Cost management capability and financial sustainability of private schools in Lusaka Province, Zambia

Résumé

Cost management capability, defined as the organisational ability to plan, monitor, control, and strategically reduce operational costs without compromising educational quality, is a fundamental determinant of institutional financial sustainability. Yet its specific effects on private schools in Zambia have not previously been empirically investigated. This study examines the impact of cost management capability on the financial sustainability of private schools in Lusaka Province, Zambia. Grounded in the Tuckman and Chang alongside financial vulnerability model and Bowman's financial capacity framework, the study employed an explanatory sequential mixed-methods design (QUAN→qual). Quantitative data were collected from 272 valid survey questionnaire responses drawn from school owners, principals, bursars, and accountants at 594 registered private primary and secondary schools across the six districts of Lusaka Province, using two-stage stratified random sampling guided by Yamane's formula. Qualitative data were gathered through 15 purposively selected semi-structured telephone interviews conducted to theoretical saturation. A Financial Sustainability Index (FSI) was computed using Principal Component Analysis, with a mean FSI of 0.53 (SD = 0.202) reflecting moderate financial fragility across the sector. Cost management capability items recorded consistently low mean scores, ranging from 1.68 to 1.77 on the five-point Likert scale, reflecting significant deficits in cost management practices across the sector. Exploratory Factor Analysis confirmed a strong single-factor structure (KMO = 0.941; chi-square = 1,580.00; p < .001; eigenvalue = 5.26; variance explained = 75.16%). Pearson correlation analysis, supported by bias-corrected and accelerated bootstrap estimation with 5,000 resamples, revealed a moderate-to-strong, statistically significant positive relationship between cost management capability and the FSI (r = 0.550; p < .001; BCa 95% CI: 0.41–0.69), making it the second strongest predictor of financial sustainability after revenue diversification. Multiple regression analysis confirmed cost management capability as a significant and independent predictor of financial sustainability (R² = 0.41; F(7,264) = 25.99; p < .001). Moderation analysis revealed that market competition significantly and positively moderated the cost management–financial sustainability relationship, while regulatory intensity had a marginally significant positive moderating effect. Qualitative findings strongly corroborated these results, with participants from more financially stable schools consistently identifying regular budget monitoring, quarterly operational expenditure reviews, strategic cost reduction initiatives, and proactive spending controls as the practices most closely associated with improved financial sustainability outcomes. The study concludes that cost management capability is a critical and significantly underutilised financial sustainability lever in Zambia's private school sector, and that systematic investment in cost management capacity is urgently required across the sector. This study recommends that private school administrators should prioritise the establishment of basic cost management infrastructure as an immediate and high-priority financial sustainability intervention.