Responsibility centre management comes with risks, opportunities

February 11, 2015

An article published in The Chronicle of Higher Education looks at the experiences of some US institutions that have adopted responsibility centre management (RCM). Under RCM, budgeting is decentralized, with academic units bringing in their own money and paying a kind of tax to central administration for shared services. Those faculties that produce a budget surplus are permitted to use that funding for expansion or other investments. Proponents say that such an approach motivates deans and faculty members to cut costs, find new revenue sources, and act strategically; advocates also say that the model increases transparency. However, some say that such a model is too corporate and can pit colleges or faculties against one another. Moreover, to successfully implement RCM requires a strong central administration in order to uphold rules and redistribute funding effectively. The article notes that a move toward RCM has often led to a high turnover of deans who are not able to adjust to revised roles. Trent University recently adopted RCM, while the University of Alberta is expected to implement such a program in the near future. Wilfrid Laurier University's Integrated Planning and Resource Management task force also recommended the school adopt RCM. The Chronicle of Higher Education (Subscription Required)