Students’ perceived value in higher education institutions: investigating the role of antecedents and context

Abstract

Students in higher education institutions (HEIs) develop perceived value related to their academic services. While many studies have suggested some antecedents of perceived values, the interactions between fairness, quality of services, and the context in which the service occurs still received less attention. This study aims to investigate the effect of university organisational justice on students’ perceived value via the mediating role of service quality, in which the relationships are moderated by the students’ awareness of the COVID-19 situation in Higher Education Institutions (HEI). The data were collected from students enrolled in three public universities in South Sulawesi, Indonesia. The students completed a three-wave data collection procedure with an online survey in each wave. After removing incomplete and careless responses, 517 data were included in the analysis. This study found that the effect of perceived university organisational justice on perceived value was mediated by service quality. Students’ awareness of COVID-19 moderated the indirect positive effect of university organisational justice on perceived value via service quality. This mediating mechanism was stronger as the students were aware of COVID-19. Although perceived fairness in academic services positively contributed to perceived value in the universities, students’ awareness of COVID-19 could improve how they perceive university organisational justice, service quality, and value in academic services. HEIs must actively inform their students about the service process and progress, particularly during a crisis. They must thoroughly introduce the adjustments during a crisis and anticipate some disadvantages to their students.

Keywords:

• Customer behaviour
• covid-19
• higher education
• organisational justice
• perceived value
• and service quality

REVIEWING EDITOR:

• Ansar Abbas, Universitas Airlangga - Kampus B, Indonesia

SUBJECTS:

• Economic Psychology
• Economics
• Finance
• Business, Management and Accounting
• Higher Education

Introduction

Higher education institutions (HEIs) have transformed into commercial services, and students tend to expect more value from higher education institutions like other customers in business sectors (Alcaide-Pulido et al., 2022; Moguluwa & Ewuzie, 2013; Nguyen et al., 2021; Woodall et al., 2014;). The management of higher education should incorporate students’ perception of education services in the university and consider their perception a vital element in managing the higher education (Almaiah et al., 2022; Al-Mamary, 2022; Camilleri & Camilleri, 2022; Iqbal et al., 2022). Understanding and shaping students’ perceived value is the key to increasing students’ satisfaction (Chaudhary & Dey, 2021; Nguyen et al., 2023; Sun et al., 2023; Unrau et al., 2017; Vereijken et al., 2018;). Also, understanding how students develop their value-related education services is essential in improving marketing practices in higher education (Barr & McNeilly, 2002; Trullas et al., 2018). Thus, this study investigates how students’ organisational justice, perceived service quality and awareness of a critical situation determine their perceived value toward HEI services.

Generally, satisfied customers maintain the business process and attract new customers (Almansour & Elkrghli, 2023; Dumond, 2000; Mainardes & Freitas, 2023). Customers can form their subjective judgement about the value of a product or service, and this value of the product or service from customers is called the customers’ perceived value (Monroe, 1973; Oh & Jeong, 2004; Sánchez-Fernández & Iniesta-Bonillo, 2007). This value perception varies between customers, cultures, and times (Sánchez et al., 2006). Understanding how students value their HEI services and make decisions related to them will help practitioners implement an effective business and marketing strategy, particularly in HEIs.

In the last three decades, scholars believe that customers’ perceived value is a direct predictor of purchase intention and behaviours in any business (Alzoubi et al., 2020; Dodds et al., 1991; Grewal et al., 1998; Novela et al., 2020; Yang et al., 2021) including in HEIs (Petruzzellis & Romanazzi, 2010; Russell, 2005). People who value a product or service will be likelier to purchase and repeat their buying behaviours. Customer value is a customer’s overall evaluation of a product’s utility based on perceptions of what is given and received (Zeithaml, 1988). Others also have defined perceived value as perceptions formed as a result of a customer’s comparison, assessment, or perception of a product’s benefits (e.g., quality) and the sacrifice to acquire the product, such as the amount of money (Dumond, 2000; Li et al., 2021; Oh & Jeong, 2004; Zhang et al., 2019). In HEIs, the university education’s value will be high as the students perceive that the benefits outweigh the cost of service or product (Li et al., 2021; Zhang et al., 2019).

Recent studies have focused on the antecedents and outcomes of customer-perceived value. For instance, environmental conscientiousness (Gadeikiene & Svarcaite, 2021), environmental stimuli (Yang et al., 2021), and self-concept (Yang et al., 2021) determine customer perceived value. On the other hand, perceived value is a significant predictor of the purchase intention (Hsiung & Lee, 2021; Novela et al., 2020; Yoshihiro et al., 2019) and perceived trust (Sharma & Klein, 2020), and purchase decision (Adirinekso et al., 2020). This makes the perceived value a vital element in improving the quality of HEIs and further helps develop the university business model. Unfortunately, customer perceived value is a subjective experience and depends on many subjective factors (Monroe, 1973; Oh & Jeong, 2004; Sánchez-Fernández & Iniesta-Bonillo, 2007).

Considering the above discussion, this study intends to advance the literature on customer behaviours by investigating antecedents and factors affecting the mechanism of perceived value in HEIs. Most studies in this area merely focused on predictors or consequences of perceived value while ignoring the influence of context in shaping customers’ perceived value (Mbango, 2019; Stollery & Jun, 2017). The interactions between predictors and customers’ awareness of the contexts have not been fully addressed by researchers. Therefore, investigating the antecedents of perceived value and how these antecedents interact with customers’ awareness of the critical incidents may illuminate our understanding of perceived value.

Perceived service quality has become one factor that strongly determines customers’ perceived value (Barrutia & Gilsanz, 2013; Gómez-Carmona et al., 2022; Li et al., 2022; Marcos & Coelho, 2022; Shin et al., 2019;). In service organisations, service quality means meeting the expectations and preferences of customers, in which the quality standard can be subjective and involve experiential states of mind (Farmer, 1988). Customers tend to purchase as they experience a high-quality service. Following Zeithaml’s (1988) notion about customer value, customers will increase their purchase value when the service outweighs the price of the product or service.

Although the association between service quality and perceived value is also plausible in the HEI context (Kuo et al., 2009), empirical studies are still necessary to understand how students in HEIs perceive the quality of education and its subsequent impact on their perceived value. Unfortunately, evidence related to the antecedents of customer perceived value in service sectors (e.g., higher education) is still scarce (Sánchez-Fernández & Iniesta-Bonillo, 2007; Zauner et al., 2015). Prior research on the potential antecedents of customer perceived value has centred mainly on popular factors such as quality, cost, or sacrifices (Gallarza et al., 2011; Sweeney et al., 1999), and the role of the organisational and contextual factors still receives less attention (de Matos et al., 2012; Jha & Balaji, 2015; Sengupta et al., 2015).

Considering the above gap, this study proposes that students’ perception of organisational justice in HEIs influences their perceived service quality and value. In terms of organisational justice in HEIs, students can actively assess the quality of the service and judge whether the cost of the service is fair (Alzoubi et al., 2020; Oldfield & Baron, 2000; Russell, 2005). Like other customers, students judge the quality and value based on perceptions of “justice” or price fairness, and their perceptions are likely to influence purchasing decisions (Oh, 2000). Price fairness is the customers’ assessment of a given cost related to the product’s quality (Oh & Jeong, 2004).

Justice determines how customers perceive the value of a product or service (Oh & Jeong, 2004). Customers do not judge prices in isolation but rather in comparison to some reference price or price range (Monroe & Lee, 1999). In this case, a customer might judge “justice” by comparing the price or sacrifice with other references, such as other customers’ benefits (e.g., additional services) and their previous purchases. Thus, justice perception is vital in understanding how customers perceive the quality and value of their purchases (Carr, 2007).

Justice becomes a crucial aspect of public service sectors and is challenging to control (Goudarzvandchegini et al., 2011; Ince & Gül, 2011; Jang et al., 2021). Even slight differences between customers could be perceived as unfair treatment because they tend to compare themselves with others (Monroe & Lee, 1999). This customer’s perception of justice is based on distributive, procedural, and interactional justice, and these dimensions influence the quality of the service handling (Endris, 2013; Tax et al., 1998).

Based on the above argument, students in HEIs evaluate and assess whether their HEI has fulfilled its obligation to deliver its promised results and benefits. Higher education performs academic services to satisfy students’ needs in learning and fostering their skills. HEIs develop certain organisational designs to align their aims in managing academic services. For example, they assign some positions (e.g., head of school) to manage academic services and monitor student performance. They intend to improve academic services while maintaining students’ satisfaction. The value of HEIs’ academic services relies on the quality of services delivered to their students.

Unlike manufacturing firms, where the buyers are rarely present during production, customers in service organisations (e.g., patients in hospitals or students in university) are always physically present, involved in employees’ interactions, and even constitute the organisations’ human resources (Bowen, 1986). Therefore, students in HEIs may immediately experience and perceive organisational justice like academic staff and lecturers. In this circumstance, organisational justice is experienced not only by employees but also customers, which later interferes with the customers’ attitudes and behaviours (Masterson, 2001). Although students as the customers in HEIs can also perceive organisational justice and the equity theory has been used to explain justice in an organisation (Greenberg, 1990; Tax et al., 1998), little is known about how students’ perception of organisational justice influences service quality and perceived value in HEIs.

Concerning perceived organisational justice, students are viewed as customers who proactively engage in HEI services (Guilbault, 2016). Many factors influence students’ perceived organisational justice in HEIs. Unlike private universities and most universities around the world, public universities in Indonesia have implemented a single-tuition fee for undergraduate students where the universities must determine the amount of the tuition fee for each student using the student’s economic status, family income, and other related criteria (Sumitro et al., 2017). The government implements this policy to ensure all students have equal access to public universities regardless of family income or socioeconomic status. The new students and their parents (or guardians) are interviewed, and their backgrounds are evaluated to determine their tuition levels. Unfortunately, although some advanced methods have been implemented to determine the fairest tuition fee (Karim et al., 2017; Muchsin & Sudarma, 2015), some students still complain about the fee and services (Yanni, 2018). Therefore, examining factors determining the students’ perceived organisational justice is also crucial.

While organisational justice influences service quality and value of services, the COVID-19 outbreak has unwittingly influenced how customers perceive and behave toward products or services (Ariffin et al., 2018; Seong & Hong, 2021; Yu et al., 2021). As students are aware of the COVID-19 situation, they also learn how academic services adapt during the crisis. This awareness of COVID-19 refers to personal understanding and knowledge related to the (1) dangers and efforts to avoid COVID-19, (2) the symptoms of COVID-19, and (3) prevention and treatment of COVID-19 (Chang & Dibb, 2012; Mukhlis et al., 2021).

Drawing from the situation awareness theory (Endsley, 1988, 1995), a crisis potentially changes customers’ perception towards a service. During a crisis, everyone in an organisation, including its customers, will implement some adjustments (Ariffin et al., 2018; Fusté-Forné & Filimon, 2021). HEIs worldwide were forced to adapt their services following the COVID-19 outbreak (Almaiah et al., 2022; Camilleri & Camilleri, 2022; Iqbal et al., 2022). The COVID-19 crisis potentially increases students’ awareness of the crisis and might change how they perceive HEI services (Labban et al., 2020). Understanding how this crisis determines students’ perceived organisational justice, service quality, and value will advance our understanding of customers’ behaviours in service sectors.

This phenomenon is more likely to emerge outside the major cities in Java, Indonesia. The socio-economic disparity between western and eastern Indonesia still exists (Azzizah, 2015; Nugraha & Prayitno, 2020), and many students and their families expect high-quality higher education with affordable tuition fees. Their perception of fairness, services, and the value of education could be distinct from those who live in the western region with many well-developed cities such as Jakarta. Therefore, examining students’ perceived value from the eastern part of Indonesia will advance the literature on the perceived value of HEI. Understanding the value of HEIs will provide information related to the development of policies and strategies in HEIs.

Given the importance of understanding the antecedents, context, and mechanism that explain the perceived value of HEI, this study aims to investigate the role of perceived organisational justice and service quality on students’ perceived value at different levels of students’ awareness of COVID-19 in Indonesian public universities.

Literature review and hypotheses

The effect of organisational justice

Empirical findings on this study’s theoretical model have been well established in management and organisational behaviours. Organisational justice is one of the important predictors of consumer behaviours (Di et al., 2010; Hornibrook et al., 2009; Matopoulos et al., 2019). Justice in managing organisation helps customers assess the quality of services and products, which later can improve the value associated with the products or services (Alzoubi et al., 2020; Dlačić et al., 2014; Gumussoy & Koseoglu, 2016).

Drawing on these empirical studies, university organisational justice potentially improves students’ perceived value by increasing service quality. Some studies have indicated that students of HEIs also actively evaluate the university organisational justice, and it influences how they perceive university service quality and value related to their education (Chaudhary & Dey, 2021; de Azambuja et al., 2021; Dollinger & Lodge, 2020; Nguyen et al., 2021). However, empirical evidence is still lacking on how university organisational justice, directly and indirectly, influences students’ perceived value.

University organisational justice can improve students’ perceived value through service quality. Justice in service can improve the quality of service and further nurture the perception of HEI value. As mentioned earlier, recent empirical findings have endorsed the importance of justice in managing service (Alzoubi et al., 2020; Dlačić et al., 2014; Gumussoy & Koseoglu, 2016). Unfortunately, the mechanism in which justice and service quality influence perceived value in HEIs still needs further investigation. Hence, literature in this area could have discarded how perceptions of justice and quality interact with the situational factor or context in which the service occurs. Therefore, the service context should be incorporated into the mechanism of service and value in HEI.

To further establish a robust theoretical model, this study employs the fairness service perspective, social exchange theory, and situation awareness theory in developing the study’s conceptual model. Fairness service or FAIRSERV (Carr, 2007) was in line with the equity theory (Adams, 1963). They both contend that comparing services to norms of fairness and treatment yields an essential set of service evaluations that also applies in the HEI context. Students compare their treatments with other students, such as how education services are priced and distributed among different students. They may feel betrayed if they make more tremendous sacrifices than others for a similar benefit or service.

Organisational justice refers to individual perceptions about how fair the organisation’s treatments are (Greenberg, 1990). The dimensions include procedural justice, distributive justice, interpersonal justice, and informational justice (Colquitt, 2001), and these have been used to study fairness in services (Tax et al., 1998; Yi & Gong, 2008). Procedural justice refers to the perception of fairness in the process and method of making organisational decisions. Distributive justice concerns the perception of fairness of outcomes, rewards, benefits or resources within the organisation. Interpersonal justice is the perception of fairness in interpersonal treatment and relationships, and informational justice can be defined as the perception of fairness in providing information which also includes transparency and accuracy. According to Carr (2007), these dimensions explain that customers want the procedures to be reliable, not preferring one person or group over the other. They also expect to be treated with civility and politeness. Finally, service customers want to be informed about the services they receive.

Drawing from the FAIRSERV perspective, the perception of quality service depends not only on the service itself but also on how fair customers perceive the fair treatment from the organisation in delivering the service. Customer-perceived service quality and value are based on fair customer treatment (Oh, 2000; Oh & Jeong, 2004). Theoretically, students of HEIs might perceive injustice once they believe the university performs unfair treatment by referring other students to prices or facilities. In Indonesia, despite some policies and regulations to ensure fair prices and services, complaints were still found (Purnomo & Saifullah, 2022; Yanni, 2018). Once they perceive injustice in services, they will immediately perceive that the university has delivered poor services. This unfair service can also harm the students’ perceived value as they discover that the services provided by the university are unfair. Unfair services will represent the service product, leading students to perceive less value in the services. Considering the above theoretical perspectives, the first and second hypotheses will be:

Hypothesis 1: students’ perceived organisational justice will positively contribute to perceived service quality.

Hypothesis 2: students’ perceived organisational justice will positively contribute to perceived value.

Social exchange theory (Blau, 2017; Homans, 1958) and perspectives (Adams, 1965; Cropanzano & Mitchell, 2005; Ferrell & Zey-Ferrell, 1977) posit that human social behaviour results from a series of exchanges. The goal of this exchange is to achieve maximum benefits while minimising costs. This theory proposes that people weigh their social relationships’ potential advantages and disadvantages and value each interaction’s cost and benefits to determine whether they continue the social relationship. People will end a relationship when the costs outweigh the benefits. Most relationships involve some degree of a give-and-take principle, but it is not always equal.

Social exchange in marketing must include social and economic exchange features where people maximise purchase values and minimise sacrifices (Ferrell & Zey-Ferrell, 1977). Customers compare the benefits of services (or products) against their sacrifices (Dumond, 2000; Li et al., 2021; Oh & Jeong, 2004; Zhang et al., 2019). Drawing from the social exchange perspectives, students will be more likely to value products as they receive more benefits with fewer costs. They will continue the social and economic exchanges if they perceive the services or products are valuable. Service quality is an advantage for students who engage in economic exchange. If they perceive a high quality of services, the value of the products or services will also increase. Consequently, service quality can increase the customers’ perceived value (Barrutia & Gilsanz, 2013; Shin et al., 2019; Vera & Trujillo, 2013). This leads to the following hypothesis:

Hypothesis 3: students’ perceived service quality will positively predict the perceived value of HEI services.

As proposed earlier, the perceived service quality depends on how fair the organisation treats the customers. This includes ensuring justice in delivering service products. As university organisational justice improves, students will perceive high service standards and increase perceived value. Also, university organisational justice in delivering services can directly increase the value of the service product, consequently improving the students’ perceived value. This leads to the following hypothesis:

• Hypothesis 4: Service quality partially mediates the indirect effect of university organisational justice on students’ perceived value.

The moderating role of awareness of COVID-19

COVID-19 has changed human interactions and encouraged the use of many communication technologies to avoid direct contact. Regarding customer behaviours, COVID-19 has influenced how people value goods, services and their purchasing behaviours (Almunawar & Anshari, 2022; Kim et al., 2022; Zvarikova et al., 2022). People become more aware of critical situations during the pandemic, and some precautions must be taken to anticipate unprecedented outcomes (Singh et al., 2023). Given these empirical findings, awareness of COVID-19 among students potentially introduces some changes in how they perceive justice, quality, and value of their HEI.

Research related to COVID-19 has centred around mental health issues such as stress and well-being (Zabelina et al., 2021; Zhang et al., 2021). Evidence has supported that COVID-19 causes some adverse impacts on mental health in various sectors (Cullen et al., 2020; Singh et al., 2020; Zhang et al., 2021). However, awareness of COVID-19 has not been fully explored in business, particularly how this variable impacts customers’ perceptions. Organisational justice and service quality may be influenced by customers’ awareness of the COVID-19 crisis. Therefore, considering students’ awareness of COVID-19 can illuminate our understanding of how a contextual factor influences the dynamic of perceived value in HEIs.

The moderating role of awareness of COVID-19 can be explained using the situation awareness theory (Endsley, 1995). Endsley (1995) proposed that situation awareness is the perception of the elements in the environment within a volume of time and space, the comprehension of their meaning, and the projection of their status. Situation awareness involves (1) perceiving critical factors in the environment, (2) understanding those factors concerning goals, and (3) understanding what will happen in the near future (Endsley, 1988, 1995). Individuals can develop expectations about future events and integrate new information with the initial one (Endsley, 1995, 2015). Based on the situation in the environment, individuals change their perceptions, attitudes, and behaviours to match their goals (Endsley, 1995).

According to this theory, emotions and perceptions are influenced by specific environmental events. The environment indirectly influences affective experience by making certain events real or imagined (Weiss & Cropanzano, 1996). Threatening events such as the COVID-19 outbreak can produce strong physiological, cognitive, emotional, and social responses (Taylor, 1991). Therefore, awareness of COVID-19 plausibly changes individual perceptions, attitudes, and behaviours (Mukhlis et al., 2021) as they perceive the emergence of threats in the environment. This situation might change their expectations, and actions should be modified to match future goals.

Similarly, students’ perceived organisational justice might change as they receive new information concerning the COVID-19 crisis. Some studies show that students can adapt their learning mode during the COVID-19 crisis and regulate their responses (Jia et al., 2021; Neuwirth et al., 2021; Suleri, 2020; Tang et al., 2021). Following the situation awareness theory, they are more likely to change their expectations and perceptions of university organisational justice if they know the situation. Awareness of the crisis might lower their expectations because they understand that some factors could interfere with the elements related to the university’s goals. If this occurs, students might tolerate some university’s failures in delivering academic services and acknowledge more organisation efforts in delivering services. The university’s fair services are more accentuated as the students are aware of the challenges of delivering academic services during the COVID-19 crisis. Thus, being aware of COVID-19 will accentuate the effect of students’ perceived organisational justice on service quality. The following hypothesis will be:

Hypothesis 5: The positive effect of students’ perceived organisational justice on service quality will be moderated by the awareness of COVID-19. The effect will be stronger for those with high awareness of COVID-19 than those with low awareness of COVID-19.

Following the situation awareness theory, students’ expectations of service quality might also change as they know about the COVID-19 crisis. Adverse events elicit more cognitive processes for encoding and recalling specific information (Taylor, 1991). Students can be more aware of the academic services and efforts to perform them when encountering an adverse event (i.e., COVID-19). As they are aware of the university’s sacrifices in delivering services in a COVID-19 situation, their expectations about the quality of the service products will be changed. In this circumstance, they tend to recognise efforts to deliver services, consequently increasing the perception of value. This leads to the following hypothesis:

Hypothesis 6: The positive effect of service quality on customers’ perceived value will be moderated by the awareness of COVID-19. The effect will be stronger for those with high awareness of COVID-19 than those with low awareness of COVID-19.

Following the above theoretical arguments, university organisational justice will positively influence service quality and increase students’ perceived value. In addition, students’ awareness of COVID-19 can accentuate the perception of justice and service quality. The awareness of adverse events (i.e., COVID-19) will change students’ perceptions and encourage them to acknowledge the organisation’s sacrifices and efforts in delivering fair and quality services. This leads to the last hypothesis:

Hypothesis 7: The indirect positive effect of students’ perceived university organisational justice on perceived value via the role of service quality is moderated by students’ awareness of COVID-19 with double effects. The effect will be stronger for students with high than those with low awareness of COVID-19.

Method

Participants

This study was conducted in conjunction with the public university evaluation program. Three public universities in South Sulawesi in Indonesia ran an evaluation program that included evaluations related to the students’ perceptions of tuition fees and higher education services. According to information retrieved from each university’s webpage, more than thirty thousand students enrolled in these universities when the study was conducted. A week before the survey was sent, the first author advertised the study via the university’s virtual groups, emails to department heads, and student associations in each faculty and department. There were 517 usable responses after removing 272 students who did not complete the survey or failed the attention check questions. Participant age ranged from 16 to 29 (M = 18.81, SD = 1.36), 56.3% of participants were female, and many came from a middle-lower socio-economic status (59%).

Measures

This study employed organisational justice, awareness of COVID-19, service quality, and customer’s perceived value scale to measure students’ perception of (the university’s) organisational justice, students’ awareness of COVID-19, perceived service quality, and perceived value of higher education services, respectively. Except for the awareness of the COVID-19 scale, all scales were initially developed in English and adapted into Bahasa Indonesia using a systematic translation and back-translation procedure (Brislin, 1970). The scale instructions and items were adapted to match the student and higher education context. The following will explain more details about the measures:

Organisational justice scale

Students’ perception of university organisational justice was measured using the organisational justice scale (Colquitt, 2001). This scale had 20 items with four dimensions (i.e., procedural, distributive, interpersonal, and informational justice). The scale was administered using Likert-type options (1 = never to 5 = always). This scale was highly reliable, with an inter-item Cronbach’s alpha of .93. Results from the Confirmatory Factor Analysis (CFA) supported the original four-factor solution of the scale (RMSEA = .06, SRMR = .06, CFI = .97, TLI = .96, and GFI = .97). One of the items was, “Have you been able to express your views and feelings concerning the academic services?”

Awareness of COVID-19

A 15-item awareness of COVID-19 (Mukhlis et al., 2021) was used to measure the students’ awareness of the COVID-19 situation. This unidimensional scale was administered using a five-point Likert-type scale (1 = strongly disagree to 5 = strongly agree). The scale was highly reliable, with an inter-item Cronbach’s alpha of .97. The CFA analysis supported the original one-factor solution (RMSEA = .09, SRMR = .05, CFI = .90, TLI = .90, and GFI = .90). “I am aware that the COVID-19 virus is dangerous” was one of the items.

Service quality

The service quality (Servqual) scale (Parasuraman et al., 1988) was used to measure the university’s students’ perception of academic service quality. The scale had 22 items, and the construct was unidimensional. The administration used a five-point Likert-type scale with options ranging from 1 (strongly disagree) to 5 (strongly agree). The scale’s reliability was considerably high, with an inter-item Cronbach’s alpha of .97. The CFA analysis supported the original one-factor solution (RMSEA = .08, SRMR = .09, CFI = .96, TLI = .95, and GFI = .93). “This university has up-to-date equipment” was one of the items.

Students’ perceived value

A 19-item customer perceived value scale from Sweeney and Soutar (2001) with four dimensions (i.e., quality, emotional, price, and social) was used to measure the students’ perception of the educational service value in the university. The scale was administered using a seven-point Likert-type scale with options ranging from 1 (strongly disagree) to 7 (strongly agree). The reliability was considerably high with inter-item Cronbach’s alpha of .94. The CFA analysis supported the original four-factor solution (RMSEA = .07, SRMR = .06, CFI = .96, TLI = .95, and GFI = .93). One of the items was “(the university’s academic services) has an acceptable standard of quality.”

Demographic and attention check questions

This study also collected students’ demographic variables, including age, gender, number of semesters, Grade Point Average (GPA), and family monthly income. Two attention check items were randomly inserted (e.g. if you read and understand this, please select strongly agree) to eliminate careless responses in the online data collection (Huang et al., 2012; Meade & Craig, 2012). Participants who failed one of the attention-check questions, their responses were excluded from the analysis.

Data collection procedure

This study employed a convenient sampling technique where students voluntarily participated in this study. Participants were asked to register for the study before receiving an online survey link. This study employed a three-wave data collection method to reduce the effect of the common method bias (Podsakoff et al., 2003). Collecting data using a multi-wave technique has some benefits, including allowing researchers to examine the theoretical model in a longitudinal design and document changes in the study where possible. It also helps rule out confounding factors related to the temporal bias due to measuring different variables simultaneously. This remedy has been endorsed by some researchers in the management (MacKenzie & Podsakoff, 2012; Rodríguez-Ardura & Meseguer-Artola, 2020).

To match participant responses in each survey, a unique identifier (e.g., 12034) was automatically generated and given in the first survey. Participants had to use the identifier each time they logon to the survey. Around eight thousand students responded to the advertisement, but only 789 participants completed the first wave of data collection, which included initial demographic information (e.g., gender). Two weeks later, a survey link was sent to these participants to complete university organisational justice, service quality, and awareness of the COVID-19 scale. Six hundred fifty students completed the second wave of the survey. Two weeks after the second wave, they were given the last survey link containing customers’ perceived value scale. This study design and procedure had been reviewed, and ethical clearance was approved by the Research Ethics Committee from the first author’s institution.

Results

Descriptive statistics and bivariate correlations

This study used IBM SPSS and AMOS version 26 to analyse data. Table 1 shows the descriptive statistics and bivariate correlations between variables in the study. As expected, the association between university organisational justice and service quality (r = .24, p < .001) and university organisational justice and students’ perceived value (r = .51, p < .001) were positive and significant. Awareness of COVID-19 was positively correlated with service quality (r = .39, p < .001) but not with university organisational justice and students’ perceived value. These findings supported the idea that increased perceived organisational justice was positively associated with students’ perception of service quality and value. Students who perceived that their institutions performed fair services tended to perceive high service quality and HEI value. In terms of awareness of COVID-19, the results suggested that older students could have developed higher awareness of COVID-19 (r = .12, p < .01). Students with high income tended to perceive low organisational justice (r = -.09, p < .05), but high awareness of COVID-19 (r = .10, p < .05). Also, students with high GPA had a high awareness of COVID-19 (r = .16, p < .05). The awareness of COVID-19 might vary among students. Their age and academic achievement could influence their awareness. Lastly, the correlations between demographics and the focal variables were mostly less than r = .20 or considerably weak.

Table 1. Descriptive statistics and bivariate correlations.

Variable	Mean	SD	1	2	3	4	5	6	7	8	9
1. Age	18.81	1.36	–
2. Gender	.14	.34	.07	–
3. Semester	2.27	2.00	.71***	−.07	–
4. GPA	1.40	1.74	.54***	−.10*	.73***	–
5. Income	1.41	.77	.06	.11*	.15***	.04	–
6. UOJ	79.07	10.89	−.03	−.08	−.06	.02	−.09*	(.66)
7. AoC	50.50	14.97	.12**	−.11*	.08	.09*	.09*	−.01	(.82)
8. SQ	75.91	16.60	−.02	−.16***	−.01	.03	−.02	.25***	.37***	(.78)
9. SPV	101.71	13.94	−.11*	−.01	−.12**	−.04	−.09*	.53***	.05	.34***	(.71)

Note: N = 517, *p < .05, **p < .01, ***p < .001.

Gender (0 = female, 1 = male), income (category 1 = 1.4 or less, 2 = 2.8 or less, 3 = 5.6 or less, 4 = 7 or less, 5 = 10 or less, and 6 = above 10 [in million rupiah]), GPA (0 to 4), semester (maximum 14), M = mean, SD = standard deviation, UOJ = university organisational justice, AoC = awareness of Covid-19, SQ = service quality, SPV = students’ perceived value, discriminant validity (DV) is presented in the diagonal.

Source: Authors (2023).

Measurement model analysis

The conceptual model was examined before the hypotheses were tested. The measurement model was analysed using the CFA technique. In the first attempt, the proposed measurement model (i.e., university organisational justice, awareness of COVID-19, service quality, and students’ perceived value) contained several items with factor loadings lower than .40 and even negative. To improve the model, those items were dropped (see Table 2). Then, the model was re-examined against two alternative models. The proposed measurement model yielded a better fit (CMIN/df = 3.7, RMSEA = .07, CFI = .88, TLI = .80, and GFI = .90) than the two-factor (CMIN/df = 7.75, RMSEA = .11, CFI = .53, TLI = .52, and GFI = .53) and one-factor solution (CMIN/df = 10.49, RMSEA = .13, CFI = .34, TLI = .32, and GFI = .31).

Table 2. Factor loadings, average variance extracted (AVE), composite reliability (CR), and Cronbach’s alpha for each measure in the proposed measurement model.

Dimension	Item number	Loading	AVE	CR	Cronbach α
University Organizational Justice
Distributive Justice	OJ_DIS_8	.51	.45	.86	.93
	OJ_DIS_9	.51
	OJ_DIS_10	.54
	OJ_DIS_11	.50
Informational Justice	OJ_INF_16	.73
	OJ_INF_17	.79
	OJ_INF_18	.80
	OJ_INF_19	.76
	OJ_INF_20	.78
Interpersonal Justice	OJ_INT_12	.77
	OJ_INT_13	.76
	OJ_INT_14	.78
	OJ_INT_15	.61
Procedural Justice	OJ_PRO_1	.15 (Dropped)
	OJ_PRO_2	−.05 (Dropped)
	OJ_PRO_3	.57
	OJ_PRO_4	.49
	OJ_PRO_5	.61
	OJ_PRO_6	.17 (Dropped)
	OJ_PRO_7	.59
Service Quality
N/A	SQI_1	.84	.61	.95	.97
	SQI_2	.84
	SQI_3	.89
	SQI_4	.88
	SQI_5	.80
	SQI_6	.73
	SQI_7	.91
	SQI_8	.87
	SQI_9	.89
	SQI_10	.23 (Dropped)
	SQI_11R	.50
	SQI_12R	.72
	SQI_13	.30 (Dropped)
	SQI_14	.82
	SQI_15	.82
	SQI_16	.89
	SQI_17	.89
	SQI_18R	.47
	SQI_19R	.52
	SQI_20R	.35 (Dropped)
	SQI_21	.30 (Dropped)
	SQI_22R	.57
Students’ Perceived Value
Quality	CPV_Q_1	.67	.50	.89	.94
	CPV_Q_2	.70
	CPV_Q_3	.71
	CPV_Q_4R	.35 (Dropped)
	CPV_Q_5R	.33 (Dropped)
Price	CPV_Q_6	.68
	CPV_P_13	.63
	CPV_P_14	.70
	CPV_P_15	.74
Emotional	CPV_E_7	.59
	CPV_E_8	.36 (Dropped)
	CPV_E_9	.73
	CPV_E_10	.82
	CPV_E_11	.78
Social	CPV_S_16	.78
	CPV_S_17	.65
	CPV_S_18	.76
	CPV_S_19	.76
Awareness of Covid
N/A	AOC_1	.83	.67	.95	.97
	AOC_2	.85
	AOC_3	.86
	AOC_4	.78
	AOC_5	.89
	AOC_6	.85
	AOC_7	.70
	AOC_8	.71
	AOC_9	.55
	AOC_10	.86
	AOC_11	.91
	AOC_12	.90
	AOC_13	.91
	AOC_14	.80
	AOC_15	−.40 (Dropped)

Source: Authors (2023).

Also, the Average Variance Extracted (AVE) of the proposed model ranged from .45 to .67, with Composite Reliability (CR) ranging from .86 to .95. The Discriminant Validity (DV) or the square root of AVE for each variable (ranging from .66 to .82) indicated higher coefficients than the correlations between focal variables in the study (see Table 1). After evaluating the above analysis, latent constructs, and measurement errors (Fornell & Larcker, 1981), the results supported the validity of the proposed measurement model. Figure 1 depicts this study’s measurement model.

Figure 1. Measurement model.

Hypothesis testing

Hypotheses were tested using a moderated-mediation regression technique model 58 (see Hayes, 2013) using PROCESS macro on IBM SPSS ver. 26. To reduce the effect of multicollinearity, the moderator variable was mean-centred before the interactions between the predictors and moderator were computed. Table 3 presents the results.

Table 3. Moderated-mediation model 58 using PROCESS by Hayes.

Model 1	Coefficient	SE	LLCI	ULCI	R	R^2
UOJ	.36***	.06	.25	.47	.48	.23***
AoC	−.35***	.04	.27	12.84
UOJ*AoC	.01***	.00	.01	.02
Outcome: Service Quality
Model 2
UOJ	.48***	.05	.39	.57	.57	.32***
SQ	.24*	.04	.17	.31
AoC	−.03	.03	−.09	.03
SQ*AoC	.01***	.00	.00	.01
Outcome: Students’ Perceived Value

Note: N = 517, *p < .05. **p < .01. ***p < .001.

UOJ = university organisational justice, AoC = awareness of Covid-19, SQ = service quality, SE = Standard Error, LLCI = 95% Lower-level confidence interval, and ULCI = 95% Upper-level confidence interval.

Source: Authors (2023).

The results suggested the direct effect of students’ perceived organisational justice on service quality (b = .36, SE = .06, 95% CI [.25–47]), supporting hypothesis 1. Similarly, university organisational justice (b = .48, SE = .05, 95% CI [.39–57]) and students’ perceived service quality (b = .24, SE = .04, 95% CI [.17–31]) positively predicted students’ perceived value (support for hypotheses 2 and 3). Since university organisational justice positively influenced service quality and consequently influenced students’ perceived value, the mediating effect of service quality was confirmed. This supported hypothesis 4. These results confirmed that perceiving university organisational justice increased students’ rating of service quality and further improved the value of HEIs. As proposed earlier, some significant predictors of perceived value in service existed. In HEI services, justice in delivering service and quality of service are two essential antecedents.

The moderating effect of awareness of COVID-19 was observed on the relationship between university organisational justice and service quality (b = .01, SE = .00, 95% CI [.01–.02]), and the conditional direct effect was also stronger for those with high awareness of COVID-19 (see Table 4). Similarly, the relationship between service quality and perceived value was significant (b = .01, SE = .00, 95% CI [.00–.01]), and the conditional effect was also stronger for those with high awareness of COVID-19 (see Table 4). These findings supported hypotheses 5 and 6. The moderating effects of awareness of COVID-19 were illustrated in Figures 2 and 3, respectively, and this study’s empirical model is presented in Figure 4.

Figure 2. The moderating effect of awareness of Covid-19 on university organisational justice and service quality relationship.

Figure 3. The moderating effect of awareness of COVID-19 on service quality and perceived value relationship.

Figure 4. Empirical model.

Table 4. Conditional effects at different levels of awareness of COVID-19 (AoC).

B	Effect	SE	LLCI	ULCI
1) Conditional direct effect of university organisational justice on service quality at different levels of AoC
Low	.15	.08	−.01	.31
Medium	.36	.06	.25	.47
High	.57	.08	.41	.74
2) Conditional direct effect of service quality on students’ perceived value at different levels of AoC
Low	.11	.04	.04	.18
Medium	.24	.04	.17	.31
High	.37	.05	.26	.47
3) Conditional indirect effect of university organisational justice on students’ perceived value at different levels of AoC
Low	.02	.01	.00	.05
Medium	.09	.02	.05	.14
High	.21	.05	.12	.32

Note: N = 517, *p < .05. **p < .01. ***p < .001.

SE = Standard Error, LLCI = 95% Lower-level confidence interval, ULCI = 95% Upper-level confidence interval.

The results also suggested the double effect of awareness of COVID-19 on the indirect effect of university organisational justice on students’ perceived value via service quality. The conditional indirect effect can be found in Table 4. The indirect effect was stronger for those with high awareness of COVID-19 (support for hypothesis 7). These findings have confirmed the importance of customers’ awareness of the context surrounding the services. Students’ awareness of COVID-19 strengthened the positive influence of university organisational justice on service quality and service quality on perceived value. Having a high awareness of critical situations, in this case, the COVID-19 pandemic could have highlighted university efforts to deliver fair services and emphasised some of the university’s service features. High students’ perceptions of justice and service quality improved students’ HEI values.

Discussion

This current study confirmed some previous empirical findings regarding the direct and indirect effect of organisational justice on service quality (Chandra et al., 2019; Konuk, 2019; Muskat et al., 2019) and customers’ perceived value (Alzoubi et al., 2020; Di et al., 2010; Hornibrook et al., 2009; Woodall et al., 2014). The results also indicated the partial mediating effect of service quality, which means university organisational justice could directly improve students’ perceived value or indirectly by improving perceived service quality among their students.

Secondly, the results suggested that students’ awareness of the COVID-19 crisis had a double moderating impact on university organisational justice and service quality. As students were aware of the COVID-19 crisis, they were more likely to notice the university’s fair treatment, which made the effect of university organisational justice on perceived service quality stronger. Also, students with high awareness of the COVID-19 crisis showed a stronger impact of service quality on perceived value. This study has confirmed previous findings where customers’ awareness of COVID-19 or other similar critical incidents could improve customers’ perceptions towards products or services, including services delivered by HEIs (Almaiah et al., 2022; Gómez-Carmona et al., 2022; M. Li et al., 2022; Sun et al., 2023; Wirawan et al., 2023). Customers actively evaluate the production and delivery process of their goods and services, and they are also aware of the challenges involved in delivering them.

Students in HEIs could have used their awareness about situations in evaluating academic services. Awareness of the COVID-19 crisis made them aware of the details and efforts related to the academic services that had accentuated the role of university organisational justice in service quality. Students appeared to understand the factors that could challenge the university in providing academic service. Thus, awareness of the COVID-19 situation magnified the perception of university organisational justice and consequently increased academic service quality.

Social exchange and reciprocal relationships between service providers and customers explain the association between service quality and the perceived value of the service (Ferrell & Zey-Ferrell, 1977). Individuals tend to evaluate the benefits and their sacrifices before perceiving the value of a service or product (Gómez-Carmona et al., 2022; Marcos & Coelho, 2022; Riva et al., 2022). Again, this evaluation is more complex than a simple transactional exchange between a provider and recipients because customers also consider the circumstances in which services are delivered.

In line with some previous findings (Barrutia & Gilsanz, 2013; Shin et al., 2019; Vera & Trujillo, 2013), this study found that students in higher education institutions also associated the quality of academic services with their perceived value. Students would perceive high value in academic services as they experience high academic service quality. Nevertheless, the relationship between service quality and students’ perceived value was determined by the students’ awareness of the COVID-19 crisis. This implies that students also evaluate other factors surrounding the quality of academic services. As the students are aware of the crisis, they are also aware of the details of the educational service process and realise the universities’ efforts to ensure quality. Thus, service quality will increase the students’ perceived value if they are aware of the COVID-19 crisis.

Nevertheless, some studies suggested different results. For example, Chavan et al. (2014) argued that students’ perception of service quality should not be used to evaluate the actual service in an educational setting. They may not fully understand the educational and services experience in the institutions. However, this study has introduced university organisational justice as a new antecedent of service and value of HEI. Students appeared to understand how academic services were designed and performed in their university. They also actively monitored a critical situation (i.e., COVID-19) that impacted academic services, making students’ perception of service quality a significant predictor of value in HEIs.

On the other hand, Morton et al. (2016) suggested that service frequency, availability, reliability and stability are the keys to services. However, these factors do not directly predict service quality and value as customers actively monitor other factors surrounding the services. In terms of HEI, students want to receive fair services while they still evaluate contexts and critical incidents impacting the delivery of services. Students’ perception of value might not be solely influenced by the academic service itself but rather by the interactions between service delivery and contexts.

Theoretical implications

According to the social exchange perspectives, people maximise their purchase values and minimise the costs associated with the purchase (Ferrell & Zey-Ferrell, 1977). Moreover, customers compare the benefits of a service (or product) against their sacrifices which later forms their perceived value towards a product or service (Dumond, 2000; Li et al., 2021; Oh & Jeong, 2004; Zhang et al., 2019). Furthermore, this current study has highlighted the role of other factors in this transactional exchange. Following the situation awareness theory (Endsley, 1995), the COVID-19 situation has changed customers’ references and perceptions as they discover new information related to the service’s context. Customers are capable of evaluating situations in their reciprocal relationship with service providers and potentially changing their perceptions accordingly. Thus, fairness and service quality are vital components in business value, but customers are aware of struggles in delivering services in a critical situation such as COVID-19.

Although students are distinct from typical customers, they share some similar characteristics, particularly in understanding the justice, services, and value of HEI. As the students are aware of the crisis, they are more likely to change their perception and be more favourable towards the service providers. Perhaps, university reputation indices could provide initial information regarding the quality and value the university has to offer. However, students as customers in the university could reassess their perceived value in accordance with organisational justice dimensions (e.g., procedural), service quality, and critical incidents (e.g., COVID-19).

Practical implications

Firstly, this study has emphasised the importance of the situation in delivering services and maintaining business values among customers. In general, HEIs must adapt to the critical situation when managing services and ensure the services are fair. HEIs must re-evaluate the existing service protocols and make changes to respond to students’ demands.

Secondly, some customers are unique and form ways to evaluate business and services. Despite some similarities, students in HEIs are well-educated and distinct from other buyers. They can change their mind as new information is added to the process. Students aware of the crisis are more likely to notice the details of academic services and challenges. Thus, informing and educating customers (e.g., students) about the service process and progress, including challenges during a crisis, will help increase the effect of organisational justice on service quality and service quality on perceived value.

Thirdly, fair and high-quality service is a must in any industry. Unfortunately, the service procedures may change because of a critical situation such as COVID-19. Adapting to new services is difficult not only for the business but also the loyal customers. Students, as customers, do not have other alternatives, and they should be able to embrace the changes. Thus, when making changes or designing new policies, leaders in HEIs should involve their students, stakeholders, and continuously monitor the changes. By accepting the changes, they will perceive more fair services, increasing perceived value.

Limitations and future research directions

This study has identified some limitations. Firstly, the study was conducted in universities in the eastern part of Indonesia, and data were collected using a non-probability sampling technique. The findings must be cautiously generalised as some customers might show different attitudes and behaviours in different contexts. Future studies should investigate how this study’s findings apply in different contexts, such as hospitals, hotels, and transportation.

Secondly, crises or threats could elicit different responses for some customers. The COVID-19 crisis could have been interpreted as a threat for some people, depending on context, personality, or culture. Thus, future studies should consider other important factors, such as personality traits and cultural values, in examining service quality and perceived value.

Lastly, due to some university restrictions, this study could not collect data from different sources in the university (e.g., documents). Combining data from different sources would enlighten our understanding of the academic services and factors affecting the value of those services. Future studies should design a method that allows researchers to collaborate with higher education institutions and collect information from different sources.

Conclusion

Literature on customer behaviours has illuminated the importance of service quality on customers’ perceived value. Indirect predictors of perceived value, such as service fairness, have also been introduced in the literature. However, studies in this area have not fully discovered how antecedents of customers’ perceived value interact with service contexts to predict customers’ perceived value. This study contributes to the literature by examining how two predictors of perceived value in the HEI context interact with customers’ awareness of critical situations, in this case, COVID-19. Five hundred seventeen university students participated in this study through a multi-wave data collection procedure. They were recruited from three major public universities in eastern Indonesia. The results suggested that students’ awareness of COVID-19 moderated the indirect effect of university organisational justice on perceived value via service quality. As customers in HEIs, students actively evaluate the service process and consider additional information in evaluating and perceiving service value. Students’ awareness of COVID-19 could increase the indirect effect of university organisational justice on perceived value via service quality. While some scholars view economic exchanges as a typical seller-buyer and cost-benefit relationship, students in HEIs actively evaluate situational factors beyond benefits and costs, such as struggles and challenges in delivering academic services during a crisis. Therefore, HEIs should consider this idea and incorporate students’ perceived values in understanding customer behaviours and designing business strategies.

Ethical approval

All procedures performed in studies involving human participants were in accordance with the ethical standards of the institutional research committee (the ethical clearance was approved by the Research Committee of Institut Agama Islam Negeri Palopo) and with the 1964 Helsinki declaration and its later amendments or comparable ethical standards.

Informed consent

Informed consent was obtained from all participants in the study.

Disclosure statement

On behalf of all authors, the corresponding author states that there is no conflict of interest.

Data availability

The datasets generated during and/or analysed during the current study are not publicly available due to some restrictions but are available from the corresponding author on reasonable request.

Additional information

Funding

No funding was received to assist with the preparation of this manuscript.

Notes on contributors

Ahmad Syarief Iskandar

Ahmad Syarief Iskandar is an Associate Professor at the Faculty of Islamic Economic and Business, Institut Agama Islam Negeri Palopo, Sulawesi Selatan, Indonesia. He actively studies customer behaviours in many industries in Indonesia. Many of his works were based on his experiences in Islamic business practices.

Hillman Wirawan

Hillman Wirawan is a lecturer of Organizational Psychology at the Department of Psychology, Universitas Hasanuddin, Indonesia and a PhD candidate at the School of Psychology at Deakin University. His research centres around Ethical Leadership, Abusive Supervision, and Dark Personality Traits. Some of his works were published in reputable journals such as Human Resource Development International and Leadership and Organization Development Journal.

Rudi Salam

Rudi Salam is a lecturer at Universitas Negeri Makassar, Indonesia and a doctoral candidate at Universitas Brawijaya, Indonesia. He is currently studying Transformational Leadership in service industries and has published his works in high-impact journals, such as the International Journal of Public Sector Management.