Question

In the late 1980s and early 1990s, public universities discovered that they were no longer immune to the financial pressure faced by their sister private institutions and the rest of the American corporations. The budget cuts ran all over the country. When the budget ax arrived, the cuts almost never warned and its magnitude was sometimes amazing. State subsidies for some institutions decreased 40% or more. Most university administrators had only experienced budget increases, never cuts. In addition, setbacks generally occurred at the least opportune time: during the school year when contractual commitments to faculty and staff had been signed, the cards had been planned and students were enrolled and attending classes.

1. Should school management be "fair" with all those affected and institute a round of general cuts whenever the state announces another subsidy reduction?

2. If there are no overall program cuts, would you recommend more focused reductions, and, if so, what priorities would you establish to match expenses with utilities?

3. As these are generally not one-time cuts, how would you handle long-term and continuous reductions in budgets, which would last for years?

4. Should the decision-making process be downward (centralized in top managers) or bottom-up (participatory)? Why?

5. How should issues such as the mentality of protecting the territory, resistance to change and consensus building be handled?

Answer 1

1. Yes School management should be fair with all those affected and institute a round of general cuts whenever the state announces another subsidy reduction.

2. If there are no overall program cuts , i would recommend more focused reductions and following priorities i would establish to match expenses and utilities are

• Fees should be increase
• Staff salary increase with little rate
• Quality education should be provided

3.As these are generally not one time cuts , consistent policies should be adopted like fees increase policy, reduction in aviodable cost, increase in quality so that fees can be increased , this will handle long term and continuous reduction in budgets which would last for years.

4. Decision making process should be bottom up because at low level staff can feel the issues and raise the same to top level in very effective way.