The effects of stakeholder power, strategic posture and slack financial resources on sustainability performance in UK higher education institutions

Abstract

Purpose Higher education institutions (HEIs) are critical in the sustainability agenda, not only as catalysts for promoting sustainability practices but also because their activities have substantial social, economic and environmental impacts. Yet there is limited research that examines their sustainability performance. This paper aims to investigate the factors that are associated with sustainability performance in HEIs. Specifically, drawing from the stakeholder theory and exploiting Ullmann’s (1985) conceptual framework, this study examines the association between sustainability performance and stakeholder power, strategic posture and financial slack resources. Design/methodology/approach The authors draw the sample from the People & Planet University Green League Table for the period 2011–2019 and use the generalised estimating equations for the modelling approach. Findings This study finds that stakeholder power, in particular, funding grant income, tuition fee income and student and staff numbers, are positively associated with sustainability performance. In relation to strategic posture, this study finds that sustainability performance is negatively associated with governing body independence and gender diversity, and positively associated with internal structures. Finally, regarding financial slack resources, this study finds that surplus income (staff costs) is positively (negatively) associated with sustainability performance. Practical implications To the best of the authors’ knowledge, this research contributes to several existing literature focusing on the not-for-profit sector by documenting, for the first time, the role of stakeholder power, strategic posture and slack financial resources on sustainability performance. Social implications The paper includes relevant implications for HEI managers and regulators for promoting sustainability. Originality/value These results contribute to the literature on the factors influencing sustainability performance.