Exploration of mixed-ownership vocational colleges in China: Models and influencing factors

The tripartite co-funded model

The tripartite co-funded model of MOVCs is generally established at the whole-college level, which usually requires the local government, college, and enterprises to jointly finance the construction of the college (Figure 1). There are some obstacles in the legal system when this model is implemented because colleges and enterprises are required to be integrated as legal persons in this model, but some enterprises have no independent legal person status. Consequently, the number of MOVCs belonging to the tripartite co-funded MOVC category is relatively small. Only two schools (C1 and C3) showed this pattern in the study sample.

Figure 1. The tripartite co-funded model.

In terms of funding, the MOVCs in the tripartite co-funded model are usually funded by the local government and enterprises, and they distribute the college income according to the shares. In this model, the proportion of enterprise shares is usually higher than that of government shares. The model also enables enterprises to participate deeply in all aspects of vocational education, including professional planning, curriculum design, textbook development, teaching design, and teaching delivery. For example, the current shareholding ratio of C1 vocational college, a transportation-related professional vocational college, is 1.47% for the municipal government and 67.79%, 15.37%, and 15.37%, respectively, for three transportation-related enterprises. The main sources of school revenue are student tuition fees and social training fees from the paid training programs carried out by the college.

In terms of school management, the MOVCs in the tripartite co-funded model usually combine the traditional management model of public colleges with the core of modern enterprise management, effectively separating decision-making power, management power, and supervisory power from each other. For example, the C1 vocational college is directed by the school board, which has seven members, including enterprise personnel, education department personnel, and school personnel, who are responsible for decision-making leadership, of which the chairman is the largest shareholder. The selection of the principal of this college is recommended by the government, and the candidate must receive unanimous approval from all shareholders before taking office. The principal is mainly responsible for teaching and school management. In addition, the college has established a supervisory board composed of representatives from Weifang City Financial Holding Group, enterprises, and teachers. The supervisory board exercises the functions of supervision and oversight over the leadership and decision-making of the school board and the college's management of education.

In terms of faculty management, the employment system is adopted, and performance evaluation is conducted in this model, with a particular emphasis on the teachers' experiences from the enterprises. The professional teachers at the college are generally from the enterprises, and these specialized teachers are required to work in the enterprises for two and a half years within a five-year period. Regarding teacher salaries, a corporate-style approach is adopted, with remuneration based on teachers' performance contributions and promotions based on their ability levels.

The secondary institute model

The secondary institute model refers to vocational colleges whose subsidiary colleges are established through enterprises, social capital, and others, and jointly managed by the enterprises and colleges. This model primarily utilizes a market-based operation mechanism, in which the vocational college and the enterprise jointly establish a shareholding company to oversee and manage the college's affairs (Figure 2). The local government does not necessarily have a stake and rarely intervenes in the cooperation between a college and an enterprise (shown by the dotted line in Figure 2). This model has become the most popular form of MOVC because most secondary institutes can obtain independent legal status for their nature as shareholding companies.

Figure 2. The secondary institute model.

Colleges and enterprises employ various methods to clarify ownership and allocate shares, and they distribute profits according to their shares. In the secondary institute model, the input mechanisms of the secondary institute are diversified, encompassing both tangible assets (e.g., funds, equipment, and premises) and intangible assets (e.g., the college's brand). In the process of specific implementation, the college and the enterprise utilize disparate equity allocation methods because they use different mechanisms when converting equity. For example, according to the interview with the director of the C4 vocational college, the shareholding ratio of the college is 20% because of its intangible-asset investment, while that of the enterprise is 80% for its investment of actual funds in the secondary institute. The college and enterprise usually distribute profits according to their respective shareholdings.

Regarding management systems, the dean assumes responsibility for the secondary institute under the direction of the institute's board, while the general manager of the joint-stock company is given full responsibility for the company also under the direction of the institute's board. However, in general, the two management groups have the same administrative members, all of whom are given similar rights in the two different management systems. The board is composed of representatives from both the college and the enterprise or multiple investing enterprises. The chairman of the joint-stock company is the legal representative of the majority shareholder company, which is the largest investor of the secondary institute according to the result of the equity converted. The general manager of the joint-stock company and the dean of the secondary institute are both recommended by the college, and the candidates must obtain permission through a unanimous resolution by all board shareholders before taking office. Additionally, these two positions are often held by the same individual.

Regarding student training, the "dual-track" system is generally adopted, with both general courses and college-enterprise joint courses offered. The college-enterprise collaborative courses are mainly practice-oriented and jointly developed by the college and the enterprise. Enterprises are typically required to participate in the entire talent cultivation process. The proportion of theoretical and practical courses can be adjusted appropriately based on the needs of the enterprises. The practical courses are mainly implemented by enterprises, while the theoretical courses are implemented by colleges. Usually, enterprises provide practical cases used by colleges to revise to come up with new textbooks., and then assign the professional teachers to teach. At the same time, enterprises carry out on-the-job training for students.

The joint training base model

MOVCs based on joint training are also established in the form of joint-stock companies founded by both a college and an enterprise. The college and enterprise jointly establish a for-profit joint-stock company based on a specific joint construction of the major, using the productive training base as the school-running entity (Figure 3). The joint investment of this MOVC model is solely focused on the practical training base, which involves fewer assets compared to the two previous models. Hence, local governments typically do not participate in the joint construction of a training base.

Figure 3. The joint training base model.

The joint training base model typically allocates shares according to the actual capital input and distributes profits accordingly. Under this model, both the college and the enterprise generally invest actual funds to establish productive mixed-ownership training bases within the college premises upon the request of the enterprise. For example, C6 College signed an agreement with a metallurgical equipment materials company to establish a mixed-ownership company registered within the college and to jointly build production lines, also serving as a training base. The enterprise contributed RMB 5.1 million for a 51% stake, while the college contributed RMB 4.9 million for a 49% stake. The joint-stock company sells the molds produced on these bases, dividing the profits between the two parties according to their respective shareholding percentages.

The general manager of the joint-stock company assumes responsibility for the management of the company under the direction of the board. The board is composed jointly of representatives from both the college and the enterprise, and the chairman of the joint-stock company is the head of the enterprise, while the general manager is a representative of the college. Additionally, the supervisory board is set up by the joint-stock company to oversee educational outcomes, corporate development, and preservation of assets belonging to the Chinese government. In terms of teacher management, the type of staff participating in the practical training base remains unchanged whether they come from the college or the enterprise. Moreover, the salaries of the college staff remain unchanged.

Legal and institutional factors

Legal and institutional factors pertain to the norms, standards, and measures formulated by the government on the relevant matters in the construction of MOVCs. Several important issues often discussed in the interviews included the specificity of regulations and laws, incentive policies for enterprises, property rights evaluation, and criteria for property valuation and pricing. In the interviews, the leaders of MOVCs often talked about the criteria for property valuation and pricing. The current policies do not specify which assets can be used for investment, and there is a lack of specific criteria for the property valuation and pricing of various types of assets, especially for intangible assets. Thus, enterprises do not know how to invest in MOVCs and do not dare to invest in them. As the vice director of C5 College remarked: "There is no reliable method to price patent rights, trademark rights, brand reputation value, etc., so there is no way to clarify the respective shares of enterprises and colleges. When it comes to negotiations, it's hard to reach an agreement because both sides think they offer more".

The incentive policy for enterprises is another common topic mentioned by the interviewees. Most of the leaders of vocational colleges who participated in the present study believe that the government does not provide sufficient funding for enterprises participating in running colleges, and how these enterprises can apply for funding is unclear. This may yield two results. First, enterprises may have no motivation to participate in the construction of MOVCs and may refuse to cooperate with the college. Second, enterprises may try to bargain with vocational colleges in the process of cooperation, hoping to obtain more benefits from them.

Production and income

Production and income refer to how local governments, colleges, and enterprises cooperate in the production process and how to distribute the profits obtained from the production. According to the interviews, most MOVCs currently distribute income according to stock equity. However, it is difficult to distribute ownership of intangible products, such as intellectual property (i.e., innovative inventions or patents). In addition, there are often challenges in the co-production process. In particular, how the teachers from vocational colleges participate in enterprises' production, how to pay the teachers for their extra workload, and how to arrange the schedules of the teachers' and students' participation in the production will affect the success or failure of MOVCs. For example, the vice director of C7 College stated the following: "The cooperation in the production process is relatively shallow ... Students regularly go to the enterprise for practice, [and] some college experts may give some advice on the technical problems in the production of enterprises ... In the majority situation, the teachers are too busy to participate in the production of enterprises".

Management factors

Management factors refer to issues that MOVCs may encounter in their management structures, such as the management of multiple departments, the distribution of power, and government interference. Most MOVCs usually combine the traditional management model of public colleges with the core of modern enterprise management to form a new management system. However, there are some new challenges to this new system. For example, some new departments may be established due to MOVCs, such as the Department of Innovation and Entrepreneurship, the Center of Industrial Development Research, the Center of Industrial Research and Development and Transformation, and the Department of Production Training. To ensure that these departments operate effectively, it may be necessary to carry out the targeted management reform and formulate new management regulations. In addition, because local governments, enterprises, and colleges all hold shares in MOVCs, it is very important to allocate power among these different stakeholders in management and avoid conflicts of interest among them. Given that there is a state-oriented political tradition in China, it is possible that the local government will have greater power, with a small share in some vocational colleges.

Personnel factors

Personnel factors refer to the problems that teachers of vocational colleges or employees of enterprises may face in running MOVCs. There are four preliminary subthemes under this theme: multiple job responsibilities, salary and welfare, recruitment standards, and teachers' "dual competence" (i.e., having both professional practice ability and teaching ability). Multiple job responsibilities were frequently mentioned in the interviews, mainly because the personnel from enterprises and colleges need to collaborate closely to promote the teaching effect and improve the production efficiency of enterprises in MOVCs. For example, the skilled workers from enterprises are expected to work as part-time teachers in vocational colleges, while the teachers from vocational colleges are expected to help companies solve the technical bottlenecks in production through research and development. The other three preliminary subthemes can all be seen as the results of the theme of multiple job responsibilities. Because people need to take on more kinds of tasks, MOVCs require employees to have a variety of abilities, which raises the bar for recruitment. In turn, employees will demand higher salaries and benefits. In an interview, the vice director of the administrative office at C2 College stated the following: "Our current salary is actually higher than those of other non-MOVCs because we have introduced a corporate merit-based pay system from the enterprises. If the teacher participates in the enterprise research and development or applies for patents, the teacher will be highly rewarded. However, it remains challenging to recruit a sufficient number of 'dual-qualified' teachers during the recruitment process".

Students and learning

The concept of students and learning refers to how students' learning styles and attitudes may influence their willingness to study at MOVCs. As mentioned in the conceptual framework section, Confucian culture and traditional Chinese values make most students prefer academic universities, but MOVCs typically employ apprenticeship training models and work-integrated learning, which limits students' opportunities to move to academic universities. Consequently, only students with a clear career plan and strong motivation to learn technologies can obtain better learning results in MOVCs. Additionally, the allocation of time between practice and study can impact students' learning effectiveness and teachers' pedagogical methods. Traditionally, teachers from Chinese vocational colleges spend considerable time transmitting professional theoretical knowledge in the classroom, while teachers from MOVCs may need to spend more time on the practical training base than in the classrooms to guide students' technical learning. This presents a great challenge to teachers' competence and requires students to adapt to the new learning styles required.