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THEORIES AND MODELS FOR FINANCIAL MANAGEMENT IN EDUCATION

1. General theories and models2. Models in planning3. Models in decision making

GENERAL THEORIES AND MODELS IN FINANCIAL MANAGEMENT

1. School financial management model (Knight, 1993)

2. Models of Educational management (Bush, 1995)

3. Human capital theory4. Agency theory

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SUMBER KEWANGAN• Modal Pendapatan Belanjawan

SUMBER MANUSIA DAN ASET FIZIKAL• Guru Kakitangan am Peralatan Bangunan

PENGGUNAAN MASA• Kalendar

persekolahan

Jadual kelas Hari dan

waktu bekerja

PROSES PENDIDIKANKurikulum, kaedah, teknologi, latihan

Perkhidmatan sokongan

Pengalaman pembelajaran pelajar

KELUARAN• Pengetah

uan Kemahira

n Sikap

MANFAAT• Tenaga

kerja Warganeg

ara baik Individu

seimbang

PELAJAR• Bilangan Umur Keboleha

n Akademik Motivasi

Dana Sekolah • Kerajaan Derma Yuran Sumber lain

DASAR PENDIDIKAN, POLISI, PERATURAN• Kerajaan PIBG Politik

Model sistem pengurusan kewangan Knight

Petunjuk Sumber yang masuk

Maklumbalas dalaman

Maklumbalas luaran

Donated funds

• Yuran

• Fund raising

Donated resources

Donated time

• Staff

• Pelajar

• Ibubapa

• komuniti

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A MODEL FOR SCHOOL FINANCIAL MANAGEMENT (KNIGHT,1993)

Several features of this model stand out:1. Finance triggers and controls the system.2. Financial resources are only a part of the system.3. The whole system is susceptible to good

management.4. Given the importance of feedback to the system,

good management information is essential.5. Financial management has two face

4 MODELS OF EDUCATIONAL MANAGEMENT (BUSH, 2010)

1. Rational models2. Collegial models3. Political models4. Ambiguity models

Political models

HUMAN CAPITAL THEORY

1. Economist view education (and training as an individual investment decision designed to achieve monetary return in the labor market.

2. Human capital (Adam Smith, John Stuart Mill, Alfred Marshall) – individuals’ skill could contribute to their economic status.

3. Underlying the concept is the idea that knowledge and skills acquired through educational investments increase human productivity enough to justify the costs incurred in acquiring them.

HUMAN CAPITAL THEORY

1. A theory explaining the relationship between principals, such as a shareholders, and agents, such as a company's executives.

2. In this relationship the principal delegates or hires an agent to perform work.

3. The theory attempts to deal with two specific problems:a. first, that the goals of the principal and agent are not in

conflict (agency problem), and b. second, that the principal and agent reconcile different

tolerances for risk.http://www.investorwords.com/6398/agency_theory.html

AGENCY THEORY

MANAGEMENT FUNCTIONS IN FINANCIAL ASPECTS OF EDUCATION INSTITUTION

1. Institution strategic planning and financial planning (Planning Model)

2. Resources planning: Budgeting (budgeting model / budgeting approach)

3. Decision making in allocation distribution (Decision making model)

4. Organizing resources through compliance with financial regulations and accounting system

5. Controlling based on accountability concept

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PLANNING AND DECISION MAKING MODELS IN FINANCIAL MANAGEMENT

1. Types of planning models (Knight, 1993)2. Spending Models on Educational

Resources (Sutton, 1996) – decision making

SWOT ANALYSIS

• Strengths – what are these, currently?• Weaknesses – what are these?• Opportunities – what opportunities are likely to

arise in the future?• Threats – what threats are likely to arise?• Need to consider the institution’s environment,

internal resources, organizational culture, institution’s performance, and outcomes.

4 PLANNING MODELS (KNIGHTS, 1993)

1. RATIONAL2. PRAGMATIC3. ENTREPRENEURIAL4. LATERAL

MODEL ‘A’ The rational approach

C(not visible from B)

GoalB A

The rational approach

MODEL ‘B’ The pragmatic approach

Goals

A

MODEL ‘C’ Entrepreneurial approach

Philosophy and valuesC

B

A

MODEL ‘D’ The lateral approach

Vision or goalD

z

By

A

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SPENDING MODELS ON EDUCATIONAL RESOURCES (SUTTON, 1996)

1. Centralised model2. Decentralised model3. Hybrid model

DECISION MAKING APPROACHES

1. An individual's way of thinking. a. be rational and logicalb. be creative and intuitive

2. An individual's tolerance for ambiguity. a. low tolerance for ambiguity. b. can tolerate high levels of ambiguity

FOUR DECISION-MAKING STYLES

1. Directive Style2. Analytic Style3. Conceptual Style4. Behavioural Style: