When referring to institutions (companies, colleges, universities) is it correct to use third person plural (they)? The first time I've ever seen such a thing was years ago here. Recently in a test I was supposed to complete the following statement with a possessive pronoun:
(...) The London University is poised to take the action because a 'high percentage' of ________ Islamic students regards drinking as 'immoral' (...)
Based on above I used their, however the teacher claims the correct pronoun is its.
Am I correct about such rule? Is it correct (perhaps not obligated) to use third person plural in this(these) case(s)?
While a similar question covers companies, I'm asking for institutions in general. It does not fit the given example (University).