A Novel Green Ocean Strategy for Financial Sustainability (GOSFS) in Higher Education Institutions: King Abdulaziz University as a Case Study

Abstract

Financing education has recently been a big concern since educational expenditure continues to rise. As a result, there will be a gradual shift away from the “unilateral approach” to funding and toward the “diversification of financing resources”. The aim of this paper is to propose an innovative strategy plan to optimize universities’ investment sources and maintain their financial sustainability. This approach was known as the Green Ocean Strategy for Financial Sustainability (GOSFS). To effectively implement GOSFS in higher education institutions, a roadmap of 18 steps is constructed around three primary key performance areas (resource development, good governance, and regulations and legislation). The GOSFS was applied within four successive stages at King Abdulaziz University as a case study. With 18 pillars found under these three key performance areas, a long-term target for 2045 and an overall goal for 2025 were defined. In addition, the paper created novel versions of the Business Model Canvas to meet the GOSFS plan concept. To effectively employ GOSFS, four recommendations are offered to accelerate business growth and engage the university investment ecosystem, including whether to invest in highly qualified human capital, expand financial resources, or leverage technical resources. Future directions are also provided.

1. Introduction

Although universities are typically at the forefront of scientific research and offer advanced training in all societies, the political factors or economic and cultural standards that exist in different geographic regions cause a significant disparity between universities in different parts of the world and even in the same country. Most universities not only offer classes in subjects such as physical education, social sciences, law, and humanities, but also courses in the natural sciences, engineering, architecture, and medicine. They also offer extra services to the student body, such as dining halls, bookstores, and job placement offices. In addition to these amenities, most colleges have libraries, sports activities, dining facilities, student unions, gardens, astronomical observatories, medical facilities, computer centers, research labs, and incubators for startups.

Universities generally witnessed a great recovery after the Second World War until the end of the seventh decade of the last century as a result of the great demand for them. This is due to several reasons, including the availability of rewarding job opportunities for university graduates, free education in some countries, the increase in government scholarship opportunities abroad, and the increase in demand for university education. Based on this, the number of universities increased at a rapid rate all over the world until the number of universities in the United States of America reached 3736 universities in the year 2021 [1]. Recently, in the years 2020 and 2022, higher education around the world confronted significant changes as a result of the COVID-19 pandemic and the Russia–Ukraine war, respectively [2,3,4,5,6,7,8,9,10,11]. Due to the global epidemic, the year 2020 has signaled economic and social transformations that will define the coming decade in education [12,13]. On the other hand, the war that started on the 24th of February 2022 has affected not only Ukrainian and Russian students who are studying abroad but also foreign students in Ukraine and Russia. In addition, the global disruptions in the petroleum market will impact the total budget allocated for higher education by the governments.

The Kingdom of Saudi Arabia (KSA) has already chosen the upcoming decade as the critical window for achieving Saudi Vision 2030 and the 2030 Agenda goals [13,14,15]. The vision is about transitioning the Saudi economy away from the over-reliance on oil revenues to a more balanced, investment-based model. With respect to the higher education sector, Vision 2030 of the Kingdom of Saudi Arabia looks to (1) attract and retain the finest Saudi and foreign minds and provide them with all they need to contribute to the kingdom’s economic development and attract additional foreign investment, (2) improve and reform regulations, paving the way for investors and the private sector to acquire and deliver services—such as education—that are currently provided by the public sector, and (3) shift the government’s role from providing services to one that focuses on regulating and monitoring them, and we will build the capability to monitor this transition [16,17]. This is besides attaining quality assurance, quality assessment, and world rankings among Saudi higher education institutions [18,19]. In light of Saudi Vision 2030, the Saudi government is working hard to transform public higher education institutions from entities that depend entirely on government funding to produce educational organizations with multiple financial sources. In 2019, the New Universities Law was issued to cover 30 public universities in Saudi Arabia [20]. However, it is currently being used by three of the largest public universities, with a total student population of approximately 1.4 million students in 2019. They are King Saud University in Riyadh, King Abdulaziz University in Jeddah, and Imam Abdulrahman bin Faisal University, in Dammam. The New Universities Law specifically strives to foster greater academic, administrative, and financial independence for universities.

1.1. Background Information on the New Universities Law in Saudi Arabia

Saudi universities depend on government funding, and they cut a significant part of the state’s budget. Moreover, this funding and its continuity are dependent on changes in oil prices, whose revenues happen to constitute the largest part of the government’s budget. In case the government cuts its funding for universities for any reason, this will have a negative reflection on the universities’ role in contributing to economic and social development, which could possibly weaken educational outputs. On top of the financial resources allocated to university education from the government’s general budget, Saudi universities also rely on some additional sources such as grants, donations, student fees, local and foreign aid, or consultative and contractual research and its effective management. That is to be carried out in order to achieve the university’s educational goals during a specific period of time.

In light of economic changes worldwide, funding university education in Saudi Arabia cannot continue to depend on government funding as its main source. Therefore, the dependence of Saudi public universities on state sponsorship and financing to deliver their educational programs and implement their plans must be reconsidered, especially given that the government’s orientation now is to rationalize its spending in various areas, including funding tertiary education. As a result, the issue of financial sustainability in higher education is a major issue facing higher education leadership in KSA. That is because funding tertiary education has become a major burden on taxpayers and on the government’s budget. This is exactly what KSA’s Vision 2030 calls for in terms of diversifying sources of funding for higher education and managing financial resources efficiently and effectively.

This is why the Saudi Ministry of Education issued the New Universities Law, with the aim of organizing Saudi universities, guiding their policies, and setting their executive laws and regulations. This new law offers public universities in KSA the opportunity to achieve disciplined independence so that they can construct their own academic, financial, and administrative regulations in accordance with general policies approved by the government through the formed University Affairs Council.

The new law helps reduce the operational costs of universities and will push them to find new sources of funding, reducing their full dependence on government funds. This is through asset management programs and through allowing universities to establish investment companies to develop their own financial resources. According to Articles 49 and 50, the new law also gives universities the right to receive financial compensation for their services in various ways, such as charging tuition fees for postgraduate programs, diplomas, training and educational courses, undergraduate programs for non-Saudi students, along with charging fees for scientific research or consulting services, and for opening branches abroad [21]. The new law will help apply the pillars of the KSA’s Vision 2030 in terms of applying privatization principles in the management and operation of higher education institutions. The law will also lead to optimizing the utilization of human, academic, and administrative resources in higher education institutions.

1.2. About King Abdulaziz University (KAU)

King Abdulaziz University (KAU) is the largest public university in Saudi Arabia, with over 117,096 students in 2022 and 24 faculties; 15 of these are located on campus, and 9 are off campus. KAU is located in south Jeddah and is considered the city’s center for teaching and research. KAU offers some courses that are not available at any other universities in Saudi Arabia, such as marine science, meteorology, and astronomy. It was established in 1967 as a private university by a group of businessmen and converted in 1974 to a public university by a decision of the Saudi Cabinet under King Faisal’s orders. In terms of enrollment and the variety of academic programs, KAU has also witnessed enormous quantitative and qualitative improvement. It is now recognized as a world-class prestigious university brought about by its international outreach and collaboration in research, innovation, accreditations, and rankings. It does this while continuing to maintain its traditional commitment to delivering outstanding education and community service. The university maintained its Arab leadership in international rankings, as it ranked first in the Arab world by the Times Higher Education Index and British QS Classification Index for the third time in a row. Additionally, it is placed 106 in the QS world university rankings for 2023 and 101–150 in the Shanghai International Classifications list of the world’s top institutions.

1.3. KAU’s Transformation Plan to the New Universities Law

Many academic, research, administrative, and financial components of KAU must undergo a fundamental shift as a result of the decision to provide universities with disciplined independence. In order to prepare for administrative and financial independence, it also necessitates an examination of academic and educational changes and their future reading, both locally and worldwide. As a result, KAU must implement numerous internal strategic reforms in order to become a university institution that is better equipped to tackle upcoming problems. With the following goals in mind, KAU created a transformation plan for the New Universities Law:

• Achieving the goals of the Kingdom’s Vision 2030;
• Investing the university’s own resources and finding new sources of funding;
• Enhancing the competitive value of the university locally and globally;
• Harmonization of its educational outputs with the labor market;
• Achieving the selection of leaders on the basis of competence;
• Improve operational effectiveness and waste reduction;
• Achieving the optimal investment of human resources in the university.

There are numerous theories of sustainable finance that promote sustainable development in a variety of areas, including the social, environmental, and economic elements [22]. In this paper, long-term sustainable finance for higher education is considered. Therefore, the administrative, academic, financial, and spending rationalization, investment, and governance structures have been the pivots of the transformation strategy. With respect to investment structure and in order to obtain the largest revenue for the university and the best outcomes for the community, KAU innovated a strategic plan to maximize its investment sources and maintain its financial sustainability. Green Ocean Strategy for Financial Sustainability (GOSFS) is the name of this strategic plan. Consequently, the following question will be answered in this paper:

“How could KAU maximize its investment sources and maintain its financial sustainability?”

The rest of the paper is organized as follows: The ongoing research of the strategic plan theories are covered in Section 2. The structure of the innovative Green Ocean Strategy for Higher Education’s Financial Sustainability is described in Section 3. The case study from KAU together with the implementation requirements for the proposed strategy are presented in Section 4, and the conclusions are presented in Section 5.

2. Literature Review

Strategic planning is a blueprint for the entire organization, including all actions that result in a distinct mission, goals and objectives, and strategies [23]. At the end, it aids in the organization’s ability to adapt to environmental changes and consistently make gains in productivity. Top-level executive managers implement a range of strategic planning models in organizations. The famous strategies are the Red Ocean Strategy [24,25], Blue Ocean Strategy [26,27,28], and Green Ocean Strategy [29,30,31,32]. The Red Ocean Strategy encourages competition in already-existing markets, the Blue Ocean Strategy encourages the creation of new uncontested markets, and the Green Ocean Strategy encourages the consideration of the effects of environmental footprint on human lives. In addition to these planning strategies, Aithal and Kumar [33] created the Black Ocean Strategy as a type of survival technique to solve organizational issues right away. For organizational survival, sustainability, and profit, Aithal [34] described the White Ocean Strategy as a combination of the Red Ocean, Blue Ocean, Green Ocean, and Black Ocean strategies. Scarlat and Panduru [35] began a study with a focus on the metaphorical ocean color of the contemporary competitive market, describing it as neither red nor blue but rather a type of Purple Ocean instead. The Pink Ocean Strategy is a concept developed by Evangelos et al. [36] to support innovative activities in response to pressing issues, including cares about human life and climate change.

In contrast, higher education institutions strive to close any intellectual gaps in all economic sectors; therefore, the caliber of services and education they provide is essential. All management and financial aspects of the educational institution’s administration must be successful and effective [37]. As a result, higher education institutions worldwide strive for excellence in research, education, and community service, which serve as the foundation for their strategic objectives [38,39,40,41,42]. Here, the first review in this literature will be the Blue Ocean and Green Ocean strategic planning models for higher education institutions. Next, the topic of higher education’s financial sustainability will be covered.

2.1. Blue Ocean Market Theory Applications in Higher Education

Bragance [43] stated the question, "How can we move academia towards a ‘blue ocean’ scenario?” He presented some Blue Ocean approaches in response to this query, including (1) the community’s access to Massive Open Online Courses (MOOCs) for free, yet further content followed by instructor counseling and supervision is made available for a fee, (2) strong partnership between the university and companies to learn what they want students to know before entering the future job market, (3) it is important for industry representatives to be involved in curriculum development, and (4) there should be an additional contribution from the industry by delivering free master classes and being proactive in curricular internships since this will provide them a chance to network with potential future employees. Aguirre Fernández Bravo and Guindal Pintado [44] introduced a classroom toolkit based on the Blue Ocean Strategy for training higher education students in entrepreneurial abilities. They developed their suggested strategy using the flipped learning teaching model. Hazmira and Wicaksono [45] concluded that Indonesia’s higher education system is mainly controlled by the state sector and has a stringent admissions standard. However, if a private, non-profit higher education institution has or can discover its sustainable competitive advantages, it can employ the Blue Ocean business strategy for its new competitors to overcome the challenges of limited resources, a high entry barrier, and intense competition. Abdalla [46] created a proposed vision for the use of the Blue Ocean Strategy that emphasizes the necessity for the administration of postgraduate studies in Egyptian faculties of education to carry out a process of development, including its objectives, curricula, and evaluation methods to meet changing demands and societal aspirations and in pursuit of competitive advantage, benefiting from its qualified human elements to ensure the achievement of the proposed vision.

2.2. Green Ocean Market Theory Applications in Higher Education

Green Ocean strategies feature sustainability and advantages to the environment and climatic change [47,48,49,50,51]. Based on this feature, Smyth et al. [52] offered tools and techniques that can be used to evaluate the sustainability of a university waste management system. Their case study was carried out at the University of Northern British Columbia’s Prince George campus (UNBC). In the literature, some scholars have referred to the implementation of Green Ocean initiatives in higher education as “Green Education” [53,54]. Aithal and Rao [53] examined the opportunities and challenges of moving toward green education. They developed a Green Ocean model for higher education with three key components: building professional postgraduates as decision makers, graduating students with skills needed in the industry, and developing education continuously. Abu-Eisheh and Hijazi [55] developed a Green Ocean strategic plan for An-Najah National University in Palestine. The plan stated that the new science and technology campus would be transformed into a “Smart”, “Eco”, and “Green” built environment. According to Sisriany and Fatimah [56], a “Green Campus” is a concept used to create ecologically friendly, sustainable living practices in educational institutions. To identify and assess the sustainability of IPB University Campus in Bogor, Indonesia, they used 10 green campus criteria (energy, carbon and climate change, water, waste, biodiversity and ecosystem services, planning design and development, procurement, green office, green lab, green IT, and transport) from the United Nations Environment Program. A study was conducted by Leal Filho et al. [57] on the green and sustainability offices that tangibly support the efforts of pursuing and implementing sustainable development goals on campus, found in a sample of 70 higher education institutions from around the world. According to their study, the higher education senior management must make more of an effort to provide these offices with additional human and financial resources, so they can function effectively and meet institutional sustainability goals. According to Tariq et al. [58], who used a statistical method, green activities at Pakistani higher education institutions had a favorable effect on students’ attitudes toward environmental concerns.

2.3. Financial Sustainability Applications in Higher Education

Afriyie [59] stated, “To achieve financial sustainability of higher education, institutions need to maintain or increase internally generated funds that are regular, without future compromises”. For the purpose of forecasting the financial sustainability of higher education institutions, Afriyie created a mathematical model based on three variables: authentic leadership, public relations, and investment portfolio. Sazonov et al. [60] proposed a methodology to define and assess the financial sustainability of higher education institutions. As a result of this methodology, institutions must focus on the following tasks: increasing the independency of higher education institutions and the flexibility of their management structure; enhancing the effectiveness of their collaboration with private businesses; and enhancing the effectiveness of their educational services to the community. Economic and statistical analysis was suggested by Cernostana [61] to assess the financial sustainability of Latvia’s private higher education sector. The research is based on financial ratios for private institutions of higher education, including liquidity, activity, financial stability, and profitability ratios. The findings revealed that several private universities are in financial jeopardy and are unable to assure students of a top-notch education in the coming years. In 2021, Kuzmina [62] did another analysis of the financial viability of the private higher education business in Latvia. The following findings have been reached by the author: Today’s higher education administration is becoming more complex, necessitating the use of extra instruments to ensure long-term financial stability. The strategic plans for the financial sustainability of 50 Canadian higher education institutions were investigated by Bieler and McKenzie [63]. Their main objective was to determine the extent to which sustainability is seen as a significant policy priority in the plans. It has been found that there is a disconnect between strategic planning and sustainability policy activities at 35% of the institutions. These activities included governance, education, campus operations, research, and community engagement. At the University of Kufa, Iraq, over the three years 2015–2017, Almagtome et al. [64] proposed a theoretical model to describe the relationship between financial sustainability and accountability function. The model in use is based on content analysis of financial data and semi-structured interviews. They concluded that the university could not continue to operate as a financially independent institution without assistance from the government. Montenegro de Lima et al. [65] reported a literature review on sustainability funding in higher education and an examination of the theoretical influence on scholarly research based on 745 papers published in international journals between 1994 and 2018. They ultimately clustered the themes under investigation into five groups, including sustainability skills, campus greening, co-creation and information transfer, sustainability science, and sustainability in university courses and curricula.

The literature review showed initiatives being made by institutions of higher education in various countries over the world to use the Blue Ocean and Green Ocean strategies as well as financial sustainability techniques. In general, it can be said that higher education institutions changed in the 19th and 20th centuries to accommodate the requirements of the industrial economy. They underwent yet another change in the 21st century, this time to meet the requirements of the knowledge economy and maintain their financial sustainability within economic changes. In order to meet the needs of the knowledge economy, Saudi Arabia launched the “Fiscal Sustainability Program” [66] and the “Privatization Program” [67] in 2016 and 2018, respectively.

3. The Roadmap for Green Ocean Strategy for Financial Sustainability

The ability of the university to achieve a favorable financial status while maintaining its capacity to sustain such a situation in the future is referred to as financial sustainability in higher education. This can be performed through the university’s internal and external development, rationalization, and investment activities and practices in several areas of the educational system and the area of financing in particular. This will make it possible for the university to continue working toward achieving its objectives in an efficient and effective manner. This will increase its ability to compete and attain excellence. The steps of the proposed roadmap for implementing the Green Ocean Strategy for Financial Sustainability (GOSFS) in higher education institutions (universities) are shown in Figure 1.

The 18 steps of the proposed GOSFS are as follows:

Step 1:

  The strategies and resources used to attain financial sustainability differ widely depending on the conditions and goals of each university as well as the characteristics of the community in which the university is located and the forces and influences that shape that community. Due to this, it is important to start the roadmap of GOSFS with a review of successful experiences and practices in the financial sustainability of higher education institutions.

Step 2:

  The university must create a long-term financial objective for at least 20 years as well as an overall target for the next five years in order to guarantee the continued feasibility of providing its finances. This process involves collaboration between the strategic, academic, and financial professionals from the university administration.

Step 3:

  As government funding for universities declines, universities increasingly should rely on other funding sources to further their missions and keep the level of education and services they offer. The current sources of the university’s income will be looked at in this step of the roadmap, such as tuition, grants and contracts, endowment, investment income, and others.

Step 4:

  This step finds the gap between the financial strategic objective set in Step 1 above and the current revenue the university could obtain from the funding sources examined in Step 2. Meetings, brainstorming sessions, forums, and workshops are all different ways to obtain the necessary analysis.

Step 5:

  Here, the climate for university investment will be studied. In order to improve operations and maximize the use of the university’s resources, this study outlines the most significant investment opportunities, challenges associated with implementing each opportunity, and suggested mechanisms for rationalizing spending and rearranging approved costs and financial liquidity.

Step 6:

  The sources of the university’s predicted internal financial capacity in several areas, including teaching and learning, scientific research, human capital, and endowments and donations, are positive affirmations of this step. In addition, it is necessary to look at the sources of the university’s external financial capacity, including the university’s expertise in marketing, the expansion of partnerships, and the promotion of community involvement and leadership. Finally, it is advised that this step of the roadmap takes into mind the challenges confronting achieving financial sustainability for the university.

Step 7:

  Based on the strategic planning approach of Al-Filali [68], formulate the specified objectives for the university’s financial capacity and perform a SWOT analysis for each objective. A patent held by Al-Filali offers a remedy for problems with various systems for strategic planning and performance management. Once overall strategies have been defined, the logic model is employed for the development of details of individual programs, including performance indicators. Here, in this step, instead of conducting the SWOT analysis of the organization followed by the necessary specific objectives, the objectives are created first, then SWOT analysis is conducted for each one.

Step 8:

  Three interconnected key performance areas (KPAs) serve as the cornerstone of the proposed GOSFS. The first KPA is covered, in this step of the roadmap, under the heading “Resource Development” in a number of pillars that stand in various areas of the financial capacity discovered in Step 6 above. Determine the specific objectives for each pillar and perform a SWOT analysis for each one.

Step 9:

  This step addresses the second KPA under the heading “Good Governess”, such as restructuring the administrative and financial systems and structuring job grads. Establish the specific objectives associated with this KPA’s foundational principles and conduct a SWOT analysis for each objective.

Step 10:

 This step relates to the third KPA, “Regulations & Legislation”, which deals with creating systems to promote the internal and external environments as well as creating mechanisms to support environmental sustainability. Determine the specific objectives connected to this KPA’s pillars and conduct a SWOT analysis for each objective.

Step 11:

 For each KPA listed in Steps 8, 9, and 10 above, create the executive initiatives followed by the business model, balanced scorecard (BSC), and strategy map for each initiative.

Step 12:

 Here, construct the executive plan for each objective considered in the three KPAs mentioned in Steps 8, 9, and 10. Using performance indicators for each objective, this executive plan demonstrates how each objective should be accomplished.

Step 13:

 The university’s key administrative entities will obtain the executive plan’s results. Each strategic unit will be given objectives, initiatives, and performance indicators depending on the unit’s primary duties. It is advised that the administrative, academic, educational, and research units must obtain the assignment.

Step 14:

 The GOSFS is put into action in this step. This implies that each strategic unit must specify the requirements for putting initiatives into action in order to meet performance indicators. Additionally, it must outline the steps for putting each initiative into action, specify the time frame, and the people in charge of each step.

Step 15:

 This step focuses on the University’s Investment Potential Media Publication (articles, interviews, etc.). It leads to a media communication (MC) plan for the investment options for the university that were mentioned in Step 8 above. It is beneficial to create a database that includes investment opportunities in the university with all its data (classification, location, area, usufruct, nature of usufruct, rental value/allocated, etc.). In addition, preparing an interactive website with an attractive design.

Step 16:

 Start the GOSFS and MC plans’ follow-up plans. Building relationships and trust with all university units involved in the GOSFS implementation via various communication platforms is crucial to the success of this approach. Without this exchange of information, the plan might not work. Therefore, it is possible to follow up with the strategic units found in Step 14 using visits, emails, reports, automated progress dashboards, and other techniques.

Step 17:

 Here, calculate the percentage of achievement of each initiative based on the corresponding performance indicators as well as the percentage of achievement from the overall strategic goal of the GOSFS plan that was approved in Step 2.

Step 18:

 Results from Steps 16 and 17 must be transformed into periodic reports (every three or six months and annually). The reports must detail the accomplishments and challenges that the strategic units faced in achieving the desired percentages, along with suggestions for how to overcome those challenges.

In order to complete the steps of the GOSFS plan’s road map, as depicted in Figure 1, participation from the university’s administration (strategic, academic, legality, and financial units), an entity from the university (green office), a chosen team of university faculty members, and university stakeholders is required.

4. An Application of the GOSFS Plan at KAU

King Abdulaziz University (KAU) strived with all its energies and capabilities toward developing consecutive strategic development plans, with which it charts its path toward its desired future. It prepared its first strategic plan (2005–2010) with the slogan “expansion and quality”, its second strategic plan (2011–2015) with the focus on “development and leadership”, its third strategic plan (2016–2021) with the slogan “enhancement” on achieving “globalization and sustainability”, and its current fourth strategic plan (2022–2025) with the name “Ambition” toward “Innovation and Prosperity” [68,69]. In order to strengthen the university’s ambitious plan, achieve the Kingdom’s Vision for 2030, and maximize its financial resources while adhering to the requirements of the New Universities Law, the administration of KAU decided to apply the roadmap of GOSFS. Through this roadmap, the administration seeks to develop its own resources and achieve expenditure efficiency. Accordingly, the university held a series of meetups, workshops, and brainstorming sessions to formulate its long-term goal up to the year 2045, as well as a strategic financial sustainability plan for the period from 2022 up to the end of 2025. The topics covered in three major events held at the university with involvement from a group of businessmen and faculty members are shown in

Table 1. Content of three KAU events in relation to the GOSFS plan.

Event #1 (20 October 2020)—60 participants “Developing the Investment Environment at KAU”
Session #1:	The most important investment opportunities in the university Challenges facing the implementation of such opportunities and proposed solutions
Session #2:	Suggested mechanisms to rationalize expenditures and rearrange approved costs and liquidity in order to ensure better operation and optimal utilization of available resources at KAU
Event #2 (2 December 2020)—33 participants “The First Financial Sustainability Forum in Light of the New Universities Law”
Session #1:	Sources of the university’s current projected internal financial capacity Aspects of the university’s current external financial capacity Challenges in the way of achieving financial sustainability in the university
Session #2:	Applying the Business Model Canvas framework on the university’s projected sources of internal financial capacity, which specifies for each investment opportunity the following: (1) target customer segment, (2) value proposition, (3) communication channels, (4) customer relationships, (5) revenue streams, (6) key resources, (7) key activities, (8) key relationships, and (9) cost structure
Event #3 (15 March 2021)—71 participants “The Second Financial Sustainability Forum in Light of the New Universities Law”
Session #1:	Suggesting a formulation for the specified goals for each of the financial sustainability areas in the university
Session #2:	Conducting a SWOT (Strength, Weakness, Opportunity, Thread) analysis on the pillars of the financial sustainability plan

.

4.1. Establishment of Financial Sustainability Office

Financial sustainability aims to help KAU be able to continue achieving its mission in the long term by the optimal investment of its resources and in-kind and intellectual assets and its development programs through diversifying its income resources, allocating or investing some of its facilities and services, and working on efficient spending. From this standpoint, the Financial Sustainability Office (FSO) has been established to be the house of expertise in influencing and interacting positively with the changes and transformations at the financial and economic level in the university to achieve structural reforms that keep pace with the requirements of developing its financial resources and achieving efficient spending. The FSO is considered one of the strategic units affiliated with the Vice President for Business and Knowledge Creativity (Vice President for Business and Investment), which is concerned with drawing general directions, plans, and initiatives and developing the investment environment and financial sustainability in KAU. The FSO’s mission is to “enable King Abdulaziz University to achieve its financial sustainability with efficient spending, allocation and optimal investment of its human and technical resources, scientific programs, facilities, and infrastructure at the highest international standards”. The objectives of the FSO are as follows:

• Contributing to achieving the Kingdom’s Vision 2030;
• Participating in implementing the New Universities Law to KAU;
• Formulating the KAU’s long- and medium-term financial sustainability plan with clear, comprehensive, and measured performance indicators;
• Proposing the necessary initiatives that achieve the objectives of the financial sustainability plan;
• Following up the accomplishment of the financial sustainability plan at the level of strategic units in the university;
• Strengthening the partnership between the government, private and civil sectors in accordance with Articles 49 and 50 of the New Universities Law;
• Conducting studies and providing consultations in the field of investment and financial sustainability.

4.2. Stages of the KAU-GOSFS

The FSO keens to provide initiatives to develop the university’s resources and interact with external challenges by developing plans to achieve the university’s financial balance and setting up a medium and long-term financial planning mechanism for financial sustainability and achieving a balanced budget. It also seeks to raise the quality of financial planning and develop the directions of the plan to advance to the phase of achieving financial sustainability. As a result, the FSO conducted the following outlines the five stages to apply the roadmap of GOSFS at KAU:

Stage #1:

 Setting the main components of KAU’s financial sustainability plan.

This stage covered Steps 1 through 10 from the roadmap of GOSFS. First, the financial sustainability literature review and successful experiences in higher education institutions were researched. The long-term goal and overall goal of the financial sustainability plan for KAU were then discussed in detail during a panel discussion between representatives of the KAU administration, the FSO, and the scientific team. They used the primary components of the university’s fourth strategic plan and what is given in Articles 49 (university revenues) and 50 (university fees) of the New Universities Law as the basis for writing the long-term goal and overall goal. The gap between the current KAU revenue situation and what is desired has also been examined. In addition, the KAU’s financial capabilities and the challenges it faces in accessing them were considered. Following that, the specific objectives of the university’s financial resources were developed, along with a SWOT analysis of each objective. This led to assign eight pillars to increase its financial resources. This calls for strong governance, which is based on six pillars as well as improved legislation and regulations across four pillars. These 18 pillars present the three key performance areas of financial sustainability for KAU. At the conclusion, the president of KAU approved the long-term goal for the year 2045, the overall goal for the year 2025, and the main components of the financial sustainability plan, as given in Figure 2.

Stage #2:

 Defining the objectives, initiatives, and performance indicators.

Steps 11 through 12 of the GOSFS roadmap were covered in this stage. These steps are concerned with figuring out the specific objectives, initiatives, and performance indicators for the KAU financial sustainability plan. The FOS and the scientific team together identified the specific objectives and performed a SWOT analysis for each objective across the 18 pillars of the three KPAs. Figure 3 displays how the identified objectives are distributed among the perspectives of the revised balanced scorecard. As is common knowledge, the balanced scorecard measures four key perspectives of a business: learning and growth, internal processes, customers, and finance [70]. Another measuring method has been developed by the FOS to fit the KAU financial sustainability strategy. As shown in Figure 3, the method considered the perspectives of good governance, regulations and legislation, resource development, and final outcome.

Following the selection of specific objectives, each objective’s executive initiatives are created. Three different methods were used to examine each initiative to ensure its viability. The “Business Model Canvas” was the first method [71,72,73]. A model is a helpful tool for understanding how a company can make money via nine elements (customer segments, value proposition, revenue streams, channels, customer relationships, key activities, key resources, key partners, and cost structure). The FOS modified the Business Model Canvas for KAU financial sustainability, which involved six elements instead of nine, as shown in Figure 4. The second and third methods were the strategy map and balanced scorecard, respectively, to visualize the components connected to each initiative.

Stage #3:

 Implementing the KAU-GOSFS.

The KAU-GOSFS was put into action in this stage, which concerned with Steps 13 and 14 from the GOSFS roadmap. On the strategic level, the action plan was launched after the performance indicators had been established. Here, the objectives, initiatives, and performance indicators were distributed to the university’s key administrative leaders depending on the principal responsibilities of the unit for which they are affiliated. Hence, these units laid out the steps for implementing each initiative, the detailed requirements (human resources, equipment, money, etc.) for each, and provided a timeline for when each initiative would be achieved.

Stage #4:

 Developing a media communication plan.

This stage is related to Step 15 from the GOSFS roadmap. The KAU presidency and the FSO found that it is essential to create a media communication plan in order to increase the university’s own revenues, invest its endowments, and persuade business owners, organizations, and other sectors to make donations, gifts, grants, bequests, and endowments as well as work to identify sustainable alternative financial resources that the university can use. To draw investors to the investment prospects at KAU, the FSO began to establish a strategic media communication plan. The vision of this strategic plan is “An investment university for sustainable growth with strong governance and community and global partnership”. From this point, the KAU established the Privatization and Investment Program with its sub-committees, whose membership includes businessmen from the private sector and academic leaders at the university. The target is to become self-sufficient by using KAU’s own infrastructure, facilities, and health services. The KAU will achieve financial balance as a result, diversify its financing sources, and lessen its reliance on government assistance. Based on the fourth pillar of the KPA1, which is “improving resources in digital facilities and infrastructure”, the first-year investment plan involved equestrian club investment, white lands investment, investing in a multi-story car parking building for the university hospital, and investing in advertising screens in university buildings and squares. The media used to promote these kinds of investments involved the creation of a database that includes investment opportunities in the university with all its data (classification, location, area, usufruct right, nature of usufruct, rental value/allocated, etc.), an interactive website with an attractive design, and publications such as articles, flyers, brochures as well as interviews with the investors.

Stage #5:

 Following up and evaluating the achievements.

This stage is related to Steps 16 through 18 of the GOSFS roadmap. The financial sustainability plan and the media communication plan are both monitored and assessed every three months with an extensive annual report. The FOS is in charge of evaluating whether the implementation process is in line with what was planned, performing a type of quality assurance that focuses on the actual implementation, determining whether the plan was successful, and checking whether the desired results have been realized. At KAU, tracking the progress of the strategy plans was automated by delivering numerous dashboard types. The FOS has regular meetings with the units in charge of achieving performance indicators to facilitate their work and raise problems they may face in the implementation process to the university’s leaders to resolve them.

5. Conclusions and Recommendations

In light of the economic changes from which the world is suffering at the moment, funding university education in Saudi Arabia cannot continue to depend on government funding as its main source. Therefore, the dependence of Saudi public universities on state sponsorship and financing to deliver their educational programs and implement their plans must be reconsidered, especially given that the government’s orientation now is to rationalize its spending in various areas, including funding tertiary education. Therefore, the issue of financial sustainability in higher education is a major issue facing the higher education leadership in the Kingdom of Saudi Arabia (KSA). That is because funding tertiary education has become a major burden on taxpayers and on the government’s budget. This is exactly what KSA’s Vision 2030 calls for in terms of diversifying sources of funding for higher education and managing financial resources efficiently and effectively. This is why the Saudi Ministry of Education issued the New University Law, with the aim of organizing Saudi universities, guiding their policies, and setting their executive laws and regulations. This new law offers public universities in KSA the opportunity to achieve disciplined independence so that they can construct their own academic, financial, and administrative regulations in accordance with general policies approved by the government through the proposed University Affairs Council. The new law helps reduce the operational costs of universities and pushes them to find new sources of funding, reducing their full dependence on government funds. This is through asset management programs and through allowing universities to establish investment companies to develop their own financial resources. The new law also gives the universities the right to receive financial compensation for their services in various ways, such as charging tuition fees for postgraduate programs, diplomas, training, and educational courses, undergraduate programs for non-Saudi students, along with charging fees for scientific research or consulting services, and for opening branches abroad (see Articles 49 and 50 of the University Regulation [21]).

King Abdelaziz University (KAU) needed to achieve financial sustainability for a variety of institutional and strategic reasons. The most important factor when it comes to strategic justifications is the second pillar of the Saudi Vision 2030 (A Thriving Economy) which aspires to maximize investment capabilities, introduce potential investment possibilities, and further open Saudi Arabia to commerce. When it comes to institutional grounds, some of the reasons include (1) making KAU a more competitive university locally, globally, and regionally with a higher ranking and maintaining that, and (2) making better use of all the resources available to the university system in terms of people, money, technology, and information so that the university can obtain the best possible return on its investment, and (3) to overcome the paucity of the university’s financial resources, which does not suit the requirements needed for it to be competitive. Hence, the university is trying to provide various funding resources. Based on that, this paper proposed a Green Ocean Strategy for Financial Sustainability (GOSFS) for the first time to higher education institutions. The paper presented a generalized GOSFS roadmap from 18 steps followed by an application at KAU. The application phase prompted changes to the established Business Model Canvas template and the balanced scorecard methodology.

It is recommended that the following conditions have to be met in order to use GOSFS effectively and to achieve financial sustainability at the university: (1) the university’s dependence on innovative funding approaches; (2) searching for additional funding sources and mechanisms that contribute to supporting the university’s activities and programs and enhancing its viability; (3) the adoption of regulations that provide the university an opportunity to use GOSFS, and (4) there must be a strategic innovation system at the university in order to keep an eye on all the available opportunities. This will drive business growth and activate the university investment ecosystem regarding whether highly qualified human capital to invest in, financial resources to increase, or technical resources to take advantage of.

Restrictions and Future Directions

There are always opportunities for further study due to global economic changes that will have an impact on higher education funding. This effect can necessitate periodically revising the suggested roadmap strategy for financial sustainability. The current study is restricted to Saudi University Regulations Articles 49 and 50. Additionally, it is constrained by the amount of time needed to implement the plan and accomplish the goals. A further consideration is the amount of time needed to alter university behavior throughout the phase of transition away from the “unilateral approach” to finance and toward the “diversification of financing resources”. Quick achievements of KAU in line with its financial sustainability plan are limited to the inventory list of all investment opportunities in the Facilities and Infrastructure Pillar by the investment opportunities team consisting of KAU’s Business Agency and KAU’s Projects Agency members. This is besides committing the necessary financial amounts (venture capital) to implement initiatives that have high financial returns, such as strategic projects, healthcare projects, etc.

Future studies may use multi-criteria decision-making (MCDM) tools to evaluate and rank the strategy plan initiatives based on the required quick-win scenario. In this situation, the initiatives’ criteria can be weighted using the Stepwise Weight Assessment Ratio Analysis (SWARA) approach, and the initiatives can be ranked using the Technique for Order Performance by Similarity to Ideal Solution (TOPSIS) approach. Other studies may be necessary in order to modify the GOSFS plan in light of the nation’s vision for higher education institutions. On the basis of the transparency of the information gleaned from the university sectors included in the financial sustainability strategy plan, another study may consider the accuracy of the expected total income.