Cost engineering for sustainable universities: pricing policy design enabled by strategic management accounting

Abstract

Pricing of academic programs is one cost engineering and policy development challenge for universities seeking to enhance their sustainability performance in an environment of scarce resources and value-based stakeholder interests. This research proposes and empirically investigates a decision support model that examines how strategic management accounting practices enable the development of pricing policy and, hence, enhance the sustainability performance of Saudi Arabian universities. Data were collected from senior academic decision-makers of public and private sector universities and analyzed through structural equation modeling to establish direct and indirect effects. Findings revealed the direct effect of strategic management accounting on the sustainability performance of universities and the partial mediating role of pricing policy design, thereby confirming the critical role that pricing policy plays as a conduit through which the analytical capabilities of strategic management accounting practices can be leveraged to enhance the sustainability performance of Saudi Arabian universities. Implications of the findings are that Saudi Arabian universities can enhance their sustainability performance through the adoption and application of strategic management accounting-driven cost and value analytics to inform pricing policy and governance, thereby enhancing the effectiveness of resource allocation and the quality of service to the wider community and the environment.