Hiring Education Agents for International Student Recruitment: Perspectives from Agency Theory

Abstract

This paper applies agency theory to explore the contractual relationship between higher education institutions (HEI) and HEI-contracted for-profit education agents in international student recruitment, bridging a gap in the existing literature by investigating the underlying issues surrounding these relationships. Building on insights and findings from previous studies related to this topic, our analysis shows that HEI–education agent relationships are often undermined by goal conflicts and information asymmetries that significantly constrain the possibilities for optimal contractual options to monitor and incentivise agents. The present analysis shows that hybrid governance models that include elements from both behaviour- and outcome-based contracts are often most efficient in managing HEI–education agent relationships. The paper critically evaluates how insights from agency theory can help to mitigate these problems and identifies specific inherent frictions that may make government interventions desirable in overseeing the use of education agents.

This is a preview of subscription content, log in to check access.

References

  1. Adams, T., Leventhal, M. and Connelly, S. (2012) ‘International student recruitment in Australia and the United States: approaches and attitudes’, in D. K. Deardorff, H. de Wit and J. D. Heyl (eds.) The SAGE Handbook of International Higher Education, Thousand Oaks, CA: SAGE Publications Ltd, pp. 399–416.

    Google Scholar 

  2. AIRC (2015) AIRC Certification Standards, Bethesda, MD: American International Recruitment Council.

    Google Scholar 

  3. Aliouche, E.H. and Schlentrich, U. (2011) ‘A model of optimal international market expansion: the case of US hotel chains expansion into China’, in M. Tuunanen, J. Windsperger, G. Cliquet and G. Hendriksen (eds.) New Developments in the Theory of Networks, Heidelberg: Physica-Verlag HD, pp. 135–154.

    Google Scholar 

  4. Altbach, P. and Reisberg, L. (2013) ‘The Pursuit of International Students in a Commercialized World’, International Higher Education 73(1): 2–4.

    Google Scholar 

  5. Auld, D. (2010) ‘Strategic planning and the principal-agent issue in higher education leadership’, Academic Leadership 8(3): 31–35.

    Google Scholar 

  6. Australian Government (2007) ESOS Act National Code Part D. Explanatory Guide for Standard 4, Canberra: Australian Government.

    Google Scholar 

  7. Australian Government (2009) Using Education Agents. A Guide for Providers of Education and Training to Overseas Students, Canberra: Department of Education, Employment and Workplace Relations.

    Google Scholar 

  8. Barney, J.B. and Ouchi, W.G. (1986) Organizational Economics, San Francisco: Jossey-Bass Publishers.

    Google Scholar 

  9. Becker, R. and Kolster, R. (2012) International Student Recruitment: Policies and Developments in Selected Countries, The Hague: Nuffic.

    Google Scholar 

  10. Bergen, M., Dutta, S. and Walker, O.C.Jr. (1992) ‘Agency relationships in marketing: A review of the implications and applications of agency and related theories’, Journal of Marketing 56(3): 1–24.

    Article  Google Scholar 

  11. Borgos, J. (2013) ‘Using principal-agent theory as a framework for analysis in evaluating the multiple stakeholders involved in the accreditation and quality assurance of international medical branch campuses’, Quality in Higher Education 19(2): 173–190.

    Article  Google Scholar 

  12. Bridge Education Group (2016) Pace of adoption of international student recruitment agencies by U.S. institutions, Denver, CO: Bridge Education Group.

    Google Scholar 

  13. Cai, Y. and Kivistö, J. (2013) ‘Tuition fees for international students in Finland: Where to go from here?’, Journal of Studies in International Education 17(1): 55–78.

    Article  Google Scholar 

  14. Chang, C. (2013) Recruitment Agents: A Legal and Regulatory Overview. A Background paper, British Council, retrieved from https://www.britishcouncil.org/sites/default/files/recruitment-agents-a-legal-and-regulatory-overview.pdf.

  15. Coco, L. (2015) Capturing a global student market for colleges and universities: The use of private third party agents in international student recruitment. Ph.D. dissertation, The University of Georgia, Athens, GA.

  16. Coffey, R. (2014) The influence of education agents on student choice making in the Canadian postsecondary search process. Ph.D. dissertation, Michigan State University, East Lansing, MI.

  17. Coffey, R. and Perry, L.M. (2013) The Role of Education Agents in Canada’s Education Systems, Toronto: Council of Ministers of Education Canada.

    Google Scholar 

  18. Collins, F. L. (2012) ‘Organizing student mobility: Education agents and student migration to New Zealand’, Pacific Affairs 85(1): 137–160.

    Article  Google Scholar 

  19. Cox, M. (2012) International student recruitment: policies and developments in selected countries: Sweden, Norway and Finland, The Hague: Nuffic.

    Google Scholar 

  20. Davis, J.H., Schoorman, F.D. and Donaldson, L. (1997) ‘Toward a stewardship theory of management’, Academy of Management Review 22(1): 20–47.

    Article  Google Scholar 

  21. de Vita, G. and Case, P. (2003) ‘Rethinking the internationalisation agenda in UK higher education’, Journal of Further and Higher Education 27(4): 383–398.

    Article  Google Scholar 

  22. DIMIA (2004) Options for Regulating Migration Agents Overseas and the Immigration Related Activities of Education Agents, Discussion Paper, Canberra: Department of Immigration and Multicultural and Indigenous Affair, Australian Government.

  23. Dimitratos, P. (2003) ‘Management of internationalization ventures: Should international partners be “agents” or “stewards”?’, in C. Wheeler, F. McDonald and I. Greaves (eds.) Internationalization: Firm Strategies and Management, Houndmills: Palgrave MacMillan, pp. 138–149.

    Google Scholar 

  24. Doherty, A.M. and Quinn, B. (1999) ‘International retail franchising: An agency theory perspective’, International Journal of Retail and Distribution Management 27(6): 224–237.

    Article  Google Scholar 

  25. Donaldson, L. (1990) ‘The Ethereal hand: Organizational economics and management theory’, The Academy of Management Review 15(3): 369–381.

    Article  Google Scholar 

  26. Donaldson, L. and Davis, J.H. (1991) ‘Stewardship theory or agency theory: CEO governance and shareholder returns’, Australian Journal of Management 16(1): 49–64.

    Article  Google Scholar 

  27. Education Review (2013) ‘The dollar sign above every international student’, Education Review, 2 July.

  28. Eisenhardt, K. (1989) ‘Agency theory: An assessment and review’, Academy of Management Review 14(1): 57–74.

    Article  Google Scholar 

  29. Enders, J., de Boer, H. and Weyer, E. (2013) ‘Regulatory autonomy and performance: The reform of higher education re-visited’, Higher Education 65(1): 5–23.

    Article  Google Scholar 

  30. Enoka,M. (2016a) ‘Hundreds of students at risk of deportation’, The Wireless, 20 June.

  31. Enoka, M. (2016b) ‘Why are so many Indian students coming to New Zealand?’, The Wireless, 11 July.

  32. Fladmoe-Lindquist, K. and Jacque, L.L. (1995) ‘Control modes in international service operations: The propensity to franchise’, Management Science 41(7): 1238–1249.

    Article  Google Scholar 

  33. Galbraith, G. and Brabner, R. (2013) Using international recruitment agents: Risks and regulation? Working paper, London: Leadership Foundation for Higher Education.

  34. Goi, M. T. (2015) ‘External drivers of entry mode decisions of a higher education institution’, Asia Pacific Journal of Marketing and Logistics 28(1): 124–140.

    Article  Google Scholar 

  35. Hagedorn, L.S. and Zhang, L.Y. (2011) ‘The use of agents in recruiting Chinese undergraduates’, Journal of Studies in International Education 15(2): 186–202.

    Article  Google Scholar 

  36. Huang, I.Y., Raimo, V. and Humfrey, C. (2016) ‘Power and control: Managing agents for international student recruitment in higher education’, Studies in Higher Education 41(8): 1333–1354.

    Article  Google Scholar 

  37. ICAC (2004) Report under section 14(2) of the Independent Commission Against Corruption Act 1988 to the Minister for Education and Training, Sydney: Independent Commission Against Corruption.

    Google Scholar 

  38. Jensen, M.C. and Meckling, W.H. (1976) ‘Theory of the firm: Managerial behaviour, agency costs and ownership structure’, Journal of Financial Economics 3(4): 305–360.

    Article  Google Scholar 

  39. Jiang, X. (2008) ‘Towards the internationalisation of higher education from a critical perspective’, Journal of Further and Higher Education 32(4): 347–358.

    Article  Google Scholar 

  40. Jopson, D. (2005) ‘Migration agents risk universities’ future’, The Sydney Morning Herald, 9 May.

  41. Kauko, J. and Medvedeva, A. (2016) ‘Internationalisation as marketisation? Tuition fees for international students in Finland’, Research in Comparative and International Education 11(1): 98–114.

    Article  Google Scholar 

  42. Kauppinen, I., Mathies, C. and Weimer, L. (2014) ‘Developing a conceptual model to study the international student market’, in B. Cantwell and I. Kauppinen (eds.) Academic Capitalism in the Age of Globalization, Baltimore: Johns Hopkins University Press, pp. 248–264.

    Google Scholar 

  43. Kiser, E. (1999) ‘Comparing varieties of agency theory in economics, political science, and sociology: An illustration from state policy implementation’, Sociological Theory 17(2): 146–170.

    Article  Google Scholar 

  44. Kivistö, J. (2005) ‘Government-higher education institution relationship. Theoretical considerations from the perspective of agency theory’, Tertiary Education and Management 11(1): 1–17.

    Article  Google Scholar 

  45. Kivistö, J. (2007) Agency Theory as a Framework for the Government-University Relationship. Ph.D. dissertation, Tampere University, Tampere.

  46. Kivistö, J. (2008) ‘Agency theory as a framework for government-university relationship: Assessment of the Theory’, Journal of Higher Education Policy and Management 30(4): 339–350.

    Article  Google Scholar 

  47. Kivistö, J. and Zalyevska, I. (2015) ‘Agency theory as a framework for higher education governance’, in J. Huisman, H. de Boer, D. Dill,and M. Souto-Otero (eds.) The Palgrave International Handbook of Higher Education Policy and Governance, Basingstoke: Palgrave Macmillan, pp. 132–151.

    Google Scholar 

  48. Knight, M. (2011) Strategic Review of the Student Visa Program. Sydney, Australian Government.

    Google Scholar 

  49. Landelijke Commissie Gedragscode Hoger Onderwijs (2014) Code of conduct international students, Landelijke Commissie, retrieved from http://internationalstudy.nl/wp-content/uploads/2016/08/Gedragscode-2014-Engels.pdf.

  50. Lane, J. E. (2005) Agency problems with complex principals. State oversight of higher education: A theoretical review of agency problems with complex principals. Paper presented at the annual conference of the Association for the Study of Higher Education; 17–19 November, Philadelphia, United States.

  51. Lane, J. E. (2007) ‘Spider web of oversight: Latent and manifest regulatory controls in higher education’, Journal of Higher Education 78(6): 615–644.

    Article  Google Scholar 

  52. Lane, J. E., Kinser, K. and Knox, D. (2013) ‘Regulating cross-border higher education: A case study of the United States’, Higher Education Policy 26(2): 147–172.

    Article  Google Scholar 

  53. Lane, J.E. and Kivistö, J. (2008) ‘Interests, information, and incentives in higher education: Principal-agent theory and its potential applications to the study of higher education governance’, in J.C. Smart (ed.) Higher education: Handbook of theory and research, Dordrecht: Springer, pp. 141–179.

    Google Scholar 

  54. Lassar, W.M. and Kerr, J. L. (1996) ‘Strategy and control in supplier-distributor relationships: An agency perspective’, Strategic Management Journal 17(8): 613–632.

    Article  Google Scholar 

  55. Liefner, I. (2003) ‘Funding, resource allocation, and performance in higher education systems’, Higher Education 46(4): 469–489.

    Article  Google Scholar 

  56. Milgrom, P. and Roberts, J. (1992) Economics, Organization and Management, New Jersey: Prentice Hall.

    Google Scholar 

  57. Marginson, S. (2007) ‘Global position and position taking: The case of Australia’, Journal of Studies in International Education 11(1): 5-32.

    Article  Google Scholar 

  58. Matthew, D. (2012) ‘Grand fee paid for each foreign student’, Times Higher Education, 5 July.

  59. Mazzarol, T. and Soutar, G.N. (2002) “Push-pull” factors influencing international student destination choice’, International Journal of Educational Management 16(2): 82–90.

    Google Scholar 

  60. Moe, T. M. (1984) ‘The New Economics of Organization’, American Journal of Political Science 28(4): 739–777.

    Article  Google Scholar 

  61. Moodie, G. (2011) ‘5 Lessons from Australia on International Agents’, The Chronicle of Higher Education, 1 September.

  62. NACAC (2013) Report of the Commission on International Student Recruitment, Arlington, VA: National Association for College Admission Counseling.

    Google Scholar 

  63. NACAC (2014) International Student Recruitment Agencies. A Guide for Schools, Colleges and Universities, Arlington, VA: National Association for College Admission Counseling.

    Google Scholar 

  64. New Zealand Government (2016) Education (Pastoral Care of International Students) Code of Practice, Wellington: Ministry for Tertiary Education, Skills and Employment

    Google Scholar 

  65. New Zealand Herald (2012) ‘Training provider offers agents 70% sweeteners’, New Zealand Herald, 27 July.

  66. OBHE (2014) The Agent Question: Insights from Students, Universities and Agents, Redhill, UK: The Observatory of Borderless Higher Education.

    Google Scholar 

  67. O’Connell, N. (2012) Exploring the role of relationship marketing between universities and education agents. A case study analysis. Ph.D. dissertation, Central Queensland University, Rockhampton.

  68. OECD (2015) Education at a Glance 2015: OECD Indicators, Paris: OECD.

    Google Scholar 

  69. Ott, P. (2016) Agencies, Third-Party Vendors, and the Grooming of the College Applicant in China. Ph.D. dissertation, University of Pennsylvania, Philadelphia

  70. Oxford Research (2013) Tuition fees for international students. Nordic practice, Copenhagen: Nordic Council of Ministers.

    Google Scholar 

  71. Paton, G. (2013) ‘Foreign recruitment agents ‘paid £120 m’ by universities’, The Telegraph, 29 July

  72. Perrow, C. (1986) ‘Economic theories of organization’, Theory and Society 15(1): 11–45.

    Article  Google Scholar 

  73. Petruzzellis, L. and Romanazzi, S. (2010) ‘Educational value: How students choose university: Evidence from an Italian university’, International Journal of Educational Management 24(2): 139–158.

    Google Scholar 

  74. Pimpa, N. (2003) ‘The influence of peers and student recruitment agencies on Thai students’ choices of international education’, Journal of Studies in International Education 7(2): 178–192.

    Article  Google Scholar 

  75. Productivity Commission (2015) International Education Services, Canberra: Commission Research Paper.

    Google Scholar 

  76. Queensland Government (2009) International education agent management. A best practice guide for the Queensland VET Sector, Brisbane: Department of Education and Training.

    Google Scholar 

  77. Raimo, V., Humfrey, C. and Huang, I.Y. (2015) Managing International Student Recruitment Agents. Approaches, Benefits and Challenges, London: British Council.

    Google Scholar 

  78. Reisberg, L. and Altbach, P.G. (2011) ‘The ambiguities of working with third-party recruiters’, International Higher Education 63(1): 3–6.

    Google Scholar 

  79. Ricketts, M. (2002) The economics of business enterprise. An introduction to economic organization and the theory of firm (Third edition), Cheltenham, UK: Edward Elgar.

    Google Scholar 

  80. Ross, S.A. (1973) ‘The economic theory of agency: The principal’s problem’, American Economic Review 63(2): 134–139.

    Google Scholar 

  81. Ruby, A. (2009) ‘GLOBAL: International students: a $100 billion business?’, University World News, 27 September.

  82. Ryan, R.M. and Deci, E.L. (2000) ‘Intrinsic and extrinsic motivations: Classic definitions and new directions’, Contemporary Educational Psychology 25(1): 54–67.

    Article  Google Scholar 

  83. Shapiro, S.P. (2005) ‘Agency theory’, Annual Review of Sociology 31: 263–284.

    Article  Google Scholar 

  84. Shinn, C., Welch, A. and Bagnall, N. (1999) ‘Culture of competition? Comparing international student policy in the United States and Australia’, Journal of Further and Higher Education 23(1): 81–99.

    Article  Google Scholar 

  85. Spence, M. (1973) ‘Job market signaling’, Quarterly Journal of Economics 87(3): 355–374.

    Article  Google Scholar 

  86. Tan, L. (2015) ‘International students being duped by agents to study in regions’, New Zealand Herald, 8 December.

  87. Teichler, U. (2007) Higher Education Systems: Conceptual Frameworks, Comparative Perspectives, Empirical Findings, Rotterdam: Sense Publishers.

    Google Scholar 

  88. Teichler, U. (2008) ‘Diversification? Trends and explanations of the shape and size of higher education’, Higher Education 56(3): 349–379.

    Article  Google Scholar 

  89. UNESCO (1997) International Standard Classification of Education ISCED 1997, Paris: UNESCO.

    Google Scholar 

  90. Waterman, R.W. and Meier, K.J. (1998) ‘Principal-agent models: An expansion’, Journal of Public Administration Research and Theory 8(2): 173–202.

    Article  Google Scholar 

  91. Watt, H., Nevell, C. (2012) ‘How foreign students with lower grades jump the university queue’, The Telegraph, 26 June.

  92. Zhang, L.Y. (2011). The use of agents in applying to the U.S. higher education: experience of Chinese undergraduate students. Ph.D. dissertation, Iowa State University, Ames.

  93. Zhang, Y. and Hagedorn, L.S. (2011) ‘College application with or without assistance of an education agent: Experience of international Chinese undergraduates in the US’, Journal of College Admission 212(Summer): 6–16.

    Google Scholar 

Download references

Author information

Affiliations

Authors

Corresponding author

Correspondence to Pii-Tuulia Nikula.

Rights and permissions

Reprints and Permissions

About this article

Verify currency and authenticity via CrossMark

Cite this article

Nikula, P., Kivistö, J. Hiring Education Agents for International Student Recruitment: Perspectives from Agency Theory. High Educ Policy 31, 535–557 (2018). https://doi.org/10.1057/s41307-017-0070-8

Download citation

Keywords

  • agency theory
  • education agents
  • international student recruitment
  • international education