Constructing Strategy of Online Learning in Higher Education: Transaction Cost Economy

The online learning tools and management also known as Learning Management System (LMS) have been adopted by higher education as it allows convenient and flexibility in learning process between students and instructors or tutors with minimal cost. The adoption of online learning tools in university has allowed users (students and instructors) to interact, share and discuss anytime-anywhere conveniently. Many students nowadays rely on online resources based using their mobile devices, substituting traditional learning interactions. Universities need strategy to sustain in providing intensive interactions and spreading word out mouth of good services through online learning tools by focusing on niche markets and creating close relationship with their stakeholders. The study presented in this paper analyses how universities design best practices in adopting LMS and evaluate its current state for future improvement. In fact, with proper strategies of LMS, universities have opportunities to sustain their business by offering interesting packages and to improve their services through intensive interactions with their users. In this study, we deploy Transaction Cost Economics (TCE) to understand the change business environment and to construct a model for higher institution to regulate their scenario on online learning strategies in fast changing and threatening business environment.