Privatization of Public Universities: How the Budget System Affects the Decision-Making Strategy of Deans

Abstract

In response to lower funding commitments, many public colleges and universities have elected to incorporate decentralized budgeting systems, one of which is Responsibility Center Management (RCM). As public institutions are becoming more dependent on tuition dollars because state appropriations are declining, deans have an increased responsibility as financial managers. With RCM, the leaders of the academic units have the freedom to make decisions which affect the process of generating funds to increase the sustainability of the programs. The purpose of this qualitative case study was to better understand the management strategy of deans when making financial decisions and how the financial budgeting system, centralized or decentralized, of the institution influences the decision-making process for deans, the agents acting as the financial managers of the schools and colleges. Deans at two Midwestern universities, one using RCM and one using a centralized budgeting system, were interviewed asking each participant questions regarding demographics, prioritization of initiatives when seeking additional funding not associated with state appropriations, and linking the mission of her or his school or college to decision-making processes. Two major findings emerged. First, the financial decisions made by deans operating in both budget systems were strikingly similar. Second, deans in a centralized budget system identified that there were more complexity and less autonomy when working with central administration in executing financial decisions because the dean must align the school's mission with the mission of the university while deans operating under an RCM system did not feel the pressure to directly align the mission of the school and the university. In addition, the study discovered that deans used a constructive model as a management strategy as outlined by Chafee (1983). [The dissertation citations contained here are published with the permission of ProQuest LLC. Further reproduction is prohibited without permission. Copies of dissertations may be obtained by Telephone [phone]. Web page: http://www.proquest.com/en-US/products/dissertations/individuals.shtml.]