Determinants of business student satisfaction and retention in higher education: applying Herzberg's two‐factor theory

Purpose This paper focuses on the determinants of student satisfaction and retention in a college or university that are assumed to impact students' college experience. Design/methodology/approach Using empirical data and Herzberg's two‐factor theory, a modified version of the questionnaire developed by Keaveney and Young was administered to approximately 160 undergraduate business students at a state university in South Central Pennsylvania. Using path analysis, the hypothesized effects were tested empirically by incorporating a comprehensive set of independent variables and self‐reported experiential assessments to predict experience, which in turn related to student satisfaction. Findings The results indicate that the path coefficients from faculty and classes to students' partial college experience are consistent with the assumption that these are key factors that influence student partial college experience. Also, the path coefficient from student partial college experience to satisfaction was consistent with Herzberg's two‐factor theory. In addition, students who have a positive college experience are more likely to be satisfied with the college or university than students who do not have a positive college experience. Research limitations/implications By focusing on antecedents of student satisfaction, colleges and universities can align their organizational structure, processes and procedures to become more customer‐oriented. Small sample size and self‐explicated retention data are the limitations of this study. Practical implications It is recommended in this study that the changing nature of the higher education marketplace encourages college administrators to apply the customer‐oriented principles that are used in profit‐making institutions. Originality/value Using a satisfaction model and a comprehensive set of independent variables and self‐reported experiential assessments to predict experience, this paper provides empirical findings to understand student satisfaction in higher education institutions.