TOWARD A THEORY OF RETRENCHMENT IN HIGHER EDUCATION.

Abstract

This study was directed toward building a theory of retrenchment. To understand better institutional behavior during decline, it seemed pertinent to determine whether a patterned sequence of institutional responses to fiscal stress existed. Previous studies suggested a pattern of responses but had not analyzed those actions over a long period of time. This study examined the responses, over a ten-year period, of twenty-three, four-year colleges and universities that were observed in A Report on the Financial Conditions Project (1981) by the American Council on Education and the National Association of College and University Business Officers. Data collection centered around five response categories--operations, programs, faculty and incentives, policy development, and severe responses. Analysis was a two-phase process: secondary analysis of the ACE/NACUBO report provided data for FYs 1975-78, and analysis of questionnaire results revealed institutional responses during FYs 1979-81 and 1982-84. Institutions were grouped by enrollment experience. It was hypothesized that more political, less reactive measures would be used in the early stages of stress, but that more reactive, traditionally rational actions would become commonplace and more acceptable once the need for change was apparent. In the aggregate, the study found a pattern of responses: More political operational and programmatic responses preceded the more traditionally rational responses. With time, rational actions associated with policy development and the faculty and incentives category increased. The severe responses, though small in number, were confined to the declining institutions. Disaggregated data showed that institutional behavior was individualistic. Contrary to what was anticipated, more rational decisions frequently were not associated with decline; growing/stable institutions often were more responsive than declining ones. The study found that, since 1978, faculty participation in planning and implementation of retrenchment strategies increased; such responses likely attempt to make the change more agreeable. Contrary to the literature, respondents indicated that innovative activity increased as the result of fiscal stress, and that faculty morale improved. Furthermore, there is an apparent relationship between decline and the appointment of new presidents.