents were asked to clarify and
explain their institution’s financial procedures and the strategies that were implemented
on their campus. Probing questions tower asked uncover the rationale for why certain
financial determinations were made.
Validation of metacognitive knowledge assets.
According to Krathwohl (2002) metacognitive knowledge is one’s ability to
assess one’s approach, reflect upon the approach, and alter the approach as necessary. In
order to validate the assumed factors related to understanding and experience of financial
principles, interviews were used to analyze administrators’ thought processes, personal
approaches to various tasks, and strategies for managing and implementing financial
principles. Probing questions were asked to determine the rationale for these
determinations. In order to validate the assumed factor that administrators and program
directors need foundational knowledge and experience of financial management, detailed
understanding of prior experiences and metacognitive thought processes were gathered.
A copy of the interview protocol is attached in Appendix B.
Table 2. Summary of assumed knowledge assets administrators and program directors
need to create and manage financially stable online programs and their validation.

Assumed Knowledge Asset How will it be validated?
(Factual) (Conceptual) (Procedural)
• Administrators and program directors need to
possess a knowledge & understanding of
financial principles in the context of higher
education

• Administrators and program directors will be
given a survey that assesses their knowledge
level and asks them to assign an importance
level to each area of financial management

(Factual) (Conceptual) (Procedural)
• Administrators and program directors need to
possess the ability to forecast expenditures
against revenues

• Administrators and program directors will be
given a survey that assesses their knowledge
and experience level with budgeting revenues
vs. expenses

FINANCIAL STABILITY IN ONLINE EDUCATION 57
(Factual) (Conceptual) (Procedural)
• Administrators and program directors need to
have experience with financial management,
particularly with start-up or developmental
programs

• Administrators and program directors will be
surveyed and interviewed about their
experience and comfort level of financially
managing academic programs, specifically
online programs

(Factual) (Conceptual) (Procedural)
• Administrators and program directors need to
have a foundational knowledge, skill, and
comfort level with the required technologies
necessary for online learning

• Administrators and program directors will be
interviewed and asked to explain their
understanding, experience, and comfort level
with various technologies required for online
learning

(Factual) (Conceptual) (Procedural)
(Metacognitive)
• Administrators and program directors need to
know how to communicate complex financial
issues to their constituents

• Administrators and program directors will be
interviewed and asked to explain their
understanding, experience, and mental thought
processes for communicating complex financial
issues to constituents

(Metacognitive)
• Administrators and program directors need to
know the rationale for why they are making
certain financial determinations in order to
effectively communicate

• Administrators and program directors will be
interviewed and asked to explain their mental
thought processes for how and why certain
financial determinations are made

Validation of Performance Assets: Motivation
Motivation is the second component of Clark and Estes’ (2008) gap analysis
model. Motivation is the study of what causes people to engage in certain activities or
efforts and is at the core of why people do certain tasks, their willingness to continue
doing the task, and the level of effort committed to the task (Clark & Estes, 2008). Clark
and Estes (2008) term these motivation indices as choice, persistence, and mental effort.
First, active choice is an individual’s voluntary willingness to choose to engage in
a certain task (Clark & Estes, 2008). The second index is persistence, which refers to an
individual’s ability to remain engaged in the execution of a certain task (Clark & Estes,
2008). And lastly, mental effort is displayed when an individual applies new learning to
a difficult, novel, or challenging task (Clark & Estes, 2008). Motivation is influenced by

FINANCIAL STABILITY IN ONLINE EDUCATION 58
multiple variables including self-efficacy, values, attributions, interest, and goals (Clark
& Estes, 2008). All of these variables influence the motivation of an individual. Thus,
the goal of this study’s design is to identify the knowledge and skills an administrator
needs to create and manage a financially stable and sustainable online graduate program,
determine if the administrators are displaying those knowledge and skill factors, uncover
the motivational forces behind those determinations, and establish the organizational
structures that are most conducive to allowing these behaviors.
Table 3. Summary of assumed motivational factors that inhibit administrators and
program directors from addressing performance gaps related to financial stability and
their validation.

Motivational Asset Type of Indicator Possible Cause(s) How will it be
validated?

• Administrators and
program directors
are afraid to fail

• Active Choice

• Lack of Self-
Efficacy

• I will survey
administrators and
program directors
using a Likert Scale
and ask them to
rank their levels of
fear and anxiety
when beginning to
launch the online
graduate program

• Administrators and
program directors
lack understanding
and buy-in of
institutional vision
for online programs

• Task Value

• Attainment Value,
Interest, & Goals

• I will survey
administrators and
program directors
using a Likert Scale
and ask them to
rank their opinion
of the importance
level that online
programming has in
the institutional
mission

• Administrators and
program directors
feel the need to
increase enrollment

• Task Value

• Attainment Value,
Interest, & Goals

• I will interview
administrators and
program directors
and ask them to
elaborate on the

FINANCIAL STABILITY IN ONLINE EDUCATION 59
reasons that the
institution chose to
pursue online
graduate
programming

• Administrators and
program directors
feel the need to
remain competitive
with their peers
both regionally &
nationally

• Mental Effort &
Persistence

• Attainment Value,
Interest, & Goals

• I will interview
administrators and
program directors
and ask them to
discuss the
influence of
regional and
national
competition in the
decision making
process to invest
initially and
continually in
online graduate
programming

Validation of the Performance Assets: Organization/Culture/Context
Cultural settings and cultural models (Rueda, 2011) are better understood by
examining the contextual dynamics of a situation. When analyzing an organization, it is
important to consider the cultural models and settings that influence the organization in
order to determine the visible and invisible structures in place (Rueda, 2011). Examples
of cultural models include lack of trust, culture of competition, or negative attitudes
whereas examples of cultural settings include effective role models, benchmarking,
communication strategies, available resources, policies, procedures, and/or organizational
directives. The goal of this study is to validate which factors are facilitating the financial
stability and sustainability of online graduate programs.

FINANCIAL STABILITY IN ONLINE EDUCATION 60
Table 4. Summary of assumed organizational/culture/context assets and their validation.

Organizational Asset Possible Organizational Causes How will it be validated?

• The partner institution
possess a culture of
competition

• Cultural Model

• I will survey administrators
and program directors using
a Likert Scale and ask them
to rank their opinion of the
institution’s level of
competition both internally
and externally

• The partner institution
emphasizes a culture of
continuous improvement

• Cultural Model

• I will survey administrators
and program directors using
a Likert Scale and ask them
to rank their opinion of the
institution’s commitment
level to growth, innovation,
and continuous improvement

• The partner institution as
properly allocated resources
and utilized seed funding
made available through
private sector partnerships

• Cultural Setting

• I will interview
administrators and program
directors and ask them to
elaborate on how finances
were allocated internally to
manage start-up costs (e.g.,
staffing, LMS) and
externally through private
sector partnerships, grants, or
alternative revenue sources

• The partner institution
engage in effective
communication strategies for
purposes of benchmarking
and establishing vision

• Cultural Setting

• I will interview
administrators and program
directors and ask them to
explain their strategy for
communicating the logistical
operations and benchmarking
plan for the online platform
as well as the overall impact
that the online graduate
program has on the
institution’s mission

• The partner institutions have
an efficient and effective
organizational structure

• Cultural Setting

• I will interview
administrators and program
directors and ask them to
give their opinion on which
organizational structures
most helped and most
hindered creating a

FINANCIAL STABILITY IN ONLINE EDUCATION 61
financially stable and
sustainable online graduate
program (e.g., financial
model, reporting structures,
institutional demographics)

Participating Stakeholders
The population for this gap analysis will be drawn from the seven partner
institutions that utilize the same SaaS provider for their online graduate program(s). The
partner institutions were selected using what Merriam (2014) refers to as “purposeful
sampling.” This sampling technique strategically identifies key stakeholders and selects
those individuals or groups as possible study subjects because they will yield the
information best suited for the purpose of the study (Merriam, 2014). The seven partner
institutions all offer high quality online graduate degree programs, share a goal of
providing their online students with an academic experience equivalent to an on-ground
format, and utilize a common cloud-based SaaS provider that partners with highly
selective institutions and utilizes synchronous video-conferencing technology to enable
an interactive and face-to-face online learning environment.
Program administrators at each participating school site will be contacted in order
to have them assist in identifying the individuals responsible for organizing, funding, and
financially planning the online graduate program on their campus. Typically, these
individuals are institutional administrators and/or program directors. All individuals
responsible for organizing, funding, and financially planning the online graduate program
on their campus will be emailed a survey via the point of contact for each partner school
site. Additionally, follow-up interviews will be conducted at each partner institution.

FINANCIAL STABILITY IN ONLINE EDUCATION 62
Data Collection
Prior to conducting the study, permission was obtained from the University of
Southern California’s Institutional Review Board (IRB). In order to validate the assumed
knowledge, motivation, and organizational causes, various methods of data collection
will be employed including surveys and telephone interviews. This study is designed to
include various methods of data collection in order to triangulate the data for purposes of
validating the findings (Maxwell, 2013). The anonymity and confidentiality of
respondents was of utmost importance throughout the study. As a result, all surveys were
conducted online anonymously prior to any follow-up interview. No identifiable
information was collected in the anonymous surveys. Additionally, since anonymity is
not possible in the interviews, identifiable information was safeguarded via a password
protected documents. Participant information was only shared with the research team
and faculty advisors. The documents with identifiable information were destroyed at the
end of the study. In reporting the findings, all identifiable characteristics were removed
and pseudonyms were used to ensure anonymity.
Surveys
Once approval from the USC IRB was received, the partner institutions point of
contact for this study was contacted. This individual, often referred to as the gatekeeper
for research (Merriam, 2014), served as the liaison and facilitator for completion of the
survey. Once communication and an initial research relationship were been established
with the point of contact at each partner institution, email correspondence that included a
link to the survey was sent.

FINANCIAL STABILITY IN ONLINE EDUCATION 63
All key stakeholders identified as potential study participants (e.g., online
program directors, financial managers, administrators). The anonymous survey was
twenty questions in length and took participants approximately fifteen minutes to
complete. The questions in the survey were based on the assumed knowledge,
motivation, and organization assets outlined in the previous sections. Prior to asking
questions relating to the assumed causes, participants were asked to provide basic
demographic information including the title of their current position, the school in which
they work, how long they have worked in that particular position, and how long they
have worked at that institution. In order to ensure the anonymity and confidentiality of
all survey participants, responses were stored on a password protected computer and were
destroyed at the completion of the study.
Interviews
Interviews served as the second source of data for this promising practices study
on the factors necessary for program directors to create and manage a financially stable
and sustainable online graduate program. The interview protocol was intentionally
created based upon the previously outlined assumed factors that contribute to or impinge
upon the program directors’ ability to establish financial stability and sustainability. The
interview protocol includes eleven interview questions, each with associating probing
questions that were implemented to ascertain additional, rich, contextual answers. The
interviews were administered via telephone.
In order to recruit study participants, contact was made with the point of contact
at each participating school site to request direction to the individuals responsible for
organizing, funding, and financially planning of their online graduate programs. Through

FINANCIAL STABILITY IN ONLINE EDUCATION 64
this gatekeeper, access to key stakeholders was gained. The identified individuals at each
partner institution responsible for organizing, funding, and financially planning of online
graduate programs were contacted and interviews were scheduled.
This technique is a combination of convenience and purposeful recruitment
(Merriam, 2014). These individuals were purposefully selected because of their
professional experiences but also because they are whom the research team has the ability
to access via the point of contact at each partner school site. The interviews themselves
were recorded and transcribed immediately after the interview was completed. Each
interview followed a standard interview protocol that began with basic demographic
information and then transitioned to questions related to validating the assumed
knowledge, motivation, and organization factors effecting college counseling centers as
listed above. The interview protocol is located in Appendix B.
Trustworthiness of Data
Ensuring the trustworthiness of data is crucial to all forms of inquiry and research
(Maxwell, 2013). In order to ensure that the data is trustworthy, all data sources were
triangulated to ensure that all conclusions are supported by multiple sources of data.
Furthermore, all survey and interview questions were based on proven validation
measures from Clark and Estes’ (2008) gap analysis model and the Learning and
Motivational Theory framework. Utmost levels of confidentiality were kept in order to
encourage study participants to openly share their professional experiences.
Role of Investigator
I am a doctoral student in the University of Southern California (USC) Rossier
School of Education. Additionally, I work at USC in the Office of Athletic Compliance.

FINANCIAL STABILITY IN ONLINE EDUCATION 65
My role as a student and staff member at USC is not connected to the Master’s in
Teaching (MAT) program nor the Master’s in Social Work (MSW) at USC, both of
which are participating programs in this study. It is also important to note that I am not
responsible for organizing or financially planning online programs. Therefore, my
perspective is one of curiosity and objectivity where the intent of my research is
exploratory in nature (Merriam, 2014). As a result of my role on the non-academic side
of the institution, this study allows me to view financial challenges in a new context.
This type of exploratory study seeks to better understand promising practices and
does not contain inherent or associated risk (Merriam, 2014). Thus, my current role as a
student and staff member at USC combined with my lack of academic administrative
experience renders my role as the investigator irrelevant to the purpose of this study.
Administrators each partner institution were made aware of my role as an
investigator, student, and USC staff member. Additionally, steps were taken to ensure
their anonymity and participants were reassured that all participation is voluntary and
there will not be consequences for opting out of the study or providing information that
would not be considered a promising practice. Individuals who are interviewed were
promised confidentiality, as all identifying information was removed.
Data Analysis
In order to interpret the data obtained via surveys and interviews, I engaged in a
meticulous process of data analysis. Once all data was collected, the process of
triangulation became necessary to determine whether various conclusions are supported
by multiple sources (Miles, Huberman & Saldaña, 2014). Specific to survey data, I
utilized frequency analysis to depict the percentage of the stakeholders who are in

FINANCIAL STABILITY IN ONLINE EDUCATION 66
agreement with certain statements and/or share common experiences. For interview data,
I organized phenomena, themes, and reoccurring tendencies via a priori coding methods.
The a priori codes were extracted from the literature as well as via the empirical codes
discovered during the interview process (Harding, 2013).
The a priori codes derived from the literature were based on the knowledge,
motivational, and organizational factors that contribute to managing a financially stable
and sustainable online graduate program. Miles, Huberman, and Saldaña (2014) assert
that the data coding process will be multifaceted. There were multiple cycles of coding
where data points were categorized, combined, organized, and structured in terms of
common patterns and themes.
Limitations and Delimitations
Limitations
Credibility and trustworthiness are critical to qualitative research (Maxwell,
2013). More specifically, these are tools used in qualitative research to scientifically
structure complex, organic, and multifaceted phenomena (Maxwell, 2013). Despite the
size of the data set, this study is deeply focused on the promising practices of the
individuals at each partner institution responsible for organizing, funding, and financially
planning of online graduate programs. This deep, rich, contextual analysis is at the core
of qualitative research (Merriam, 2014).
According to Maxwell (2013) internal generalizability can be defined as being
generalizable within the community. For purposes of this study, the partner sites that
utilize the SaaS provider are considered to be the research community. Therefore, the
results of this study will lack external validity as the findings will not be able to be fully

FINANCIAL STABILITY IN ONLINE EDUCATION 67
generalized to other university settings due to differing student populations or online
modalities. However, this information can still serve as a guide of best practices for how
peer institutions are financially managing their online graduate programs for the overall
betterment of the institution.
Within the context of this study’s research community, I am confident that
conclusions can be validated. Specifically, I relied on triangulation as a means of
verifying findings (Maxwell, 2013). This was achieved through comparing interview
assertions to survey data. The surveys were issued first as a way of focusing my
interview questions. Therefore, it is critical to account for reactivity as well as my biases
and errors while conducting interviews (Maxwell, 2013).
Maxwell (2013) defines reactivity as the influence that the researcher has on the
environment or individuals being studied. In the case of this study, my presence and
professional or academic position could possibly influence participants to act and/or
speak in certain ways. This level of error is unavoidable in qualitative research
(Maxwell, 2013). However, through proper research design and protocols, the level of
error can be minimized and/or controlled. Additionally, it is critical to identify
alternative or discrepant examples that contradict my constructed assertions (Maxwell
2013). This method of analysis is difficult to implement because it is a natural reaction
to look for evidence to support assumptions (Maxwell, 2013). Nevertheless, I will
implement a best practice for data analysis where I will seek to actually disconfirm my
assumptions. Lastly, the body of literature surrounding financial stability in online
education will remain as a foundation for my analysis.

FINANCIAL STABILITY IN ONLINE EDUCATION 68
Delimitations
There are a few delimitations to my study that result from the generalizability of
this study as well as the external validity based on the study design I have chosen to
implement. The delimitations focus on my choice of partner school sites as well as the
stakeholder group on which my study focuses. Again, the focus of this study is to
develop a promising practices framework for institutions that have launched a financially
stable and sustainable online graduate program. While all of these partner school sites
utilize a common SaaS provider and attract high achieving students, the information
obtained might not be generalizable to all other colleges and universities who cater to a
different caliber of students or who utilize a different SaaS provider. However, the goal
of this study remains to provide a promising practices framework based on Clark and
Estes’ (2008) gap analysis method that will be useful to other institutions in regards to
performance improvement related to financially managing online graduate programs.
For purposes of this study, the main stakeholder group was the individuals at each
partner institution responsible for organizing, funding, and financially planning the online
graduate program. Most often, these individuals were the administrators at each
institution with financial and program development oversight (e.g., Dean, Vice Dean,
Director of Financial Planning). This study seeks to identify the knowledge and skills,
motivation, and organizational factors that, from the perspective of administrators,
facilitate or inhibit financial stability and sustainability.
This particular study is limited by the stakeholder group in focus as the data could
yield differing results had I focused on another constituent group. The experiences of all
stakeholders are important in order to gain a better understanding about the knowledge

FINANCIAL STABILITY IN ONLINE EDUCATION 69
and skills of online program directors that is needed for financially stable and sustainable
programs. However, such a study is outside the scope of this research. Additionally, the
data is limited by the honesty of study participants. Ideally, participants will provide
appropriate and accurate answers in regards to their experiences and knowledge with
online program financing. Nevertheless, it should be noted that there is a possibility that
they will alter answers to what they assume is the appropriate response. Participant
honesty is a factor that could affect the quality of both my survey and interview
responses. Lastly, the quality of data could be influenced by a lack of understanding or
misinterpretation of questions during the interview and survey process.

FINANCIAL STABILITY IN ONLINE EDUCATION 70
CHAPTER FOUR: RESULTS AND FINDINGS
The purpose of this study was to identify the knowledge, motivation and
organizational factors that administrators find facilitate financial stability and
sustainability for their online programs. These questions guided the inquiry:
4. What knowledge, skills, motivational and organizational factors do
administrators perceive as facilitating or inhibiting financial stability and
sustainability for the online programs in these institutions?
5. For those factors perceived to be facilitating financial stability and
sustainability, what promising practices could be adapted to and utilized by
other units in the same agency?
6. How might those interventions, whether promising practices or
recommendations, be evaluated for effectiveness?
In higher education, adequate funding, appropriate resource allocation, and
strategic financial planning are central to the success of any higher education academic
program (Lerner, 1999). This study has defined financial stability as the ability of an
institution to adequately fund institutional infrastructures (e.g., departmental units),
allocate resources, accumulate wealth, and manage risk (Schinasi, 2004). Similarly, this
study has defined financial sustainability as the ability of an institution to manage its
financial, social and environmental risks, obligations and opportunities over a period of
time (Schinasi, 2004). These abilities contribute to the overall financial health of an
institution, specifically as they relate to successful online education programming (Dew,
2012; Gibb et al, 2013; Volery & Lord, 2000).

FINANCIAL STABILITY IN ONLINE EDUCATION 71
An aim of this study was to close this knowledge gap and provide a foundation of
information that can be used to successfully launch and maintain online graduate
programs in the future. To obtain this information, this study used a modified version of
Clark and Estes’ (2008) research model known as a gap analysis. In particular, this
promising practices study identified assets of financial stability in order to better
understand the knowledge and skills of administrators that were needed for financially
stable and sustainable programs, what motivated them to engage in those behaviors, and
what organizational assets contributed to those processes. By identifying the
characteristics of a promising online educational practice, this study may benefit other
institutions that wish to design a financially viable online program of their own.
Participating Institutions
The participating institutions all share the following principles with respect to
online graduate programs: a) a common cloud-based software-as-a-service (SaaS), b)
selective admissions criteria similar to the general institution’s admissions criteria, c) a
funding model that utilizes loaned capital from the SaaS provider; and d) an
infrastructure specifically designed to manage the uniqueness of online degree programs.
Each institution is differentiated by factors such as geographic location, program market,
institutional funding model, staffing allocations, etc. All of these factors were examined
in this study using the modified gap analysis through the perspective of the
administrator(s) responsible for the financial planning of online graduate programs.
The study was conducted in two phases: a) an initial online survey was sent to key
stakeholders at each partner school site to establish a baseline understanding of the
knowledge, motivation, and organizational factors being exemplified; and b) follow-up

FINANCIAL STABILITY IN ONLINE EDUCATION 72
telephone interviews that delved into the specific causes for each knowledge, motivation,
and organizational asset being investigated.
The following discussion organizes the results of the data collection process
outlined in Chapter 3 and synthesizes findings into validated assets. A summary of the
assumed assets that were previously explored is outlined in Table 1.
Table 1. Summary of assumed assets to financial stability and sustainability of online
graduate programs.

Assets
Sources
Knowledge Motivation Organizational Processes
Focus of Scanning
Interviews

• Sound financial
background

• Experience with
online program
launches

• Exceptional
communication
skills

• Willingness to
take calculated
risks

• Understanding
of institutional
vision

• Culture of innovation

• Adequate resource allocation

Related Literature • Knowledge &
understanding of
financial
principles

• Ability to forecast
expenditures
against revenues

• Exceptional
communication
skills

• Need to
increase
enrollment

• Need to remain
competitive
regionally &
nationally

• Culture of healthy competition
& continuous improvement

• Proper resource allocation
through private sector
partnerships

• Effective communication
strategies

• Efficient organizational structure

Participating Stakeholders
The study participants were purposefully selected from the seven partner school
sites that agreed to participate in the study. The sampling technique strategically
identified key stakeholders at each institution who were best situated to provide accurate,

FINANCIAL STABILITY IN ONLINE EDUCATION 73
meaningful, and first-hand information related to creating and sustaining a financially
viable online graduate program. In order to obtain this purposeful sample, program
administrators at each partner school site were contacted for the purpose of having them
assist in identifying the individuals responsible for the financial planning of the online
graduate program on their particular campus. The program administrator assisted with
introductions and, subsequently, the surveys were emailed to and telephone interviews
scheduled with volunteers from among those recommended.
The study participants’ demographics and statistics are summarized in Table 5.
Table 5. Summary of study participant demographic data.

Total Number
of Participants
Response Rate Employment Types
Average Years of
Experience Working
with Online Education
13  Survey – Invited 17
participants and 13
participated

 Interview – Invited
17 participants and
13 participated
 Program Administrator
 Director of Online
Operations
 Associate Vice Dean
 Chief Financial Officer
 Director of Business
Administration

6.7

Results and Findings for Knowledge Causes
With the influx of online educational course offerings (Dew, 2012; Morey, 2004),
administrators responsible for the financial planning of online graduate programs need to
maintain an appropriate level of knowledge and skills related to financial management.
Three points of emphasis outlined in the literature for administrators to possess were: a)
the knowledge and understanding of financial principles (Lenington, 1996); b) an ability
to forecast financial expenditures against revenues (Barr & McClellan, 2010); and c) the
communication skills necessary to build institutional capacity (Argenti, Howell, & Beck,

FINANCIAL STABILITY IN ONLINE EDUCATION 74
2005; Goodman, 2006). The initial survey and subsequent telephone interviews sought to
delve deeper into those three knowledge assets.
Survey Results
Thirteen individuals at the seven different partner school sites completed the
survey. The survey consisted of ten questions asking participants to rank his/her
agreement with the particular statement and five short answer responses. A critical
aspect of the survey was to identify what participants knew about creating and sustaining
financially stable online programs and how confident they felt in their ability to
accomplish that work. The assumed knowledge assets and their corresponding survey
results are summarized in Table 6. Assumed assets were validated if the average
participant ranking or level of agreement was .666 or higher on the Likert Scale.
Table 6. Summary of validation results for assumed knowledge assets that administrators
and program directors need to create and manage financially stable online programs.

Assumed Knowledge Asset Results of Survey - Validation

• Administrators and program directors need to
possess a knowledge & understanding of
financial principles in the context of higher
education.

 Asset Validated - Participants had an above
average confidence and experience level with
financial management in higher education.

• Administrators and program directors need to
possess the ability to forecast expenditures
against revenues.

 Asset Validated – Although participants had
varying levels of confidence and experience
with respect to forecasting expenditures within
online education, most confirmed its
importance.

• Administrators and program directors need to
have experience with financial management,
particularly with start-up or developmental
programs.

 Asset Validated - Participants had an above
average confidence and experience level with
financial management in higher education,
specifically as it relates to online education.

The survey addressed the three knowledge assets for administrators seeking to
create financially stable and sustainable online graduate programs that were gleaned from

FINANCIAL STABILITY IN ONLINE EDUCATION 75
the literature. Administrators need to possess knowledge and understanding of financial
principles specific to higher education (Lenington, 1996; Lerner, 1999). The survey
asked several questions that gauged confidence and experience level with financial
principles in general as well as within the context of higher education. The assumed asset
was validated because participants reported that their knowledge and confidence level
related to financial management in online education was 4.44 on a scale of 1 (low) to 6
(high). Participants had an average of 6.7 years of experience working with financial
management specific to online programs. Ultimately, participants’ confidence levels
relate to their experience and knowledge of financial principles within higher education.
The second asset that the survey sought to validate was whether or not
administrators and program directors possessed the ability to forecast expenditures
against revenues, which the literature highlighted as a critical aspect of financial
management (Barr & McClellan, 2010; Lenington, 1996). The literature alluded to the
importance of revenue and expenditure forecasting in developing industries like online
education where there is a lack of traditional and historical data from which to base
decisions (Allen & Seaman, 2011). Although participants reported varying levels of
experience and confidence with regards to revenue and expenditure forecasting, eleven of
thirteen participants noted the importance of this skill. Specifically, the average reported
confidence level was just 3.14 on a scale of 1 (low) to 5 (high) compared to 85% of
participants identifying this skill as critical. This finding influenced several interview
questions in order to further delve into how participants successfully managed revenue
and expenditure forecasting in an industry where enrollment projections are vital to
managing a balanced budget despite lacking the confidence or experience.

FINANCIAL STABILITY IN ONLINE EDUCATION 76
Finally, the literature identified the need for administrators to have experience
with financial management, particularly with start-up or developmental programs such as
online education (Argenti, Howell, & Beck, 2005; Goodman, 2006). The survey was
intentional in asking participants to rank their experience and confidence level with the
principles of financial management (e.g., budgeting, revenue and expense projections,
resource allocation) specifically within the context of online education. The asset was
validated not only by the average 6.7 years of experience that participants had working
with online education but also by the reported confidence ranking of 3.75 on a scale of 1
(low) to 5 (high); which equates to 75% of participants expressing confidence with
financial management in online education. The reported confidence rankings were an
important finding that was reiterated during the follow-up interviews.
Findings from Interviews
The follow-up interviews were conducted over the telephone and scheduled
through the point of contact at each partner school site. Each interview lasted
approximately forty-five minutes. The primary reason for issuing the survey before the
interviews was to establish contextual information that would influence the follow-up
telephone interview process. The purpose of the interview protocol was to delve deeper
into the participants’ knowledge and skills of financial processes, to better understand
what motivates them to engage in those behaviors, and to identify what organizational
factors contributed to those processes. The assumed knowledge assets and their
corresponding results from the interviews are summarized in Table 7. Assumed assets
were validated if eight or more of the thirteen participants provided responses that
aligned with the associated a priori codes.

FINANCIAL STABILITY IN ONLINE EDUCATION 77
Table 7. Summary of validation results for assumed knowledge assets that administrators
and program directors need to create and manage financially stable online programs.

Assumed Knowledge Asset Results of Interview - Validation

• Administrators and program directors need to
have a foundational knowledge, skill, and
comfort level with the required technologies
necessary for online learning.

 Asset Validated - Participants all possessed
foundational knowledge, skills, and comfort
levels with the required technologies
necessary for online learning.

• Administrators and program directors need to
know how to communicate complex financial
issues to their constituents.

 Asset Validated – All participants expressed
the importance of communication in their role.
However, the majority of participants
expressed the desire to have known and
demonstrated those communications skills
sooner and with more nuanced ability.

• Administrators and program directors need to
know the rationale for why they are making
certain financial determinations in order to
effectively communicate to constituents.

 Asset Validated – Participants all expressed
the importance of program alignment with
institutional mission and vision.

The literature identified the importance of administrators having a foundational
knowledge and comfort level with the required technologies necessary for online learning
(Allen & Seaman, 2010; Appana, 2008). The interviews sought to validate this assumed
asset by asking questions that would provide context to the participants’ experience and
overall confidence with the required technologies necessary for online education. The
asset was ultimately validated because all thirteen participants mentioned prior
experience and ongoing professional development as important processes.
The second assumed knowledge asset examined in the interviews was that
administrators and program directors needed to know how to communicate the nuanced
financial issues to constituents (Argenti, Howell, & Beck, 2005; Barr & McClellan, 2010;
Lenington, 1996; Goodman, 2006). The importance of this skill is amplified in an
emerging or non-traditional delivery method such as online education where previous

FINANCIAL STABILITY IN ONLINE EDUCATION 78
success stories are less commonly known (Allen & Seaman, 2011). The prevailing
thought was that administrators must understand the financial impact the delivery method
can have on the department as well as possess a political understanding of how best to
communicate the financial nuances associated with the online program.
This asset was validated in the study and, in fact, the majority of participants
identified communication skills as a foundational skill for success as an area in which
they are constantly seeking to improve. One participant noted that communicating the
nuances of a complex financial process with a variety of stakeholders has proved to be
“the most important factor in creating support [from constituents].” The participant
continued by saying, “the inherent trust issues with for-profit entities and higher
education made it extremely challenging to initially create buy-in among the faculty.”
Another participant noted that understanding the “financial data from the provider was
initially a struggle for me let alone communicating that information to our faculty
members.” Compounding the challenge in communicating this information to faculty
was that the financial the financial model, specifically the proportion of revenue going to
the SaaS partner, might not have been to the liking of the faculty.
Communication with constituents, particularly the full-time faculty, and potential
trust issues with the SaaS provider became hindrances to a successful program. One
participant elaborated on the nuance of this communication challenge with full-time
faculty by saying, “in many ways, entering into an educational partnership with a third-
party is easier. I mean, it is a whole lot easier to tell a company that they’re not
performing or meeting goals for the program than to tell [full-time] faculty members.”

FINANCIAL STABILITY IN ONLINE EDUCATION 79
Communication with full-time faculty about the rationale for the program, how it
fit into the institution’s vision, and how their individual workloads would be impacted
were all mentioned as critical, yet challenging, talking points. Specifically, one
participant noted, “faculty initially struggled to grasp that this program was not going to
be cheaper or easier and it was not some watered-down version of the academic work
they were already doing in the on-ground program.” Another participant reiterated that
faculty “definitely had concerns about increasing their teaching load and the scaling of
the program.” Moreover, when asked what each participant wished he/she knew before
engaging in an online program, seven of thirteen participants highlighted the need for
political savvy when communicating the financial goals of the program to constituents,
specifically with full-time faculty. Although this specific asset was not discussed in the
literature, it is a relevant nuance to the findings that will be unpacked in Chapter 5.
Lastly, the literature suggests that administrators needed to know the rationale for
why they made certain financial determinations in order to effectively communicate with
constituents. The assumed asset was validated because all thirteen participants noted the
importance of program alignment with institutional mission and vision. Each participant
was keenly aware of how the online graduate program fit into the larger mission and
goals of the academic department and for the institution at large. One participant
commented that “online education was a big push from the top down. Our dean
understood the marching orders for our [academic unit] and online education was integral
to [our department] executing those orders.” Additionally, several participants noted that
the underlying rationale for launching the program remained constant even as the

FINANCIAL STABILITY IN ONLINE EDUCATION 80
programs grew and evolved. The commitment to the overall vision for the program was
noted in one particular participant’s response:
The institution launched a 5-year plan in 2010 and a key part of that plan was to
expand [the institution’s] national reputation and the audience that we can reach.
Naturally, online education was an area that could achieve those results provided
we did it the right way. That has always been our goal with this program.
The data revealed the relationship between understanding the program’s educational
purpose was intricately tied to communication from administrators and the resulting
support from constituents, particularly full-time faculty members.
Synthesis of Results and Findings for Knowledge Causes
The survey and interviews provided interesting information related to the assumed
knowledge and skills necessary for administrators to create and manage a financially
stable and sustainable online graduate program. In sum, all six of the assumed
knowledge assets were validated. However, the most telling information derived from
the data was that participants clearly understood what was needed to create a financially
stable program. Comprehension was not the issue. The challenge for administrators was
two-fold: although they understood what was needed to be financially successful, they
did not necessarily know the correct information before engaging in the online program
and/or they struggled with effectively communicating the information that they did know
to their various constituents.
This finding was significant in that it identified the root problem as a lack of
effective communication skills as opposed to a void or gap in knowledge. Further
analysis of this finding and opportunities for future research are needed. However, for

FINANCIAL STABILITY IN ONLINE EDUCATION 81
purposes of this study, the importance of effective communication skills, especially when
dealing with faculty, cannot be understated. Higher education and for-profit partnerships
represent a fundamental challenge for some individuals within the academy, including
faculty (Allen & Seaman, 2011). As the for-profit industry continues to develop within
higher education institutions (e.g., partnerships with for-profit entities as opposed to
altogether separate for-profit institutions), faculty autonomy will diminish (Allen &
Seaman, 2011). The decision-making authority as it relates to the actual learning
experience may shift away from the faculty and toward the administration; all the more
reason for these individuals to grasp both the pedagogical and financial components of
online degree programs. A common thread throughout the survey and interviews was the
important role that faculty play in the overall success of the program.
Results and Findings for Motivation Causes
The second component of Clark and Estes (2008) gap analysis model is
motivation; which is the study of what causes people to engage in certain activities. The
concept of motivation is divided into three motivational indices: a) choice, b) persistence,
and c) mental effort. Active choice is an individual’s voluntary willingness to choose to
engage in a certain task (Clark & Estes, 2008). Persistence refers to an individual’s
ability to remain engaged in the execution of a certain task (Clark & Estes, 2008). Lastly,
mental effort is displayed when an individual applies new learning to a difficult, novel, or
challenging task (Clark & Estes, 2008).
The underlying influences of motivation include self-efficacy, values, attributions,
interest, and goals (Clark & Estes, 2008). This study was focused on identifying the
knowledge and skills an administrator needed to create and manage a financially stable

FINANCIAL STABILITY IN ONLINE EDUCATION 82
and sustainable online graduate program, determine if the administrators were
demonstrating those assets, and then uncover the motivational forces behind those
determinations. Motivation was the critical linkage between understanding what was
required to be successful and actually engaging in those behaviors and practices.
Survey Results
The survey specifically addressed the motivational indicators of active choice and
task value. The questions in the survey were strategically designed to highlight the
importance levels that administrators placed on certain aspects of the online program and
their corresponding actions related to that placed value. Assumed assets were validated if
the average participant ranking or level of agreement was .666 or higher on the associated
Likert Scale. The findings gleaned from the survey are summarized in Table 8.
Table 8. Summary of validation results for assumed motivation assets that administrators
and program directors need to create and manage financially stable online programs.

Assumed Motivational Asset Type of Indicator Survey Results - Validation

• Administrators and
program directors are
willing to take
calculated risks.

• Active Choice

• Asset Validated – Although a slight majority of
participants expressed anxiety and fear related to
launching an online program, the fear and
anxiety were more related to the uncertainties of
a new program and not necessarily failure.
Participants were willing to assume risk because
possibility for success outweighed those risks.

• Administrators and
program directors value
and prioritize the
institutional vision for
online programs.

• Task Value

• Asset Validated – Participants valued and
prioritized the purpose of online programming
as it related to the overall departmental and
institutional vision and therefore supported the
goals of creating a financially stable and
sustainable program.

The first assumed motivational asset from the literature was that administrators
and program directors were willing to take calculated risks (Bacow et al, 2012; Rovai &

FINANCIAL STABILITY IN ONLINE EDUCATION 83
Downey, 2010). This mindset was an asset attributed to whether or not participants
actively chose to engage in the launch of an online program and/or the behaviors needed
to create a successful program. Although a slight majority of participants expressed
anxiety and fear related to the initial launch of the online program, the general sentiment
from participants through the open-ended survey questions was that the fear and anxiety
were more related to the uncertainties of a new program and not necessarily the
possibility of failure and therefore the asset was validated. Ultimately, participants were
willing to assume the calculated risks because those risks were outweighed by the
possibility for financial success.
One participant commented that “[the university administration] had done [their]
homework to know that this was going to work. But we just didn’t know how it would
work. There were so many unknowns and ultimately that caused consternation for some
folks.” This risk-taking mindset is a valuable asset in an emerging industry like online
education (Allen & Seaman, 2011; Bacow et al, 2012). The asset was validated in the
study because participants were not paralyzed by the fear of the unknown; however, it did
present an initial challenge in terms of motivating administrators and program directors to
fully support and engage in the online process.
The second assumed motivational asset was that administrators and program
directors valued and prioritized the institutional vision for online programs, which
consequently increased support from the top down. This type of motivational issue was
tied to the associated value that individuals assigned to the specific task. Volery and
Lord (2000) posit that a lack of value or support for a given task will ultimately hinder
one’s motivation to engage in that task. Therefore, if the administrators or program

FINANCIAL STABILITY IN ONLINE EDUCATION 84
directors had not supported the overall vision for the online program, they would be less
likely to engage in the practices that create a successful online program. This assumed
motivational asset was validated because all thirteen participants valued and prioritized
the purpose of online programming as it related to the overall vision for the institution.
The administrators supported the online nexus of the vision and prioritized that creating a
financially stable and sustainable program supported the department’s efforts to achieve
those goals. The participants’ assigned values for the various purposes of the program
were investigated further during the follow-up interviews.
Findings from Interviews
Similar to the survey, the telephone interviews also focused on addressing the
associated task value of an individual’s motivation. However, the telephone interviews
also aimed to glean information related to participant’s mental effort and persistence. In
online education, possessing the resilience to work through unique challenges is
paramount to the lasting success of the program (Bacow et al, 2012; Rovai & Downey,
2010). The questions asked during the telephone interviews were strategically designed
to highlight the importance that administrators placed on certain aspects of the online
program, their corresponding actions related to that placed value, and whether or not they
were committed to persevering through the obstacles that may have occurred throughout
the process, specifically during the initial launch of the program. Assumed assets were
validated if eight or more participants provided responses that aligned with the associated
a priori codes that were drawn from the coded interviews. The findings gleaned from the
telephone interviews are summarized in Table 9.

FINANCIAL STABILITY IN ONLINE EDUCATION 85
Table 9. Summary of validation results for assumed motivation assets that administrators
and program directors need to create and manage financially stable online programs.

The third assumed motivational asset drawn from the literature was that
administrators and program directors felt the need to increase enrollment. Online
programs are clearly an opportunity for institutions to increase their academic reach
(Brown & Hoxby, 2014; Caudill, 2009). The findings from the interviews were therefore
not surprising and this particular motivational asset was indeed validated. Administrators
and program directors echoed similar sentiments regarding the power of online programs
to “expand the reach of the program” and ultimately of the institution as a whole. One
participant commented that “an online program in and of itself is a form of marketing in
the online space. Our goal was to push our [intuitional] brand out to a larger and
different population of student through this program.”
Because the SaaS provider had the capability to reach new populations,
administrators responsible for making programmatic decisions at each partner school site
felt compelled to make expansion a priority. Borins (2001) posits that online programs
can have a significant impact on an institution’s ability to target a new student
demographic. In so doing, the institution simultaneously expands its brand and
Motivational Asset Type of Indicator Interview Results - Validation

• Administrators and
program directors feel the
need to increase
enrollment.

• Task Value
• Mental Effort

• Asset Validated – All participants noted the
importance of expanding the reach of program
and/or institution. Increasing enrollment was
important but the primary reason was to
increase the reach of the institution.

• Administrators and
program directors feel the
need and pressure to
remain competitive with
their peer institutions.

• Mental Effort
• Persistence

• Asset Validated – All participants noted the
importance of the online realm for creating
separation from peer institutions.

FINANCIAL STABILITY IN ONLINE EDUCATION 86
reputation. Increasing enrollment was a priority for each partner school site however, the
decision to increase enrollment was made for the specific purpose of expanding the reach
of institution and not just to increase students and/or revenue.
The fourth assumed motivational asset was that administrators and program
directors felt the need and pressure to remain competitive with their regional and national
peer institutions. Overwhelmingly, the administrators and program directors saw the
online program as an opportunity to meet specific goals of the department and the
institution. Entering into a “marriage with [the SaaS provider]” was a critical step in
achieving those goals. Whether it was reaching a new student demographic, expanding
the brand of the institution, increasing revenue or rankings, or simply growing its
pedagogical capabilities, administrators saw the online program as the vehicle for growth.
The specific motivational asset of remaining competitive was validated.
Despite the fact that the partner schools were often the first institution to enter
into the online realm in their particular academic degree program, or vertical, competition
was still at the core of the program’s success. One participant noted, “[their] goal was
not just to remain competitive, but rather to create separation from peer institutions. We
wanted to be the first, the best, the leader.” In a sense, the institution was valuing a
culture of healthy competition, which is also an organizational asset that will be
examined in the next section. The prevailing sentiment from participants was that the
online realm was a “frontier we needed to explore to get where we ultimately needed to
go.” Although participants expressed some levels of anxiety and consternation about
meeting the enrollment projections required for financial stability and sustainability, the
underlying sentiment was a healthy confidence in the common SaaS provider being used.

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Synthesis of Results and Findings for Motivation Causes
All four assumed motivation assets were validated through the study. However,
coupling answers from the survey with the narrative and commentary from the interviews
provided much-needed context for why certain assets were considered more important.
Although administrators and program directors were not necessarily afraid to fail, it was
interesting to note that the uncertainties of entering into partnership with a for-profit
entity in an altogether new academic venture were rather daunting for participants. This
point was summarized by one participant’s statement that “[the partner school site]
always knew we were moving in the right direction. That was not the issue. The scary
part was moving without much information to gauge progress.” Ultimately, these
institutions made the decision to launch the program for the overall betterment of the
program and the institution. Thus, understanding that the outcomes outweigh the risks is
critical for administrators who must navigate the unknowns of the online realm and
communicate decisions to constituents in spite of the associated fear of these unknowns.
In order to be willing to take calculated risks, administrators and program
directors valued and prioritized the rationale for engaging in the online program. There
was no confusion or inconsistent messaging delivered for why the online program was
important to achieving certain program and institutional goals and objectives. In fact, all
thirteen participants understood that increasing enrollment was necessary for the greater
purpose of achieving institutional goals and not just to increase students for the sake of
increasing students or their associated tuition revenue. The messaging from the
administration played an integral role in creating the value, support, and engagement.

FINANCIAL STABILITY IN ONLINE EDUCATION 88
Finally, the messaging from administration about achieving strategic goals for the
institution included the importance of online programs in distinguishing the institution
from peer institutions and not just to remain competitive with them. In most instances,
these programs were the first of their kind and the goal was to be a leader in the industry.
Participants often remarked that the online graduate program has been a “leadership
opportunity for the institution.” And although participants noted the importance of
distinguishing the program from peers, participants also commented that they chose this
particular SaaS provider because of the prestigious institutions that also utilized its
services. One participant commented that “associating with the likes of [the other partner
school sites] became a selling point to our faculty.” The online graduate program with
this particular SaaS provider served to increase differentiation as well as prestige,
reputation, and brand. Although this particular asset was not highlighted in the literature,
it is a nuance of the findings worth noting and researching further.
Results and Findings for Organization Causes
Rueda (2011) identifies an organization’s culture through cultural settings and
cultural models. When analyzing the knowledge and skills of online program directors
and what motivates them to engage in those behaviors, it is important to consider both the
cultural models and settings that contribute to those processes (Rueda, 2011).
Examples of cultural models include lack of trust, culture of competition, or negative
attitudes whereas examples of cultural settings might include effective role models,
benchmarking options, communication strategies, available resources, policies,
procedures, and/or organizational directives. The survey and telephone interviews sought

FINANCIAL STABILITY IN ONLINE EDUCATION 89
to better understand the organizational assets that underlie the knowledge and skills and
related motivational assets for administrators at each partner school site.
Survey Results
The survey protocol was designed to uncover the cultural models that potentially
contribute to administrators and program directors creating and managing a financially
stable and sustainable online graduate program. The questions highlighted the underlying
culture and organizational context of the partner school sites. Specifically, the survey
addressed the competitive nature of the institution and its desire to strive for continuous
improvement. Assumed organizational assets were validated if the average participant
ranking or level of agreement was .666 or higher on the associated Likert Scale. The
organizational findings gleaned from the survey are summarized in Table 10.
Table 10. Summary of validation results for assumed organizational assets that
administrators and program directors need to create and manage financially stable
online programs.

Organizational Asset Possible Organizational
Causes
Survey Results - Validation

• The partner institution
possesses a healthy culture of
competition.

• Cultural Model

• Asset Validated – Participants
mentioned the importance of healthy
and purpose-driven competition even
if it was not an external competition or
comparison

• The partner institution
emphasizes a culture of
continuous improvement.

• Cultural Model

• Asset Validated - Participants were
driven to continuously improve and
better its program, students, and
graduates.

The first assumed organizational asset was that a financially successful school site
possesses a healthy culture of competition. Similar to the validated motivational asset
previously discussed, the partner institutions’ inclination towards competition was rooted

FINANCIAL STABILITY IN ONLINE EDUCATION 90
in innovation and not necessarily in peer comparisons. Thus, a healthy culture of
competition, in fact, was readily apparent and validated through the survey. Twelve of
thirteen participants mentioned the importance of healthy and purpose-driven
competition. Whether it was competing against previous graduation figures or
enrollment projections from the SaaS provider, competition was a critical factor in
determining success, even if it was not an external competition or comparison.
The second assumed organizational asset was that a financially successful partner
school site emphasizes a culture of continuous improvement. As noted by the validated
culture of healthy competition, the survey also indicated that partner school sites were
driven to continuously improve and better their program, students, and graduates. In
particular, participants noted the extensive review and examination of data from the SaaS
provider, which serves to benchmark and gauge all aspects of the program. One
participant highlighted a perfect example of their goal for continuous improvement:
We evaluate everything. [The SaaS provider] is great in that they provide reports
for everything and we are able to make strategic decisions about the program,
especially the financials, based on the comparisons of those reports. It is always a
competition with ourselves to improve, but that’s just the nature of our program.
Based on comments made in both the survey and interviews, this particular
organizational asset was validated. One participant emphasized that “we are always
competing to become better in terms of the delivered product, the relationship with the
provider, the type of student we are admitting, and the quality of student we graduate.”
Several participants reiterated the linkage between healthy competition and continuous
improvement: “more than anything, we are trying to put out a better product this year,

FINANCIAL STABILITY IN ONLINE EDUCATION 91
this term, this week than we did previously.” Partner school sites even based staffing
decisions on their ability to continuously improve upon financial projections. One
participant noted, “Our personnel decisions come back to how we are competing against
the numbers.” As a result, the partner school sites encouraged continuous improvement.
Findings from Interviews
In contrast to the survey, the telephone interviews delved into the cultural settings
of the partner school sites as opposed to the cultural models. The interview protocol was
strategically designed to highlight the systems in place at each partner school site that
contributed to a financially stable and sustainable online graduate program. Those
specific systems, or cultural settings, were important factors to consider when analyzing
what administrators knew and what motivated them to act. Assumed organizational
assets were validated if eight or more participants provided responses that aligned with
the associated a priori codes that were drawn from the coded interviews. The findings
gleaned from the telephone interviews are summarized in Table 11.
Table 11. Summary of validation results for assumed organizational assets that
administrators and program directors need to create and manage financially stable
online programs.

Organizational Asset Possible Organizational Causes Interview Results - Validation

• The partner institution
properly allocated resources
and utilized seed funding
made available through
private sector partnerships.

• Cultural Setting

• Asset Validated – All
participants noted the
importance of seed funding
from the provider.

• The partner institution
engaged in effective
communication strategies for
purposes of benchmarking
and establishing vision.

• Cultural Setting

• Asset Validated – All
participants understood the
importance of
communication but did
identify it as an area of
improvement.

FINANCIAL STABILITY IN ONLINE EDUCATION 92

• The participating online
programs have an efficient
and effective organizational
structure.

• Cultural Setting

• Asset Validated – All
participants highlighted the
importance of an efficient
organizational structure but
did not come to a consensus
for what this looked like
and/or how it is achieved.

The third assumed organizational asset was that a financially successful partner
school site properly allocated resources and utilized seed funding made available through
private sector partnerships. This organizational asset was validated since all thirteen
participants confirmed the necessity of soliciting private funding in order to maintain a
financially successful online program. The SaaS provider “had resources that we simply
could never come up with. They had the marketing, the LMS, the human resources, and
definitely the financial resources to back our program from its inception.” Without
question, the allocation of resources from the private sector partnership played an integral
role in the development of these online programs.
The fourth assumed organizational asset was that a financially successful partner
school site engaged in effective communication strategies for purposes of benchmarking
and establishing vision. This organizational asset was also validated. However, it is
worth noting that nine of thirteen participants identified utilizing communication to
establish vision and support as an area for improvement. When asked what information
they wish they knew when they began the online graduate program, these nine
participants reiterated the difficulty in communicating the goals for the program and their
progress towards meeting those goals to key stakeholders.
In particular, one participant commented, “Communication is everything. I think
of myself as the quarterback who gets the play call from the sideline and then has to

FINANCIAL STABILITY IN ONLINE EDUCATION 93
disseminate that information to a variety of stakeholders.” An interesting nuance that
developed throughout the interviews was the emphasis placed on administrators having
specific experience within higher education; more so than business or online education in
general. The prevailing thought was that higher education is such a “unique environment
to engage in these sorts of endeavors” that it behooves the program to have leaders with
substantial experience within higher education.
The final assumed organizational asset gleaned from the literature was that
financially successful partner school sites had an efficient and effective organizational
structure. Both study instruments confirmed this assumed asset. Specifically, ten of
thirteen participants noted the importance of how the online program is structured within
the context of the academic unit and the reporting lines of the institution. Therefore, this
organizational asset was validated as well. However, there was no consensus on how the
online program should ideally be structured to maximize financial success.
The participants provided rich commentary about how the structure of the online
program could be bettered but noted that that was institutionally specific. One participant
commented, “Our structure seems to work. We are completely autonomous from the
department. I work closely with [the SaaS provider] to manage the budget against
enrollment projections. But in the end, we are a hand-to-mouth department; we only
spend what we bring in.” Another participant offered a seemingly opposite structure
where finances “are managed similar to any other program on campus. We receive
tuition revenue from enrollment and simultaneously pay for IT services, admissions,
registrar’s office, and student health insurance.” However, all participants were able to

FINANCIAL STABILITY IN ONLINE EDUCATION 94
negotiate the payment of tuition tax and/or university services (e.g., parking, building
maintenance, food services) in order to maximize revenues for the program.
Synthesis of Results and Findings for Organization Causes
All five assumed organizational assets were validated through the study.
Additionally, it was interesting to note the similarities between underlying organizational
assets and the necessary knowledge and motivational assets previously validated. Both
study instruments confirmed the importance of, and linkage between, a culture of healthy
competition and culture of continuous improvement. These two cultural models were
intricately related and validated by participants. The partner institutions strived to
become better thus competing with internal, and not necessarily external, benchmarks.
The narrative from the interviews emphasized the influence of the private sector
partnership from both an administrative and financial standpoint. The “relationship with
[the private sector partner] is more like a marriage. There is a give and take and we both
know that we need each other to be successful.” The sentiment from participants was
that successfully engaging in online programming required substantial resources.
Contrary to popular opinion, online education is not always cheaper.
Both instruments reiterated that although each participant may possess the
necessary knowledge and skills and understand what is required to be financially
successful, there are organizational systems in place that can encourage and discourage
success. These cultural settings are critical in determining what is actually required to be
successful in the first place. For example, participants understood that communication
was necessary and even possessed the necessary skills. However, the partner institutions

FINANCIAL STABILITY IN ONLINE EDUCATION 95
did not always allow for effective communication strategies because of inefficient
systems, inconsistent messaging, and/or structural hindrances.
Summary
The findings of this study were interesting and challenging. It was interesting to
consider what was required, and not required, to create and manage a financially stable
and sustainable online graduate program. It was equally challenging to consider the areas
of online education that required further research. The participants of this study provided
unique insight into their financial successes as well as opportunities for future
improvement. This chapter outlined the results of the survey and corresponding
telephone interviews and highlighted key findings. Ultimately, particular study validated
all fifteen assets that contributed to a financially stable and sustainable online graduate
program. A summary of the findings is presented in Table 12.
Table 12. Summary of validated knowledge, motivation, and organizational assets.
Knowledge Assets • Administrators and program directors need to possess a knowledge and
understanding of financial principles in the context of higher education.

• Administrators and program directors need to possess the ability to forecast
expenditures against revenues.

• Administrators and program directors need to have experience with
financial management, particularly with start-up or developmental
programs.

• Administrators and program directors need to have a foundational
knowledge, skill, and comfort level with the required technologies
necessary for online learning.

• Administrators and program directors need to know how to communicate
complex financial issues to their constituents.

• Administrators and program directors need to know the rationale for why
they are making certain financial determinations in order to effectively
communicate to constituents.

Motivation Assets • Administrators and program directors are willing to take calculated risks.

FINANCIAL STABILITY IN ONLINE EDUCATION 96
• Administrators and program directors value and prioritize the institutional
vision for online programs.

• Administrators and program directors feel the need to increase enrollment.

• Administrators and program directors feel the need and pressure to remain
competitive with their peer institutions.

Organizational Assets • The partner institution possesses a healthy culture of competition.

• The partner institution emphasizes a culture of continuous improvement.

• The partner institution properly allocated resources and utilized seed
funding made available through private sector partnerships.

• The partner institution engaged in effective communication strategies for
purposes of benchmarking and establishing vision.

• The participating online programs have an efficient and effective
organizational structure.

In the following chapter, these fifteen validated assets will be examined and
synthesized into practical and digestible recommendations. These recommendations, or
recommendations, will be divided into Knowledge, Motivation, and Organization.
Additionally, an implementation plan will be outlined for adopting the proposed
recommendations. Finally, opportunities for future research will be discussed and the
importance of building on the findings of this study will be incorporated into a final
conclusion.

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CHAPTER FIVE: RECOMMENDATIONS, IMPLEMENTATION AND
EVALUATION
The purpose of this chapter is to present evidence-based recommendations for
addressing the validated knowledge, motivation, and organizational assets that
contributed to financially stable and sustainable online graduate schools outlined in
Chapter 4. In total fifteen assets were validated and analyzed in Chapter 4. These assets
were validated through analysis of survey and interview responses, paying particular
attention to recurring themes and commonalities between participant responses.
However, to more precisely describe actionable recommendations for institutions seeking
to engage in synchronous, online education, the fifteen assets were synthesized and
consolidated into five, empirically supported, recommendations that are categorized by
their associated knowledge, motivation, or organizational dimension. The selection of
these five recommendations is described in the following section. These five
recommendations were prioritized in congruence with the proposed implementation plan.
This chapter concludes by designing a plan to evaluate the effectiveness of each proposed
recommendation using Kirkpatrick’s (2007) model for evaluation.
Selection of Validated Assets and Rationale
In Chapter 4, fifteen assumed assets that contribute to the financial stability and
sustainability of online graduate programs were validated. In order to identify what
knowledge and skills administrators need to support financially stable and sustainable
programs, what motivates them to engage in those behaviors, and what organizational
assets contribute to those processes, the remainder of this study presents the validated

FINANCIAL STABILITY IN ONLINE EDUCATION 98
assets and their associated recommendations through the lens of motivation,
organizational, and knowledge dimensions, in that order.
Clark and Estes (2008) posit that the order of solution implementation is critical
to understand the interconnectedness of each solution. The motivational dimension is
addressed first because different constituents and stakeholders have different beliefs,
attitudes, values, backgrounds and thinking, and therefore it is critical to galvanize the
organization’s constituents around a shared vision in order spur action (Clark & Estes,
2008). Clark and Estes (2008) then recommend shifting focus to the organizational
dimension because an organization’s shared beliefs and social systems can be shaped in
such a way to influence progress. Finally, the specific knowledge and skills of an
organization’s constituents should be addressed so as to develop each individual towards
the organization’s shared vision (Clark & Estes, 2008). As this study seeks to provide a
blueprint for institutions to create a financially stable and sustainable online program, it is
important to consider the order in which recommendations should be implemented.
The complete list of all fifteen validated assets, the five selected validated assets,
the rationale for their selection, and the order in which they will be discussed is displayed
in Table 12.
Table 12. Selected Validated Assets Summary Table.
Dimension Validated Asset Selected Validated
Asset(s)
Rationale for Selection

Motivation
Assets
• Administrators and program directors
are willing to take calculated risks.

• Administrators and program directors
value and prioritize the institutional
vision for online programs.

• Administrators and program directors
feel the need to increase enrollment.

Goal Setting:
Administrators and
program directors value
the institutional vision
for online programs.

Attainment Value:
Administrators and
program directors are

Both of these validated
assets relate to strategic
planning and
communicative
principles. As such,
these two validated assets
were selected as key
motivational dimensions
to build upon.

FINANCIAL STABILITY IN ONLINE EDUCATION 99
• Administrators and program directors
feel the need and pressure to remain
competitive with peer institutions.

willing to take calculated
risks.

Organizational
Assets
• The partner institution possesses a
healthy culture of competition.

• The partner institution emphasizes a
culture of continuous improvement.

• The partner institution properly
allocated resources and utilized seed
funding made available through
private sector partnerships.

• The partner institution engaged in
effective communication strategies
for purposes of benchmarking and
establishing vision.

The participating online programs have
an efficient and effective organizational
structure.

Leadership:
The partner institution
possesses a healthy
culture of competition
and continuous
improvement.

Two validated assets (a
healthy culture of
competition and a culture
of continuous
improvement) were
combined for purposes of
identifying an actionable
recommendation. These
two validated assets were
selected due to the
overlap and
commonalities of
participant responses
throughout the data
collection process.

Knowledge
Assets
• Administrators and program directors
need to possess a knowledge and
understanding of financial principles
in the context of higher education.

• Administrators and program directors
need to possess the ability to forecast
expenditures against revenues.

• Administrators and program directors
need to have experience with
financial management, particularly
with start-up or developmental
programs.

• Administrators and program directors
need to have a foundational
knowledge, skill, and comfort level
with the required technologies
necessary for online learning.

• Administrators and program directors
need to know how to communicate
complex financial issues to their
constituents.

• Administrators and program directors
need to know the rationale for why
they are making certain financial
determinations in order to effectively
communicate to constituents.

Conceptual Knowledge
Understanding &
Applying:
Administrators and
program directors
possess a knowledge and
understanding of
financial principles in
the context of higher
education.

Conceptual &
Procedural Knowledge
Understanding,
Applying, & Analyzing:
Administrators and
program directors know
how to communicate
complex financial issues
to their constituents.

These two validated
assets were selected for
actionable
recommendations due to
the consistent emphasis
on the unique nature of
the higher education
community and the
importance of effectively
communicating within
that community.

FINANCIAL STABILITY IN ONLINE EDUCATION 100
These five validated assets were chosen for further discussion and analysis based
on the goal of achieving a financially stable and sustainable online graduate program and
the role the administrators and program directors play in achieving that goal. Each of
these five assets was purposefully chosen for further consideration for several reasons.
First, since addressing the motivational dimension first is paramount, the validated assets
that relate to strategic planning and communicative principles were chosen. Second, two
validated assets (a healthy culture of competition and a culture of continuous
improvement) were combined due to the overlap and commonalities of participant
responses throughout the data collection process. Third, certain validated knowledge
assets were selected due to the consistent emphasis on the unique nature of the higher
education community and the importance of effectively communicating within that
community. Lastly, the subsequent practical, affordable, and realistically achievable
recommendations were considered when selecting validated assets to pursue. Ultimately,
this study seeks to provide valuable and actionable recommendations to others.
The first validated asset requiring further investigation is that administrators and
program directors should value and prioritize the institutional vision for online programs.
This specific asset derives from a motivational dimension related to goal setting. Clark
and Estes (2008) recommend that practical solutions begin with the motivational
dimensions of an organization’s constituents because motivation is at the core of why
people engage in certain tasks, their willingness to continue doing the task, and the level
of effort they commit towards the task (Clark & Estes, 2008). Therefore, the concept that
individuals will take action towards a specific task is first rooted in their underlying
motivation to engage that task, particularly as it relates to the value that the individual

FINANCIAL STABILITY IN ONLINE EDUCATION 101
places on achieving the task. For this reason, valuing and prioritizing the vision for
online programs is of utmost importance and potentially influences other issues.
The second validated asset chosen for consideration is that administrators and
program directors are willing to take calculated risks. This is a motivational asset where
by administrators are willing to take calculated risks due to the associated value that they
place on attaining the goal of achieving a financially viable program. If administrators
believe that the outcome is valuable, they will be more willing to take the necessary risks
to achieve the outcome.
After addressing motivational dimensions, Clark and Estes (2008) recommend
focusing on organizational assets. Here, the cultural models and cultural settings of an
organization can be leveraged to build upon the preexisting motivational dimensions.
The third selected validated asset is that financially stable and sustainable online graduate
programs are a part of institutions and departments that embrace a healthy culture of
competition and continuous improvement. Although these were two separate assets
validated in Chapter 4, the similarities of responses in both the survey and interviews
warranted that the assets be combined into one potential recommendation.
Next, Clark and Estes (2008) suggest shifting attention to the specific knowledge
and skills required to complete the tasks being recommended. For purposes of this study,
the first selected knowledge dimension is that administrators and program directors
possess a knowledge and understanding of financial principles in the context of higher
education. As discussed in Chapter 4, there was considerable attention paid to having
context-specific knowledge related to higher education finances. The particular

FINANCIAL STABILITY IN ONLINE EDUCATION 102
knowledge and skill set needed to achieve a financially stable and sustainable online
graduate program is inextricably tied to the context of higher education.
Finally, once it is confirmed that administrators know what is required to create
and manage a financially successful program, they must be able to communicate that
information to key stakeholders. The final validated asset that will be considered for
potential recommendations is that administrators and program directors are able to
communicate complex financial decisions to constituents. In sum, five validated assets
have been chosen for further consideration and possible recommendations.
Recommendations for Motivation Assets
In Chapter 4, participants outlined numerous factors that contributed to their
engagement in actions, practices, and behaviors that related to financial stability and
sustainability. These motivational factors are categorized into active choice, persistence,
and/or mental effort and can be diagnosed using the underlying psychological constructs
of values, goals, self-efficacy, and attainment.
Goal Setting
The triangulation of survey results and interview findings validated the
motivational assets associated with the underlying construct of goal setting. Locke and
Latham (2002) emphasize that goal setting is intricately related to task performance.
Mainly, the highest level of effort given towards a task occurs when the task is
challenging yet still feasible to achieve. Furthermore, the exemplified commitment
and/or resilience towards goal attainment can be enhanced through inspiring leaders,
clear communication, and shared values (Locke & Latham, 2002). Administrators and
program directors seeking to create and manage financially stable and sustainable online

FINANCIAL STABILITY IN ONLINE EDUCATION 103
graduate programs need to value and prioritize the institutional vision for online
programming. In order to value and prioritize that vision, administrators and program
directors should have clearly defined goals for what a financially successful program
looks and operates like in their particular context, especially in higher education.
The recommendation for ensuring that administrators and program directors value
and prioritize the institutional vision for online programming is to have clear financial
goals and benchmarks for the online program to achieve. Effectively striving towards,
and eventually achieving, a desired outcome derives from clearly understood goals and
objectives to which people are motivated to reach when given concrete, challenging, and
attainable goals (Bandura, 1997). Locke and Latham (2002) underscore the importance
of establishing challenging goals within reason and communicating the importance and
rationale for achieving those goals on a regular basis.
Given the motivational importance of goal setting (Clark & Estes, 2008),
administrators and program directors are recommended to meet with key institutional
leaders (e.g. President, Provosts, Deans) to establish concrete, challenging, attainable,
and measurable goals for the online program on an annual basis. These goals should
include specific outcomes for the institution (e.g., ranking improvement, brand
expansion), the program (e.g., ranking improvement, increased enrollment, financial
benchmarks), staff (e.g., professional development), and students (e.g., admission
standards, graduation rates, job placements). By establishing agreed upon goals that are
regularly revisited, the institution encourages support from its key leaders towards the
overall vision for the institution, which ultimately contributes to establishing a financially
stable and sustainable online program to build upon for years to come.

FINANCIAL STABILITY IN ONLINE EDUCATION 104
Attainment Value
Survey results and interview findings validated the motivational assets associated
with the underlying construct of attainment value. Administrators and program directors
seeking to create and manage financially stable and sustainable online graduate programs
must be willing to take calculated risks. Thomas and Mueller (2000) surveyed 1800
participants to solicit responses indicative of their attitudes and perceptions about the
contributions of entrepreneurship to economic development and to measure personal
values, beliefs, and aptitudes associated with an entrepreneurial orientation. Results of
the study indicate that greater levels of innovation and a propensity for risk-taking are
influenced by visible and invisible aspects of culture (e.g., strategies, resources, policies,
procedures vs. trust levels, value structure).
The recommendation to ensure this validated asset is exemplified is drawn from
the principle that higher levels of value motivate individuals to engage tasks and to
engage those tasks with more persistency and effort (Clark & Estes, 2008; Pintrich,
2003). Given the multiple goals that will be initially agreed upon by key institutional
stakeholders, it is recommended to prioritize goals correctly since individuals will be
more likely to engage goals that they perceive to have the highest value in achieving
(Ambrose et al, 2010; Clark & Estes, 2008).
Task value is increased when administrators understand the value of achieving the
agreed upon goals outlined in the first recommendation. Once administrators understand
and place the appropriate value on attaining each specified goal, they will be more
willing to take the risks associated with achieving those goals because they understand
the ultimate value of a successful outcome (Ambrose, 2010). Task value is also enhanced

FINANCIAL STABILITY IN ONLINE EDUCATION 105
when the information related to the program’s goals is relevant to the administrators,
connected to their interests, and transferable to their constituents (Rueda, 2011).
The recommended recommendation for creating a willingness to take necessary
risks is to provide credible, relevant, and relatable models of how financial success is
being defined. Administrators should be provided with simplified multidimensional
graphics to assist in communicating the financial relationships between variables
(Moriarity, 1979). By providing these types of materials to administrators, they will be
more likely to understand the decision-making rationale that connects to institutional
vision; which ultimately underscore the goals and objectives for the program.
Recommendations for Organization Assets
Chapter 4 provided rich commentary on a number of organizational assets that
contribute to financially stable and sustainable online graduate programs. The following
section seeks to identify the underlying organizational culture and context that facilitates
the promotion of the prioritized validated organizational asset that an institution with a
culture of healthy competition and continuous improvement contributes to a financially
stable and sustainable online graduate program.
Leadership
For purposes of this study, cultural models contribute to the financial policies and
cultural settings are the implementation of them at each partner institution. The validated
organizational asset that the institution must foster and encourage a culture of healthy
competition and continuous improvement is emphasized through the leadership of the
online program. The challenge is that establishing a culture of healthy competition and
continuous improvement demands more than vision and resources; it requires a culture

FINANCIAL STABILITY IN ONLINE EDUCATION 106
that encourages constituents to strive for continuous improvement and an environment
that is conducive to learning and fosters risk-taking (Ahmed, Loh, Zairi, 1999).
A key driver in establishing this culture is the influence of leadership (Smith &
Peterson, 1988). The recommendation to ensure this growth-mindset within the online
program is built on the principle that management must be continually involved and
invested in the improvement process (Smith & Peterson, 1988) and possess the ability to
galvanize constituents, particularly in higher education, around shared goals (Kezar,
2001). Throughout the data collection process, participants reiterated the importance of
the higher education context and the uniqueness of managing programs and people within
this context, full-time faculty in particular. Programs may experience more success when
institutional leaders pay considerable effort and attention in identifying the appropriate
individual(s) to lead the online program and then empower those individuals to lead
(Smith & Peterson, 1988). As such, a recommendation to institutional leaders seeking to
launch an online graduate program would be to intentionally hire program administrators
with familiarity to the political complexities of higher education and its constituents.
Recommendations for Knowledge Assets
Using Anderson and Krathwohl’s (2001) knowledge types and cognitive
processes framework, the validated knowledge assets are organized and categorized by
their associated factual, conceptual, procedural and metacognitive knowledge types. The
validated knowledge assets are aligned with the appropriate cognitive processes
necessary for institutions to create and manage financially stable and sustainable online
graduate programs. The following section identifies recommendations for two prioritized

FINANCIAL STABILITY IN ONLINE EDUCATION 107
validated knowledge assets that are grounded in evidence-based learning and motivation
theories, principles, and prior studies.
Conceptual Knowledge
The recommendation designed to address administrators’ and program directors’
need to possess knowledge and understanding of financial principles within higher
education is rooted in conceptual knowledge. Rueda (2011) asserts that the principles of
conceptual knowledge highlight the relationships and commonalities between
independent bits of information. In order for administrators and program directors to
understand financial principles specific to higher education, it is vital to address the
ability of connecting and transferring prior experience and context-specific financial
knowledge to higher education, and particularly within online education. Information
processing model theory (Kuhn, 1999) also asserts that identifying the prior knowledge
of learners before conducting any sort of training can increase learning outcomes.
The associated cognitive processes for this knowledge and skill are grounded in
comprehension and subsequent applications (Anderson & Krathwohl, 2001). Therefore,
a proposed recommendation would be to create a training program for administrators and
program directors in the process of launching an online graduate program. The training
would be geared towards comprehension of basic financial principles, their application to
higher education, and the connections of the individuals’ prior experience with previously
established best-practices (Ambrose et al, 2010). Again, study participants consistently
emphasized the need for individuals to possess knowledge specific to program
management within higher education. Research suggests that individuals learn, retain,
and apply information more quickly when it is relevant and connected to previous

FINANCIAL STABILITY IN ONLINE EDUCATION 108
interests and/or experiences (Ambrose et al, 2010). As such, a critical step in establishing
the knowledge and comprehension of financial principles in online education is training.
Procedural Knowledge
The next step in the process is the validated knowledge asset that administrators
and program directors need to know how to communicate financial principles and the
underlying rationale to constituents. Conceptual knowledge is required to understand the
multifaceted, interrelatedness of various financial principles, their influence on one
another, and, subsequently, the desired outcomes for the online program (Anderson et al,
2001). However, the specific knowledge components must then be synthesized and
communicated in easy-to-understand, digestible, and relatable information. The ability to
synthesize this information and purposefully and systematically communicate it to key
stakeholders requires both conceptual and procedural knowledge (Anderson et al, 2001).
The cognitive processes associated with these knowledge and skill types are
understanding, applying, and analyzing (Anderson et al, 2001).
A proposed recommendation to address potential communication gaps is to build
upon the initial on-boarding and training sessions and to incorporate job aids in order to
simplify financial principles and the rationale for certain decisions related to financial
management (Rueda, 2011). These job aids could be memorandums highlighting specific
financial statistics related to the online program or operational protocols and procedures
for communicating important financial indicators in a predetermined order of priority. It
may be worthwhile to repurpose the simplified multidimensional graphics identified in
the motivational recommendations to assist in communicating the complex financial
relationships between variables (Moriarity, 1979).

FINANCIAL STABILITY IN ONLINE EDUCATION 109
Implementation Plan
Recommendation Integration
Research indicates that isolated interventions will not be as effective as those that
are relevant, connected, and linked to goals, interests, and prior experience (Ambrose et
al, 2010). Recommendations should always be rooted in the principles of Cognitive Load
Theory (CLT). Ambrose, Bridges, DiPietro, Lovett, and Norman (2010) explain that
CLT enhances learning by segmenting complex material into manageable parts, often
called “chunking.” CLT is an information management strategy that enables learners to
process relevant information in personally meaningful and understandable ways
(Ambrose et al, 2010). With the principles of CLT in mind, administrators and program
directors will be more successfully if they follow an integrated plan that combines each
recommendation within the motivation, organizational, and knowledge dimensions and
recognizes the underlying learning theories that increase the likelihood of success.
A summary of the validated assets, their associated proposed recommendations,
and the implementation of those recommendations is outlined in Table 13.
Table 13. Summary of validated assets, recommendation, and implementation.
Knowledge & Skills Motivation Organizational
Assets • Possess knowledge and
understanding of
financial principles in
the context of higher
education.

• Ability to communicate
complex financial issues
to their constituents.

• Value and
prioritization of the
institutional vision
for online programs.

• Willingness to take
calculated risks.

• Foster a healthy
culture of
competition and
continuous
improvement.

Recommendation • Create training programs
for administrators and
program directors
launching an online
graduate program.
• Administrators and
program directors
need to meet with
institutional leaders
to establish concrete,
• Identify and hire
program
administrators with
specific knowledge,
skill, and

FINANCIAL STABILITY IN ONLINE EDUCATION 110

• Create and provide job
aids to administrators
and program directors in
order to assist in
simplifying financial
principles and the
rationale for certain
decisions related to
financial management
for ease of
communication.
challenging,
attainable, and
measurable goals on
an annual basis.

• Provide credible,
relevant, and
relatable models of
how financial success
is being defined to
both administration
and constituents.

experience within
higher education
and empower those
individuals to lead
and foster a
growth-mindset
culture.

Implementation • Administrators and
program directors will
work closely with the
provider and key
stakeholders to develop
an on-boarding process
that includes overview
of goals, talking points,
and financial literacy
training specific to
online programs.
• Initial goal setting for
the online program
and clear examples of
success will be
incorporated into the
strategic planning
process.

• Assemble a hiring
committee and
outline the
characteristics of an
ideal candidate
prior to making any
program
management
personnel
decisions.

As previously discussed, recommendations are prioritized based on the underlying
learning theory, sequencing of how each recommendation is built upon the next, and the
overall practicality of implementation. Additionally, recommendations are prioritized
based on order of requirements, skill development, timing, and task difficulty (Clark &
Estes, 2008). Given the nuanced connections between recommendations, the processes
for implementing the recommendations can be as important as the recommendations
themselves (Clark & Estes, 2008). Compounding the complexity of this process is the
unique nature of higher education and the process for implementing specific
recommendations within its social and political contexts.
For purposes of implementing the proposed recommendations to the validated
assets needed to establish a financially stable and sustainable online graduate program,
the motivation of key stakeholders is paramount. The importance of program personnel

FINANCIAL STABILITY IN ONLINE EDUCATION 111
having familiarity, comfort, and skill within higher education was echoed by a number of
participants. Ideally, institutional leaders will have the opportunity to hire or allocate
purposefully selected individuals into online program leadership roles in order to
capitalize on validated assets required for financial success. Once these individuals have
been identified and allocated appropriately, institutional leadership can begin to
strategically plan for the launch and management of the program.
Strategic planning is comprised of five principles: communication, participation,
collaboration, shared leadership, and transparency (Bryson, 1988). During the initial
strategic planning sessions for the online graduate program, communication at all levels
is critical. Establishing trust and reciprocal lines of communication will facilitate the
development of participation, collaboration, and shared leadership (Bryson, 1988). As a
result, the institutional leaders and administrators will be able to reach an agreed upon
vision for the program and specific goals to achieve that vision. Thus, the organization of
the program influences the motivation of its participants.
A comprehensive on-boarding process should be developed to translate the
motivational aspirations of participants into actionable tasks for administrators and
program directors. Onboarding, often referred to as organizational socialization, is a
process through which new employees become acculturated into the organization (Bauer
& Erdogan, 2011). It is the process that helps employees learn the context-specific
knowledge, skills, behaviors, attitudes, and belief systems that will foster both individual
and organizational success (Bauer & Erdogan, 2011).
During these initial onboarding training sessions, administrators and program
directors will have the opportunity to relay the vision and goals for the program from

FINANCIAL STABILITY IN ONLINE EDUCATION 112
institutional leaders to the constituents (e.g. faculty members) for implementation. The
onboarding process serves to increase the knowledge and skill level of constituents as
well as their associated motivation to develop those skills. Clark and Estes (2008)
reiterate that an individuals’ motivation to engage a task, his/her knowledge and skill to
complete the task, his/her motivation to communicate the benefits of completing the task,
and the organizational culture that promotes that communication are all related.
Evaluation Plan
After implementing an integrated recommendation plan, an evaluation plan is
needed to determine the effectiveness and impact of each proposed recommendation for
establishing a financially stable and sustainable online graduate program (Clarks & Estes,
2008). The remainder of this section will use Kirkpatrick’s (2007) model for evaluation
to describe the four levels of evaluation needed to determine effectiveness and impact.
Level 1: Reactions
The 1
st
level of evaluation is to check the reactions of participants towards the
particular intervention (Kirkpatrick, 2007). For the previously described implementation
plan, there are two sets of Level 1 reactions to evaluate: the reactions of administrators
upon completion of their strategic planning sessions and their reactions after completing
the onboarding process. Both sets of questions will gauge the reaction of the planning
and training to better understand effectiveness and potential influence on the motivation
levels of administrators and program directors. These questions will be administered
through a survey. The survey will include a Likert Scale to determine rankings and
various levels of agreements with certain statements as well as several open-ended

FINANCIAL STABILITY IN ONLINE EDUCATION 113
questions. In sum, the results of both surveys will indicate the motivational impact of the
strategic planning meetings and subsequent onboarding trainings (Clark & Estes, 2008).
Level 2: Learning
The 2
nd
level of evaluation will verify the learning, motivation, and organizational
change impact of the strategic planning meetings and onboarding trainings (Clark &
Estes, 2008; Kirkpatrick, 2007). Rueda (2011) highlights the importance of 2
nd
level
evaluation when determining if a solution and/or recommendation resulted in any
noticeable change(s). In order to measure learning, it is best to utilize a direct assessment
to determine what learning has occurred (Clark & Estes, 2008). The direct assessment
for administrators and program directors will assess if their knowledge related to the
institutional vision and specific program goals increased through participation in the
strategic planning meetings. Likewise, the direct assessment will also assess if
participants’ financial literacy specific to online education and the necessary skills to
communicate that information increased through participation in the onboarding
trainings. The assessment would be administered before and after each strategic planning
meeting and onboarding training to measure learning outcomes (Kirkpatrick, 2007).
Level 3: Transfer
The 3
rd
level of evaluation focuses on the ability to transfer learnings from
training into the actual work place settings (Clark & Estes, 2008; Kirkpatrick, 2007). To
measure the transfer of skills from the training requires ongoing evaluation and
observation (Kirkpatrick, 2007). Thus, it is important to survey and observe
administrators and program directors at various checkpoints throughout the year. The

FINANCIAL STABILITY IN ONLINE EDUCATION 114
triangulation of surveys and observations will determine if the administrators effectively
transferred the skills learned from the training into their program.
Level 4: Impact
The 4
th
and final level of evaluation addresses impact (Clark & Estes, 2008;
Kirkpatrick, 2007). It is critical that in the final stage of the evaluation plan, the potential
impact of the trainings on the overall financial success of the online graduate program is
measured (Rueda, 2011). As such, this level of evaluation will consider the financial
stability and sustainability of the program and determine if the implemented
recommendations had any bearing on the current outcome. The 3
rd
level evaluations will
be conducted throughout the year whereas the 4
th
level evaluation will be measured at the
end of each fiscal year prior to the next phase of strategic planning meetings.
Limitations
After completing the study, analyzing data, synthesizing findings, and proposing
actionable recommendations, it is worth reiterating the limitations described in Chapter 1
and highlighting two additional areas of concern. Clearly, credibility and trustworthiness
of this study is critical to its qualification as valuable qualitative research (Maxwell,
2013). The limitations outlined in Chapter 1 were the 1) relatively small sample size
(e.g., only thirteen participants), 2) the single common SaaS provider, and 3) the potential
influence of the researcher (e.g., participants responding to researcher’s perceived
interests). All three of these limitations are still causes for concern and should be
considered when evaluating the usefulness or generalizability of findings.
Additionally, this study did not take into consideration whether the partner school
sites were public or private institutions. Through the various survey and interview

FINANCIAL STABILITY IN ONLINE EDUCATION 115
responses, it became evident that the public institutions and private institutions assess and
manage finances differently and therefore the implementation of potential
recommendations may vary depending on the type of institution. Similarly, this study did
not account for the size of the specific online graduate program being managed (e.g., total
number of enrolled students), which was a major driver in terms of how finances were
allocated and financial decisions were made.
Lastly, consideration should be given to the fact that all partner institutions shared
the same SaaS provider. Although this allowed for consistent data, it limited the
generalizability by restricting focus to one provider. In fact, a vast majority of
participants noted the importance of this study’s SaaS provider throughout the online
programs’ academic and administrative management process. The “marriage” with the
provider fostered a healthy balance between academic rigor and financial growth. Given
the generally positive responses associated with this particular SaaS provider, the results
could have been drastically different had a different SaaS provider been utilized.
Looking ahead to future research, additional efforts in disaggregating sample populations
based on funding type, program size, and SaaS provider is recommended.
Nevertheless, findings of this study can still be considered valid knowing that it
was conducted in such a way that guarded against and mitigated the influence of the
limitations. First, qualitative research is defined by its depth and not necessarily breadth
(Maxwell, 2013). This study based its findings on the survey and interview results from
thirteen participants. However, the data from those thirteen participants was first-hand,
thorough, and delved into the specific nuances of financial management at each
institution. Second, Maxwell (2013) considers internal generalizability to be within the

FINANCIAL STABILITY IN ONLINE EDUCATION 116
community of study. Therefore, for institutions that use this particular, or similar, SaaS
provider, the results of this study can potentially serve as a guide of promising practices
for how to organize and manage a financially stable and sustainable online graduate
program. Third, not only were the data collected through two instruments, they were also
analyzed after conducting numerous scanning interviews that provided rich commentary
and contextual information. The role of the researcher, as Maxwell (2013) insists, was
limited to a conduit of collecting and transferring information from participants to reader.
The study could have been improved now having learned the logistics and
intricacies of collecting qualitative data from administrators at higher education
institutions. Mainly, higher education is a completely unique context for conducting
research. Each institution is organized differently, prioritizes different goals, serves
different student populations, and allocates resources accordingly. For example, one
institution may operate in an academic vertical germane to a specific geographic area.
Another institution may have its online program structured as an extension of its on-
ground program compared to others that operate autonomously. Therefore, making
comparisons across partner school sites became challenging given the disparate nature of
the sample. Looking to future research opportunities, the uniqueness of each institution
should be considered, controlled for, and ultimately, mitigated.
Future Research
Despite the modest sample size of this study, the information presented regarding
the financial components of online programs at these particular institutions warrant
consideration; particularly from institutions seeking to launch online programs of their
own. However, the realm of online education is still relatively novel and future research

FINANCIAL STABILITY IN ONLINE EDUCATION 117
is needed. After considerable reading of the current literature and evaluating the potential
impact of this study, opportunities for future research exist in several key areas. Mainly,
further attention needs to be given to the specific financial structure of the institution in
question. An institutions’ funding model (e.g., private institution vs. public institution)
impacts how resources are allocated, how programs are funded, and how decisions to
engage certain initiatives are made.
Additionally, the size of the specific program being transitioned or created in the
online space influences the type funding required and the resource allocation necessary to
become financially stable and sustainable. As an example, the seven partner institutions
of this study had online enrollments that ranged from less than 100 students to well over
1,500 students. Clearly, these programs had different needs and goals and therefore
combining them into one recommendation plan may not be the most effective approach.
Lastly, a limitation of this study was that each institution varied considerably in
terms of organization, staffing, academic discipline, financial structure, etc. Therefore,
an interesting development would be to further investigate the same financial concepts
proposed in this study but to a disaggregated sample of institutions; including the specific
SaaS provider being used. Again, the uniqueness of higher education and the
organization, characteristics, and political landscape of each institution should be
considered when organizing the sample population.
Conclusion
Hopefully this study has shown that the concept of being financial stable and
sustainable has taken on greater importance for higher education institutions. The fiscal
principles of stability and sustainability especially apply to online education (Rovai &

FINANCIAL STABILITY IN ONLINE EDUCATION 118
Downey, 2010). The economic potential and alternative revenue stream possibilities for
online education has become the norm in higher education institutions and the result has
been an influx of online and virtual educational offerings (Pittinsky, 2003; Rovai &
Downey, 2010). However, online programs must manage the same general financial
principles (e.g., balancing budgets, forecasting revenues and expenditures, enrollment
projections) as their on-ground counterparts.
Moreover, online programs must also navigate the challenges of a relatively new,
volatile, and non-traditional industry (Allen & Seaman, 2011). In fact, one of the biggest
myths about online programs is that they are less expensive and easier to financially
manage (Darrow, 2010). Thus, the online programs that are unable to successfully adapt
and successfully manage its finances are at risk of not attracting enough students to meet
revenue demands and subsequently fail (Rovai & Downey, 2010).
This study investigated the promising financial practices of seven institutions that
are successfully offering high quality online degree programs and exhibiting financial
stability and sustainability. These promising practices included: valuing the mission of
the institution and its goals for the online program, successfully communicating program
goals, utilizing private sector resources effectively, and allocating personnel
appropriately. Therefore, in order to better understand the rationale for each institution’s
decisions related to its online program finances, this study focused its analysis on the
individual(s) at each partner institution responsible for organizing, funding, and
financially planning the online graduate program. As such, the overarching goal for this
study was to identify what administrators need to know, what skills they need to possess,

FINANCIAL STABILITY IN ONLINE EDUCATION 119
what motivates them to engage in these practices, and what organizational factors
contribute to the overall success of those practices.
The findings of this study highlighted five specific assets and organized them in
terms of the motivation, organizational, and knowledge dimension to which it aligned.
The five assets and their associated recommendations, although very specific and
contextualized, can be simplified to five basic commandments for creating and managing
a financially stable and sustainable online graduate program:
1. Administrators and program directors value and prioritize the institutional vision
for online programs. To ensure that this asset is exemplified, it is recommended to
meet with various institutional leaders in order to establish concrete, challenging,
attainable, and measurable goals for the online program on an annual basis.
2. Administrators and program directors are willing to take calculated risks. To
ensure that this asset is exemplified, it is recommended to provide credible,
relevant, and relatable models for how financial success is being defined such as
multidimensional graphics that assist in communicating financial relationships.
3. The partner institution should possess a healthy culture of competition and
continuous improvement. To ensure that this asset is exemplified, it is
recommended that management be involved and invested throughout the online
program’s improvement process. To do this, institutional leadership should
identify and hire program administrators with specific knowledge, skill, and
experience within higher education and empower those individuals to lead and
foster a growth-mindset culture.

FINANCIAL STABILITY IN ONLINE EDUCATION 120
4. Administrators and program directors need to possess a knowledge and
understanding of financial principles in the context of higher education. To
ensure that this asset is exemplified, it is recommended to create a training
program for administrators and program directors engaged in launching an online
graduate program. The training would address comprehension of basic financial
principles, their application to higher education, and the connections of the
individuals’ prior experience.
5. Administrators and program directors need to know how to communicate
complex financial issues to their constituents. To ensure that this asset is
exemplified, it is recommended to incorporate job aids to assist in simplifying
financial principles and in communicating the rationale for certain decisions
related to financial management.
By identifying the knowledge, motivation, and organizational assets that
contribute to a financially stable and sustainable online graduate program and proposing
recommendations for achieving those assets, this study hopes to benefit other institutions
wishing to design a financially viable online program of their own. Online education is a
budding realm of higher education that necessitates further inquiry and research.
However, this study, and its counterparts, provides a blueprint for how online graduate
programs can be leveraged for the academic and administrative betterment of the
institution.

FINANCIAL STABILITY IN ONLINE EDUCATION 121
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Appendix A
Sample Survey

Name of Interviewee: ______________________________________________________
Title: ___________________________________________________________________
Institution: ______________________________________________________________
Length of Employment at Current Institution: ___________________________________
Length of Employment in Current Position: ____________________________________
Survey Questions
Multiple Choice, Yes/No Questions & Likert Scale
1. Was financial stability and long-term financial sustainability a priority for you
during the decision-making process for launching an online graduate program?

2. Before launching the online graduate program, were you comfortable with the
issues related to financial management in higher education?

3. Before launching the online graduate program, were you comfortable with the
issues related to financial management in higher education?

4. Please rank your comfort level with the following issues related to financial
management in higher education: budgeting, revenue & expense projection,
resource allocation, cost-sharing.

5. Please rank your level of fear and anxiety before deciding to launch the online
graduate program.

FINANCIAL STABILITY IN ONLINE EDUCATION 133

6. Please rank your level of fear and anxiety during the initial phase of the program.

7. What was your biggest expense when launching the online graduate program?
LMS, staffing, other personnel, loan repayment, training, other.

8. Please rank the level importance that online degree programming has in the
overall mission and vision of the institution.

9. Please rank the importance level of revenue generation when determining whether
or not to launch an online graduate program.

10. Do you think that your institution chose to launch an online degree program as a
means of competing with other graduate programs in a similar course of study?

11. Did regional or national rankings influence that decision?

12. Do you think that your institution fosters a culture of continuous improvement?

13. What factors are the most important when launching an online degree program?
Initial funding, faculty support, proper resource allocation, other.

FINANCIAL STABILITY IN ONLINE EDUCATION 134
Appendix B
Interview Protocol

Name of Interviewee: ______________________________________________________
Title: ___________________________________________________________________
Date: _________________________________ Location: _____________________
Time Start: ____________________________ Time End: _____________________
Introduction & Opening Statement
• Thank interviewee for participation
• Purpose of the study
o To identify the knowledge and skills an administrator needs to
create and manage a financially stable and sustainable online
graduate program, determine if the administrators are displaying
those factors, uncover the motivational forces influencing those
determinations, and establish the organizational structures that are
most conducive to allowing these behaviors
o To better understand the role of private sector partnerships in
online education
o Input of participants will assist in determining a financial best
practices guide for institutions that are seeking to launch online
graduate programs
• Investigator motive & interest
o Fulfillment of doctoral requirements for dissertation at USC

FINANCIAL STABILITY IN ONLINE EDUCATION 135
o Interested in the challenges that higher education administrators
face with regards to finance; particularly with innovative and
developmental programming
• Protection and confidentiality of responses and participation is
guaranteed
• Voluntary participant - Can discontinue participation at any point in
time…
• Explain the use of data and how individuals will access the findings
• Ask for permission to record interview in order to accurately transcribe
answers
• Approximate length of interview will be 30 minutes
Research Questions
Guiding Research Questions:
1. What knowledge and skills do administrators need to create and manage a financially
stable and sustainable online graduate program?

2. What are the motivational factors that influence whether or not an administrator
displays and engages in the knowledge and skill factors needed to create and manage a
financially stable and sustainable online graduate program?

3. What are the organizational structures that are most conducive to allowing those
behaviors?

Interview Questions
14. How do you define “financial stability?” How do you define “financial
sustainability?”
Response from Interviewee:

FINANCIAL STABILITY IN ONLINE EDUCATION 136

15. Explain your experience and comfort level of financially managing academic
programs, specifically online programs.
Response from Interviewee:

16. Explain your understanding, experience, and comfort level with the various
technologies required for online learning.
Response from Interviewee:

17. Explain you’re your mental thought processes for how and why certain financial
determinations are made relative to creating and managing an online degree program.
Response from Interviewee:

18. Ultimately, why did your institution choose to launch an online degree program?
What factors contributed to that determination?
Response from Interviewee:
19. How do institutional competition and regional/national rankings influence these
types of decisions?
Response from Interviewee:

FINANCIAL STABILITY IN ONLINE EDUCATION 137
20. What were your biggest fears and/or hesitations about launching an online degree
program? If none, why were you so confident?
Response from Interviewee:

21. Once your institution decided to launch the online degree program, how were
finances allocated both internally and externally? Can you elaborate on the role
of the SaaS and the cost-sharing process?
Response from Interviewee:

22. Once your institution decided to launch the online degree program, how did you
communicate the logistical and technological operations of the software to your
constituents?
Response from Interviewee:

23. What role did the institutional vision and mission have on this communication
strategy? How were you able to create faculty buy-in and support of the
transition? If this was not a challenge, why? If it was a challenge, why?
Response from Interviewee:

FINANCIAL STABILITY IN ONLINE EDUCATION 138
24. Were there any institutions, standards, or programs that you used as a benchmark
for financial success when launching and managing the online degree program?
Response from Interviewee:

25. What do you know now that you wish you knew before you launched the program
(or when you first started working with online degree programs)?
Response from Interviewee:

26. What advice would you give to a colleague at a peer institution who was seeking
to launch an online degree program with regards to financial stability and
sustainability?
Response from Interviewee:

Reflection by Interviewer
• Was there any question(s) that I did not ask that you would like to answer?

• Field any questions from the interviewee and allow for any feedback
• Reassure confidentiality
• Permission to follow-up for clarification (email, phone, video conference)
• Explanation of timeline and use of data
• Thank you to interviewee for time and participation

Abstract (if available)

Abstract The economic potential of distance education and academic globalization has piqued the interest of the higher education community (Rovai & Downey, 2010). The result has been an influx of online programs (Pittinsky, 2003). One of the biggest myths about online programs is that they are less expensive and easier to financially manage (Darrow, 2010). This study investigated the promising financial practices of administrators at seven institutions that are offering high quality online programs and exhibiting financial stability and sustainability. These promising practices included: valuing the mission of the institution and its goals for the online program, successfully communicating program goals, utilizing private sector resources effectively, and allocating personnel appropriately. The findings of this study highlighted five specific assets and organized them using Clark and Estes’ (2008) gap analysis model in terms of the Knowledge, Motivation, or Organizational dimension to which they aligned. The overarching goal for this study was to identify what administrators need to know, what skills they need to possess, what motivates them to engage in these practices, and what organizational factors contribute to the overall success of those practices. By identifying the assets that contribute to a financially stable and sustainable online program and proposing recommendations for achieving those assets, this study benefits other institutions wishing to design a financially viable online program of their own.

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Asset Metadata

Creator Waterstone, Kyle (author)

Core Title Financial stability and sustainability in online education: a study of promising practice

School Rossier School of Education

Degree Doctor of Education

Degree Program Education (Leadership)

Publication Date 06/17/2016

Defense Date 03/10/2016

Publisher University of Southern California (original), University of Southern California. Libraries (digital)

Tag administrator,financial,gap analysis,Higher education,Knowledge,Motivation,OAI-PMH Harvest,online,organizational,SaaS,stability,sustainability

Format application/pdf (imt)

Language English

Contributor Electronically uploaded by the author (provenance)

Advisor Sundt, Melora (committee chair), Ephraim, Ronni (committee member), Filback, Robert (committee member)

Creator Email kyle.waterstone@gmail.com,watersto@usc.edu

Permanent Link (DOI) https://doi.org/10.25549/usctheses-c40-254434

Unique identifier UC11280638

Identifier etd-Waterstone-4445.pdf (filename),usctheses-c40-254434 (legacy record id)

Legacy Identifier etd-Waterstone-4445-1.pdf

Dmrecord 254434

Document Type Dissertation

Format application/pdf (imt)

Rights Waterstone, Kyle

Type texts

Source University of Southern California (contributing entity), University of Southern California Dissertations and Theses (collection)

Access Conditions The author retains rights to his/her dissertation, thesis or other graduate work according to U.S. copyright law. Electronic access is being provided by the USC Libraries in agreement with the a...

Repository Name University of Southern California Digital Library

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