Relationship of strategic planning and budgeting to financial difficulty and organizational climate in higher education

Abstract

This study's purpose, however, was not limited to merely providing administrators with a more effective tool for allocating resources and managing an institution. The study also addresses another important concern of administrators - that of a deteriorating organizational climate in many institutions. More and more faculty and staff are turning to collective bargaining arrangements to protect their rights in their respective organization. In addition, more and more presidents of colleges and universities are serving their term of presidency for shorter and shorter periods of time. Support for the administration has declined seriously, and morale appears to be dropping continuously. Mutual trust has become almost non-existent between administrators and the faculty and staff in many institutions.

Overall, the study supports the proposition that strategic planning and budgeting would be worthwhile for institutions of higher education to fully implement.

the study included twelve hypotheses to be tested, of which three were found to be supported from the statistical analyses. In institutions of higher education in New York State, where a high level of strategic planning and budgeting was in use, the financial difficulty was found to exist at a lower level than at those institutions with a smaller degree of strategic planning and budgeting in use. It was also found that a high degree of strategic planning and budgeting in use in the institutions was accompanied by a high degree of organizational climate. Another finding was that undergraduate level institutions of higher education in New York State have a higher degree of financial difficulty than graduate level institutions.

Out of the 134 institutions surveyed, 52 of them responded or 39 percent. From the 804 individuals who were requested to respond, 113 replied for a return rate of 14 percent.

A survey questionnaire was designed for use in measuring the relationship of strategic planning and budgeting with financial difficulty and organizational climate in 134 institutions of higher education in New York State. A total of 804 individuals were asked to be respondents for theses institutions (6 per institution). These six individuals included the president, the chief academic officer, the chief financial officer, the budget officer, the president of the institution's chapter of AAUP, and the chairman of the faculty senate.

This study involves the review of a strategic planning and budgeting process and the application of this process for use in higher education. the work of two research studies on the matter of financial difficulty in higher education is examined, as well as the relationship between organizational climate and institutions of higher education. Finally, this study focusses on the relationship of strategic planning and budgeting to financial difficulty and organizational climate in higher education, and examines these relationships in institutions of higher education in New York State.

With over 30 billion dollars being spent nationally on the annual operations of institutions, it seems timely to document a sound system of planning and budgeting of higher education. Improved management techniques are needed by most administrators in colleges and universities to assist them in implementing more effective allocation of their institutional resources.

One possible remedy to this deterioration in the organizational climate is the establishment of participative decision-making as an underlying principle for managing the institutions. In addition, a system of strategic planning and budgeting needs to be inaugurated in order to promulgate the establishment and fulfillment of objectives and goals by the organization and its members. An underlying principle in administering strategic planning and budgeting is participative decision-making. Thus, the importance of implementing a system of strategic planning and budgeting has positive implications for the improvement of organizational climate, as well as for the reduction of financial difficulty.