Students’ Satisfaction with Education Service in Public Versus Private Higher Education Institutions in Transitional Economies

The transitional process to market economy in Central and Eastern European (CEE) countries has caused several challenges in the higher education sector. Besides traditional public sector higher education institutions (HEIs), the dynamic growth of private ones can be observed in the last two decades, particularly in the area of business education. As competition increases, the more important it becomes to adopt a market-oriented approach, which is built around customer satisfaction. This study aims to contribute to broadening theoretical and managerial knowledge and identify the specific challenges that public and private HEIs are facing in transitional economies, as well as to identify key factors for HEIs development strategies and policies to attract and retain students as satisfied customers. The research included a sample of 1981 students from Croatia and Slovenia. Descriptive statistics, factor analysis, correlation analysis, ANOVA, and regression analysis were used to identify the important differences in students’ satisfaction with the education service they receive in public versus private HEIs. The research results indicate a significantly higher level of satisfaction of students of private HEIs. This is true for all the aspects of education service, except for students’ social life provided by the university.