| Summary: | The developed economies are now considered to be entering the growth phase of knowledge-based economic activity. The universities are increasingly seen as a critical vehicle for knowledge creation and knowledge transfer in order to produce educated citizens that will facilitate economic growth. The secondary data on the pressures facing universities suggest that the universities need to be more competitive, flexible and efficient. Empirical data was collected from a series of student expectations and satisfactions surveys at one of the Scottish universities. Analysis of these suggests that generally students seem to demand for a wider option of delivery from the university. The students broadly do not seem to be content with massification of higher education that includes distance learning delivery. This raises a potential conflict with regard to culture in that the culture that best facilitates the students' acceptance of massification of higher education will include distance learning delivery. Therefore, this research has been conducted to explore and determine the current, future and desired culture of three Scottish universities. This research also determined how culture in these three Scottish universities may be structured to best meet the future requirements of knowledge-based economies. The Organisational Culture Assessment Instrument (OCAI) developed by Cameron and Quinn was used to measure the current, future and desired culture in Scottish universities. From the OCAI, it would appear that the staff in these three universities consider the current culture to be a Hierarchy culture and that a Market culture will be emphasised in future in universities. The Delphi study also indicates that if a market driven culture can be developed then universities can exploit new knowledge in the economy in which they reside and this will enhance their international competitiveness. Thus, in the future, a Market culture will develop in universities that place emphasis on customer requirements and winning in the market place. However, the focus on a Market culture will be achieved by emphasising broadly on the large numbers of standardised procedures, rules and policies governing what people do, and which are strongly associated with "resistance to change", which is often confused with critical questioning of strategy. However, the desired culture is the collegiate culture (Clan culture) with a focus on ongoing commitment to excellence, increased flexibility, staff empowerment and cross-functional teamwork. This raises a potential conflict in higher education environments. The Delphi study indicates that other stakeholders in higher education want universities to stimulate greater success in knowledge creation and knowledge transfer activities. The universities are expected to increase their economic contribution through collaboration. Scottish higher education should build upon its strength by addressing it weaknesses in order to realise its opportunities and avoid threats. Effective leadership and management are essential in universities. This intensifies the need for a desired culture that can best facilitate the development of universities in the future. Therefore, to address the two conflicts in the higher education environment and to best facilitate the development of universities in the future, it is proposed that there is a need for universities to devise flexible strategies to engage stakeholders to identify issues, propose solutions, and become partners in implementing the changes needed. The universities should cultivate a Clan culture to better facilitate knowledge creation and knowledge transfer activities, and consequently become more customer focused with regard to the likely future expectations from students in terms of programme provision, teaching methods and the whole experience as a student. To facilitate this, it is proposed that tools such as European Foundation Quality Management (EFQM) model could be used to focus activities.
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