Do corporate management tools inevitably corrupt the soul of the university? Evidence from the implementation of responsibility center budgeting

Abstract

The use of corporate management tools in universities has been widely critiqued in recent decades, as it is viewed as undermining academic goals and promoting marke-tization and corporatization. Responsibility center budgeting (RCB) is one popular management tool that has been decried as promoting market logics, internal competition and institutional fragmentation. This comparative case study investigated four North American universities that employed RCB for several years, to investigate the relationship between unit autonomy and coordination. Site visits and interviews with key informants were conducted at the four universities, supplemented by document analysis. The analysis identifies widely different experiences between two sets of universities. Findings show that the ability of the central administration to promote vertical coordination is critical to mitigating the adverse consequences of RCB.