Financing Public Higher Education: The Impact of Responsibility Center Management on a Public Research University

Abstract

To explore the impacts on public universities of implementing an incentive-based budgeting system, this dissertation focuses on one university’s extensive experience with Responsibility Center Management. The financial and non-financial impacts of Responsibility Center Management will be considered by examining the extent to which commonly held beliefs about Responsibility Center Management are supported by empirical data. Interviews with twenty-one key leaders at the University of Minnesota are the primary data source for understanding the extent to which actual experience supports common beliefs about Responsibility Center Management. Review of financial and other quantitative data, as well as internal documents, also inform the investigation. Responsibility Center Management is found to have a multitude of impacts on the finances and culture of an institution, and interpretation of these impacts is often dependent on one’s philosophical views on public higher education. By understanding the actual outcomes and potential pitfalls associated with Responsibility Center Management, university leaders are better informed as they navigate the challenging road ahead for public higher education.