Journal article
Centralized (CAM) Versus Decentralized Budgeting (RCM) Approaches in Implementing Public University Strategy
Journal of education finance, Vol.45(2), pp.172-197
09/01/2019
DOI: 10.1353/jef.2019.a751235
Abstract
This paper compares and critiques two budgeting models used at public universities: Central Administrative Management (CAM), and Resource Centered Management (RCM). These approaches represent alternative resource allocation methods: under CAM budgets are assigned centrally based primarily on allocation history, while RCM relies on decentralized rules and pricing mechanisms that react to current conditions. A primary question is: Do administrators possess the needed expertise and information to make informed budgetary decisions, or are decisions better executed in a decentralized manner, relying on "market-like" prices as guides?
Effective budgetary frameworks display the following features: 1) transparency; 2) ease of implementation; 3) predictability; 4) responsiveness; 5) alignment of incentives; 6) minimal influence costs; 7) economic efficiency; 8) equity; 9) internalizing private benefits and costs; 10) internalizing public benefits and costs, and 11) increasing revenue/reducing costs. Our assessment is that CAM is preferred for its ease of implementation, predictability, perceived fairness, and conceptual if not actual ability to deal with public benefits and costs. RCM has the advantages of transparency, ability to respond to changes in the environment, incentive alignment, reduction of influence costs, economic efficiency, internalizing private benefits, increasing revenue, and reducing costs. Neither model performs effectively unless there is a carefully developed vision and mission that set priorities.
Details
- Title: Subtitle
- Centralized (CAM) Versus Decentralized Budgeting (RCM) Approaches in Implementing Public University Strategy
- Creators
- Gary C. Fethke - University of IowaAndrew J. Policano - Univ Calif Irvine, Paul Merage Sch Business, Irvine, CA USA
- Resource Type
- Journal article
- Publication Details
- Journal of education finance, Vol.45(2), pp.172-197
- DOI
- 10.1353/jef.2019.a751235
- ISSN
- 0098-9495
- eISSN
- 1944-6470
- Publisher
- Univ Illinois Press
- Number of pages
- 26
- Language
- English
- Date published
- 09/01/2019
- Academic Unit
- Business Analytics
- Record Identifier
- 9984962550802771
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