Sustainability as cultural value in islamic private higher education

Abstract

The organizational sustainability is achieved when Islamic values are transformed into the corporate culture at IPHE (Islamic Private Higher Education). At the same time, it can reduce asymmetric information between foundations as principals with institute management as an agent. Our paper aims to determine the adverse selection and moral hazard from asymmetric information production in IPHE. Our primary data were conducted by nonparametric scale instruments from 6 IPHEs in East Java and analyzed using the Kolmogorov-Smirnov (K-S) test. This study indicated that; (1) asymmetric VMMT information between principals and agents resulted in an adverse selection problem, the assumption error the agent has a religious value; thus, it is not difficult to understand VMMT in IPHE based on spiritual matters; and (2) an outcome mechanism was found based on a contract to prevent asymmetric information. Nevertheless, a moral hazard problem was also found, i.e. when an agent as an economic human did an act that was not in the principal’s interests when he did not receive an incentive reward in quality learning. In contrast, they act in the principal’s interests when obtaining incentives of appropriations for research and community services.