BASES FOR INTERNAL RESOURCE ALLOCATION IN HIGHER EDUCATION INSTITUTIONS.

Abstract

The purpose of this study was to determine the bases and processes utilized for internal resource allocation in a postsecondary institution. An empirical knowledge of the financial behavior and decision-making process in an institution may guide budget planners and administrators to develop a more operationally realistic approach to budget allocation issues. Two major and opposing budgetary decision-making models--the politically and objectively rational--were adopted. Each model provided a set of contrasting concepts constituting the conceptual framework used in the study. The embedded concepts in the models were paired in a format that can be viewed as a "counter conceptual dichotomy." An exploratory and semistructured questionnaire was developed as the primary data source. The questionnaire was used to examine and determine the prevalence and range of each concept in the working process of resource allocation. A two-year public institution was selected for an in-depth, case-study analysis. A stratified random sample of those individuals managing a separate budget was obtained. Subjects ranged from department heads to the president. Interviews were conducted, and the perceptions reflecting the bases for budgetary allocations were recorded, rated, and tabulated using means, medians, modes, ranges, standard deviations, and variances. The data were analyzed and synthesized. The incremental budgeting method inherent in the politically rational budgeting model strongly prevailed in the allocation of resources at the College. The political budgeting approach proved to be viable because of historical practices, particular organizational structures, and state mandated budgetary formulas. Most of the underlying concepts of the political budgeting model were reported to be of great significance, particularly by higher level administrators who contended that the model was a necessity in the budget process. Department heads' acceptance of the model and the embedded concepts was somewhat reserved, uncertain, or confused. Their contrasting apolitical budgetary tendencies, at times, suggested qualities of the "limited-rationality" decision-making model. Nevertheless, the budgetary bases and processes examined were largely in accord with the "politically rational" budgeting model. The slight variations existing in the College budgetary process were not doubt due to its organizational peculiarities, common in higher education institutions.