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Responsibility Centered Management

This guide serves as a collection point for information pertaining to Responsibility Centered Management.

University-Wide Perspectives

Agostino, D. (1993). The impact of responsibility center management on communications departments. Journal of the Association for Communication Administration, (1), 23-26.
    This article discusses the impact of responsibility center management (RCM) on the communications departments in universities in the U.S. RCM has pointed out several problems with university fiscal planning which bear directly on communications programs. First, there is no budget provision for the planned replacement of expensive theater, telecommunications, or journalism equipment. Second, under RCM departments with auxiliary-type activities such as theater, a television station or student newspaper have difficulty taxing other credit-granting academic units for those contributions to community. The university needs these outreach and artistic activities to educate the students, to provide a cultural environment appealing to good scholars, and to strengthen those values embodied in the notion of a university. But RCM seems to leave these activities wholly in the external marketplace, often too small or too competitive a site.

Buckholdt, D. R. & Laczniak, G. R. (2005). Strengthening academic programs with proactive fiscal management and other innovative strategies. Academic Leadership, 3(1), 1-1.
    Macro (long-term) and micro (short-term) strategies that can be employed by academic leaders to manage finances and strengthen academic programs are presented. Macro strategies include formulating a cost methodology to track economic performance and expenses, conducting and implementing strategic planning, and instituting responsibility centered management. Micro strategies include eliminating institutes that do not contribute significantly to academic quality, controlling travel costs, and developing very specific guidelines for reviewing proposals for new academic programs.

Bugeja, M. J. (2012, May 29). Stamping out rubber-stamp collegiality. Chronicle of Higher Education.
    In the past year, public colleges and universities across the country have been shrinking degree programs and terminating personnel--including tenured professors--in an effort to cope with budget cuts in higher education. The situation is not confined to a handful of mismanaged public institutions, as in the past. It is a national phenomenon and the inevitable outcome of three trends that have been incubating now for a decade: (1) expanding curricula; (2) reduced legislative support; and (3) increased student debt. Academe needs a new budget model. But a model alone will not resolve the crisis as long as professors maintain a rubber-stamp culture that blithely expands course catalogs and degree programs. When budgets are stable, pedagogical expansion is not a problem. When budgets are unstable, administrators and trustees are forced to eliminate or consolidate programs to maintain overall quality and all-important academic rankings. But that expansion is the end of a long process of professorial niceties involving the creation of curricula. Faculty members, in part, are at fault for their willingness to approve too many new courses and degree programs without realistically assessing: (1) demand for the course or program; (2) impact on other programs in the institution (i.e., duplication); (3) complications involving scheduling and staffing; (4) effect on degree progress (especially four-year graduation rates); and (5) cost involving workload and personnel concerns. Administrators at the provost and presidential levels have unintentionally exacerbated the rubber-stamp culture by instituting budget models based on so-called responsibility-centered management (RCM). Promoted by the corporate world, RCM essentially operates on one concept: Reward revenue-generating activities, such as student credit hours. This author states that it is time to stamp out "rubber-stamp collegiality," and a good way to start is at the individual level. Professors should incorporate innovative or timely content in an existing course, such as a seminar or workshop, rather than propose new courses. Also, they should pretest demand for the course and document the students' interest for the department and college curriculum committees. In the end, a budget model that recognizes programs with timely graduation rates and rewards departments for streamlining the curriculum rather than for expanding it is needed. Professors can require fewer credits to earn a particular degree and give faculty senates and curriculum committees more power to avoid curricular duplication and expansion. Meanwhile, administrators, working in partnership with the senates and committees, can require "program responsibility statements," detailing the pedagogical territory of each department. All of that would go a long way toward ending course duplication across departments, reducing time to earn a degree (and thus, student debt loads), and restoring public faith in administrators' ability to manage state dollars wisely.

Carlson, S. (2015, February 13). Colleges 'unleash the deans' with decentralized budgets. Chronicle of Higher Education, 61, (22), A4-A6.
    The article discusses the use of the Responsibility Center Management (RCM) model for decentralized budgets by U.S. universities and colleges. Topics include the role of deans in an RCM budget process, the implementation of RCM as incentive-based budgeting at the University of Vermont (UVM), and a failed attempt to use RCM at Dominican University of California.

Cuillier, C. & Stoffle, C. J. (2011). Finding alternative sources of revenue. Journal of Library Administration, 51(7-8), 777-809.
    As state support dollars shrink at public research institutions, the University of Arizona (UA) Libraries—like others—have had to seek revenue from other sources. Cafés, for-credit courses, grants, and partnerships with athletics departments are just a few of the ways libraries are supplementing their budgets. This article gives an overview of revenue-generation ideas and issues to consider. At the UA Libraries, a student fee has been a significant source of funding and tips are offered here for getting a student fee approved. Finally, since funding shortages are likely to be an ongoing challenge, the importance of training and instruction in fundraising is emphasized. [ABSTRACT FROM AUTHOR]
Copyright of Journal of Library Administration is the property of Taylor & Francis Ltd and its content may not be copied or emailed to multiple sites or posted to a listserv without the copyright holder's express written permission. However, users may print, download, or email articles for individual use. This abstract may be abridged. No warranty is given about the accuracy of the copy. Users should refer to the original published version of the material for the full abstract. 

Dick, R. C. (1992). Prospective impact of responsibility center budgeting on communication and theatre programs: view from a state supported university. Annual Meeting of the Speech Communication Association Chicago, IL. (ED351723). ERIC.
    In response to the nationwide trend toward increased financial pressures and growing demands by state legislatures for accountability, several large universities (including Indiana University) have adopted various forms of "responsibility center budgeting" (RCB), which has fiscal implications for programs in speech communication and related disciplines. In responsibility center budgeting, part or all of tuition and sponsored research revenues are returned to a unit in direct proportion to what is earned. The large service role assumed by speech communication programs cannot be taken for granted, especially if the units being serviced will have a fiscal incentive in the future to offer their own courses. When costs of equipment are passed along to faculty consumers, a new budgetary perspective is gained. If a strictly dollar-and-cents mentality were to drive RCB, and credit hours were the sole measure of productivity, then many classes in speech communication (and other courses requiring small class sizes), would be in trouble. RCB could put co-curricular or intercollegiate programs in jeopardy, particularly if a center director were placed in a desperate financial situation. The matter of off-campus offerings can be resolved by assigning full academic credit to the department. Overall, despite the potential pitfalls of RCB, the implementation of the system during the early developmental years at Indiana University Indianapolis has suggested that it has the potential to serve as a prototype for helping state-supported institutions successfully meet the fiscal challenge of the 1990s and beyond. 

Harris, N. (2020). Academic deans reveal their leadership styles: Annual budgeting becomes an exercise in how authority is enacted. Planning for Higher Education, 48(4), 35-45.
    The article offers information on academic deans that are shaping the future of institutions. Topics include examines that several colleges and universities have replaced centralized, incremental budget models with decentralized, revenue-centered models; and considered that Responsibility Center Budgeting (RCB) and Responsibility Center Management (RCM), transfer budgetary authority from central administrators to deans.

Harris, N. F. (2020). Working together to lead the college to bigger and better things: Exploring the relationship between academic deans and senior administrative teams. New Directions for Higher Education, 2020(189), 41-55.
    This chapter examines an underexplored way in which deans enact their authority in Responsibility Center Budgeting (RCB)—mobilizing the expertise of administrators in their colleges to establish academic and budgetary priorities. The findings underscore the benefits of deans harnessing the expertise of their senior administrative teams to make sense of complex issues and problems.

Hensley, P. A., et al. (2001). Responsibility center management: A financial paradigm and alternative to decentralized budgeting. (ED455723). ERIC.
    This study examined the implementation of Responsibility Center Management (RCM) systems in two institutions of higher education: the Graduate School of Business at Institution and the Center of Collaborative Education and Professional Studies at Institution B. RCM is a management and budgeting process for universities that decentralizes authority and responsibility to academic and support centers. Twelve interviews were conducted with one provost and one Chief Financial Officer from each institution and one dean and three faculty members from each school. Their interview responses were subjected to content analysis. All the administrators at each institution were strongly in favor of RCM, which they regarded as a method of continuing strong central guidelines while decentralizing operations, increasing understanding and awareness of costs, and enabling deans to manage income and expenditures better at their schools and centers. Faculty members praised the decentralization and rationality of RCM, but five of the six voiced concerns about the dean's accountability and their individual management styles. There was consensus on both campuses that RCM was more flexible and more rational than traditional fiscal management. Two senior faculty and the six administrators thought that RCM increased information flow and expanded the number of participants in the decision making process. Four of six faculty members thought that academic quality might be hurt because of financially motivated decisions. Faculty members were aware of the difficulties in achieving a proper balance in RCM. Overall, respondents did not advocate RSM as a panacea, but they did consider it an effective planning tool.

Hollihan, T. A. (1993). Revenue centered budgeting at USC: The implications for communication studies. Journal of the Association for Communication Administration (JACA), 1, 11-15.
    Describes the system of revenue-centered budgeting at the University of Southern California and how it has benefited some academic units and penalized others.

Jessup, L. (2015). The RCM switch. BizEd, 14(1), 41-41.
    The article offers advice from Dean Len Jessup at the University of Arizona on What it take to convert a university's financial system to a responsibility-centered management (RCM) financial model.

Jessup, L. &  Kesner, I. (2015). Better measure: majors or credit hours? BizEd, 14(1), 41-41.
    The article discusses responsibility-centered management financial model for business schools and how it gives the school more authority and responsibility to control its own finance.

Kesner, I. & Popoff, F. (2015). Reaping rewards from RCM. BizEd, 14(1), 40-41.
    The article discusses the views of Idalene Kesner, dean and Frank P. Popoff, Chair of Strategic Management at Indiana University's Kelley School of Business in Bloomington. Kesner and Popoff discuss financial model of the school. Topics discussed include responsibility-centered management financial model; how it give the school more authority and responsibility to control its own finance; and it allows the school to accumulate resources, make investments, and plan for the school's future.

Lees, N. D. (2017).  A flexible, incentivized department budgeting system in a responsibility-centered management environment. Department Chair, 27(4), 24-25.
    IUPUI implemented Responsibility-Centered Management as a way to decentralize unit budgets. Similarly, they adopted a model at the department level. "The model has its roots with an interim dean who was setting budgets based on historical bases without any rational attachment to department productivity and expenses. His solution was carefully crafted to attach allocations to real costs and to aspirational areas for growth (the incentive piece) without leading to large swings in the total allocation to each unit. The values for some elements were tied to this bottom-line issue and were not meant to convey real value. It is important to note that nearly all the funds allocated to department base budgets are derived from student tuition dollars. Grant overhead and student fees are distributed separately, and the state appropriation is applied to partially (about one-third) offset campus taxes. The model has since evolved through the addition of increased chair flexibility and programs that further reward growth in incentivized areas."

Lovrinic, J. G., et al. (1993). Developing an economic model: How one midwestern university is approaching cost control. Business Officer, 27, 34-38.
    Indiana University-Purdue University Indianapolis developed an economic model for resource allocation in its dental school and undergraduate business administration program, using responsibility centered management and total quality management techniques. The evolution, design, results, and limitations of the model are discussed.

McBride, A. B., Neiman, S. & Johnson, J. (2000). Responsibility-centered management: A 10-year nursing assessment. Journal of Professional Nursing, 16(4), 201-209.
    Describes the implementation of responsibility-centered management, a decentralized model giving deans responsibility for expanding and using resources, at Indiana University's nursing school. Discusses how it led to creation of an information-rich environment, strategic decision making, and a performance-based reward structure.

Resource allocation and governance. (2003). ASHE-ERIC Higher Education Report, 30(1), 97-105.
    Focuses on the significance of resource allocation in university governance system. Way in which the responsibility-centered management model changed the perception of shared governance; Assumptions of responsibility-centered management model; Principles of responsibility-centered management.

Riggs, D. E. (1997). What's in store for academic libraries? Leadership and management issues. Journal of Academic Librarianship, 23(1), 3-8.
    Discusses leadership and management issues in academic libraries. Quality improvement; Staff creativity; Internationalization of higher education and globalization of knowledge; Budgeting approaches.

Rogers, C. (2009). There is always tomorrow? Libraries on the edge. Journal of Library Administration, 49(5), 545-558.
    There is an old saw about a young man adapting a persona and then spending the rest of his life trying to create a new one. To even meet, let alone exceed, user expectations in the digital age do research libraries need to shed their old personae and fundamentally re-invent themselves? Can we really categorize our users and their expectations? What are the metrics that will inform our repositioning? Are time and the information marketplace moving too fast for us to get in front of rising user expectations? What role will leadership play in creating new roles in the evolving information environment? 

Savage, D. &  Kahl, C. (2018). Obligations and intentions: An exploratory study of indirect cost recovery monies from research grants as a revenue stream for funding research library budgets. Library Assessment Conference. Houston, TX: 412-422.
    This project seeks to explore what the level of awareness of Indirect Cost Recovery (ICR) as a revenue stream is in academic libraries at Carnegie-designated Highest and Higher Research Activity institutions, whether they have specific policies about either ICR designations or expenditures, and how ICR fits in with their other revenue streams. In addition to seeking and reviewing both library and information science and higher education research literature, the authors deployed a survey to deans and directors of academic libraries in the United States, specifically those at Carnegie Classification Highest Research Activity institutions and Higher Research Activity institutions. An invitation for follow-up conversations on the topic was included.

Shannon, P. (2019). Responsibility centered management (RCM) and online social work education: Navigating a changing financial landscape. Online Journal of Distance Learning Administration, 22(1), 1-5.
    Online programs are often viewed as a cost-efficient strategy for increasing revenue for shrinking university budgets but this may not be an accurate assessment. Responsibility Centered Management (RCM) is a budgeting model that is purported to increase efficient delivery of academic programs. As RCM budgeting models have been embraced, many universities have launched online education programs. The Department of Social Work has experienced both successes and challenges with implementing an online MSW program under an RCM model. The Online MSW program has been deemed a success by faculty, students, and the University at large. The purpose of this paper is to share the strategies used in the development, implementation, and management of an online MSW program and provide some general guiding principles for new and existing programs.

Smolka, A. J., Halushka, P. V., & Garrett-Mayer, E. (2015). The faculty costs to educate a biomedical sciences graduate student. CBE - Life Sciences Education, 14(1), 1-8.
    Academic medical centers nationwide face numerous fiscal challenges resulting from implementation of restructured healthcare delivery models, contracting state support for higher education, and increased competition for federal and other sources of biomedical research funding. In pursuing greater accountability and transparency in its fiscal operations, the Medical University of South Carolina (MUSC) has implemented a responsibility centers management budgetary model, which requires all MUSC colleges to be eventually self-sustaining financially. Graduate schools in the biomedical sciences are particularly vulnerable in the face of these challenges, depending traditionally as they do on financial support from training grant tuition, occasional medical school tuition and medical practice plan revenues, graduate college--based revenue-generating programs, and faculty payment of PhD tuition. The revenue streams are often insufficient to support PhD training programs, and supplemental financial support is required from the institution. In the context of a college of graduate studies, estimates of the cost of educating a graduate student become a significant necessity. This study presents a readily applicable model of empirically estimating the faculty salary costs that may provide a basis for budgetary planning that will help to sustain a biomedical sciences graduate school's commitment to its teaching, research, and service mission goals. The authors have included a supplemental materials article.

Volpatti, M. C. (2013). Privatization of public universities: How the budget system affects the decision-making strategy of deans. [Doctoral dissertation, Indiana University]. ProQuest LLC.
    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). 

Whalen, E. (2003). Decentralizing the budget. BizEd, 3(4), 28-29.
    Delves into the issue of decentralization in U.S. business schools. Comparison made between the centralized and decentralized budgeting systems; Discussion of responsibility center budgeting for schools;Questions that business school deans must consider regarding the matter of budgeting.

Wilms, W. W., Teruya, C., & Walpole M. (1997). Fiscal reform at UCLA: The clash of accountability and academic freedom. Change: The Magazine of Higher Learning, 29(5), 40-49.
    The attempt to fix the multimillion-dollar shortfalls of the 1990s in UCLA resulted in a clash between accountability and academic freedom. The shortfalls made it necessary to implement significant cuts in operating budgets, and the resulting conflict between the administration and the faculty revealed the framework of the powerful academic subculture usually submerged beneath the surface of everyday activities. A number of budget reductions between 1991 and 1993 proved to be insufficient, and Chancellor Charles E. Young and his staff introduced a program in 1994 to push decisions concerning revenues and costs down to individual academic and administrative units. This model, which was based heavily on the philosophy of Responsibility Center Management that was being enforced in a number of other universities, caused faculty members to worry that harsh business practices would irrevocably alter university life. The history of fiscal reform at UCLA is discussed in detail.