Responsibility Centre Budgeting and Responsibility Centre Management in Theory and Practice

By the end of the 1980s a number of large, research intensive universities in North America had begun experimenting with an organizational and budgetary concept that later became known as Responsibility Center Budgeting or Responsibility Center Management. The principal objectives of RCB/RCM were to relocate and enhance responsibility for planning and budgeting, usually by decentralization, and in turn improve institutional performance in making decisions about the allocation and generation of resources, and in delivering services. More than a dozen major American and Canadian universities have now deployed RCB/RCM to one degree or another. This makes it possible to begin to test the hypotheses and expectations on which RCB/RCM was originally based, and to determine some of its practical implications and consequences. INTRODUCTION Within the last decade several major universities in the United States and Canada have adopted Responsibility Center Budgeting (RCB) and Responsibility Center Management (RCM). As early as the 1970s some universities, before an RCB/RCM taxonomy was developed and elucidated by Edward Whalen at Indiana University (Whalen, 1991), had implemented certain aspects of what is now understood to be encompassed by RCB/RCM. The terminology and theory of RCB/RCM is still evolving. TQM–Total mQuality Management–embraces some aspects of RCB/RCM. So do BPR– Business Process Re-engineering–and School-Based Budgeting, which is often linked with the charter school movement (Barlosky and Lawton, 1995). At the University of Michigan, RCB/RCM is called Value Centered Management. At Indiana University, the term Responsibility Center Budgeting is no longer used; only Responsibility Center Management is used, as is also the case at UCLA. The comparable term at Ohio State