The Next Generation of Higher Education Management Fads

Crisis, manufactured or real, leads to desperate searches for solutions. Many of these turn out to be faddish, though their impact remains.
By Kevin R. McClure

More than fifteen years ago, higher education scholar Robert Birnbaum wrote his influential book Management Fads in Higher Education: Where They Come from, What They Do, Why They Fail, arguing that claims of crisis are ubiquitous in higher education. “Hundreds of claims of crisis have been documented,” he writes, “ranging from the pandemic (the crisis of finance) and transcendental (the crisis of confidence) to the logistical (the crisis of parking).” In addition to supplying journalists with a steady stream of headlines, these claims of crisis make college and university leaders vulnerable to the promises of new management ideas, many of them imported from the private sector. By subscribing to and implementing the techniques, systems, and processes these ideas inspire, institutional leaders hope both to assuage critics and to enhance the effectiveness and efficiency of their campuses.

Some of these new management ideas, Birnbaum tells us, “may diffuse, be adopted rapidly through institutional networks, and become an accepted part of the educational system.” By contrast, other ideas leave nothing but traces of their former preeminence in the managerial imagination. Birnbaum’s focus is on the origin, evolution, and consequences of the ideas that, in the higher education context, went the way of the dinosaur. Each was rejected, reinvented, or replaced after initially being hailed as groundbreaking. Because they enjoyed—even briefly—widespread adoption, Birnbaum calls them management fads. Like leisure suits and acid-washed jeans, they were popular one day and gone the next.

Through detailed accounts of seven management fads over forty years, Birnbaum developed a useful framework for understanding how new management ideas enter higher education and gain traction. However, this framework has not been applied to newer management ideas that have emerged as a result of more recent problems in higher education.

The political, economic, and cultural challenges facing colleges and universities in the United States have only intensified. Amid financial turbulence, institutional leaders increasingly seek to cut costs and bring in new revenues while continuing to demonstrate their relevance to stakeholders and meet performance expectations. Popular media have highlighted a host of new crises in higher education, notably those involving college affordability, student loan debt, and critical thinking. Within this environment of crisis, there has been no shortage of new management ideas proposed to facilitate institutional “transformation” and ward off the specter of imminent decline.

Two ideas in recent years have received sustained attention from higher education insiders and outsiders alike: incentive-based budgeting and consolidated administrative services. Birnbaum’s framework allows us to explore what the future may hold for these concepts.

“A Paradox of Complexity and Simplicity”

Birnbaum defines higher education management fads as any “practice or interest followed for a time with exaggerated zeal.” Pressured to become more effective and efficient, colleges and universities have adopted new techniques, processes, and systems that were originally designed to meet the needs of business. Birnbaum argues that a hallmark of higher education management fads is that they are “applied without full consideration of their limitations, presented either as complex or deceptively simple, relying on jargon, and emphasizing rational decision making.” Although many higher education management fads are presented as the product of extensive research, the evidence is more often anecdotal than empirical, derived in large measure from user testimonials.        

Management fads are seductive in higher education because they appear “so obviously reasonable as to defy disagreement.” A management fad is often a product, one promoted by those with a vested financial interest. And it tells a good story: the fad “helps a distressed manager understand what is wrong, describe[s] how to fix it, and offer[s] a vision of professional efficacy.”

Innovations are revealed as fads when they fail. A management fad is a rejected and discredited innovation replaced by the next new idea. Difficult to identify in real time, Birnbaum’s five-stage life cycle provides “cues that should alert potential adopters to the possibility that a proposed innovation is a fad.”

Stage one begins with a proclamation of “widespread social, economic, demographic, and technical change” in which “past operating assumptions no longer apply.” A new management idea is proposed to address the challenges occasioned by crisis, accompanied by early narratives of miraculous results. In stage one, “promises of extraordinary outcomes are made, users are said to be demonstrably more successful than non-users, and resisters are painted as traditionalists unwilling or unable to respond to change.”

Stage-one narratives evolve and spread in stage two. Central to this diffusion is the presence of what sociologists call an organizational field consisting of professional groups, governmental agencies, and other institutions. Presentations and articles from management consulting firms highlight high-status institutions as early adopters, suggesting to lower-status strivers that the pathway to legitimacy and prestige is to drink the management Kool-Aid. Birnbaum contends, “Organizations adopting the innovation are applauded for acknowledging the existence of serious problems, engaging in efforts to improve and reform, and conceding that system and social benefits should outweigh selfish interests of organizational participants.”

Stage two allows narratives to develop without evidence. In stage three, cautionary tales surface. Scholars produce studies that revise some of the initial claims of effectiveness and efficiency. Champions of the idea concede that it is not perfect but requires strict adherence to a set of principles and imposition of certain conditions.

Stage three bleeds into stage four when the narrative devolves. Stories of disappointment and skepticism overtake the original narrative.

The final stage of the life cycle, resolution of dissonance, finds purveyors of the new management idea scrambling for explanations. Unable to admit failure, evangelizers blame institutions and individuals for shortcomings. In certain cases, this allows the principles of the idea to be salvaged to reemerge under a new guise.

Incentive-Based Budgeting

Incentive-based budgeting (IBB)—sometimes called responsibility-center management—is an old idea whose popularity recently blossomed in higher education. Building upon Harvard University’s budget model of “every tub on its own bottom,” University of Pennsylvania president Martin Meyerson introduced a more market-driven approach to higher education budget processes in the 1970s. The goal was to address a critical problem: most faculty think more about academic prerogatives than financial consequences when making decisions. IBB sought to couple academic authority with financial responsibility by decentralizing management.

While most universities centralize their budget systems and make incremental adjustments year to year, IBB grants substantial financial decision-making powers to local academic units. The academic units, in turn, are responsible for generating their own income and covering expenses. Revenues come from several sources, the most important of which is students enrolled in credit-bearing courses. Many models of IBB require academic units to pay a “tax” to a centralized budget unit, which then differentially allocates this pool of money based on institutional priorities. By decentralizing management, academic units must judiciously engage in cost-benefit analysis and be prepared to absorb costs. Moreover, units are given an incentive to engage in revenue-generating activities because they retain and carry forward any money that they make. Chairs, deans, and even faculty have reason to pay close attention to spending and to develop innovative courses, programs, and research projects to boost enrollments and bring in research grants.

IBB traveled from the Ivy League to other institutions thanks to two champions: Jon Strauss and John Curry. Strauss, a chief budget officer at Penn under Meyerson’s administration, teamed up with Curry at the University of Southern California to implement a model of IBB. They called the model revenue-center management to emphasize the importance of revenue development in decentralized units. Strauss and Curry have remained vocal advocates of IBB, writing two books on the subject. Management consulting firms have also played an important role in spreading IBB.

Initial accounts of IBB, such as Strauss and Curry’s 2002 book Responsibility Center Management: Lessons from 25 Years of Decentralized Management, highlighted the idea’s potential to “unleash” faculty entrepreneurship, refocus the attention of academic units to revenues, link financial decisions to long-term strategic planning efforts, provide administrative services more efficiently, promote financial transparency, improve data collection, involve faculty in financial planning, and encourage restraint in spending. Edward Whalen, in his 1991 book Responsibility Center Budgeting, noted that the idea of IBB provides a set of easy-to-follow principles and can help institutional leaders better assess performance and more efficiently allocate and expend resources. Reporting on the experience of Indiana University Purdue University Indianapolis in a 1997 issue of the magazine Change, administrators David Stocum and Patrick Rooney called their IBB model “a partial antidote to the outmoded, short term approach of simple downsizing as a means of increasing organizational efficiency and effectiveness.”

Empirical studies and user experiences have tempered stories of initial success. James Hearn and colleagues undertook a study of an IBB model in 2006 because of the lack of data-driven research. The results of their mixed-methods analysis of an IBB model, published in a 2006 article in the Journal of Higher Education, give reason to “question some of the conventional wisdom regarding the likely effects of [incentive-based budgeting systems] in a given setting,” in part because “the ultimate effects . . . on efficiency and effectiveness are thus far unclear.” Similarly, Daniel Lang reported in his contribution to the edited book Incentive-Based Budgeting Systems in Public Universities, “The University of Toronto’s experience has been mixed. In some situations [responsibility-center management] has been successful. In others, its deployment has been at best problematic.” More specifically, Lang notes that the success of IBB “appears to be a creature of circumstance.” Indeed, IBB sometimes requires expensive investments in management infrastructure and can produce unhealthy competition among units scrambling for students.

The conversation surrounding IBB has devolved into debate. Critics argue that the pursuit of students and resources by different units impedes collaboration and erodes institutional unity. IBB may engender perverse incentives to lower admission standards or create “in-house” courses (for example, writing for business majors) as a consequence of enrollment-based revenue generation. At the same time, IBB assumes that unit leaders and faculty members have the skills or desire to “unleash” their inner entrepreneur, which may not be a safe assumption. In response to these criticisms, Curry and Strauss, in a second book, Responsibility Center Management: A Guide to Balancing Academic Entrepreneurship with Fiscal Responsibility, concede, “As one might expect, the takeaways are mixed, with both success stories and failures.” At present, the future of IBB is uncertain, although Curry and Strauss report that at least forty-three major universities had implemented some form of the approach as of 2013.

Consolidated Administrative Services

Management consulting firms have argued that higher education is experiencing a crucible moment in which dramatic change is necessary to stem hemorrhaging spending and produce more skilled laborers. For several of these firms, such as Accenture, colleges and universities can achieve desired efficiencies by consolidating, or sharing, noncore or support services. The consolidated-services model was pioneered in the private sector before traveling to higher education. The basic premise is that economies of scale result when disparate administrative and business support units are combined into a single entity. Rather than having each academic college of a university house its own information technology office, for example, one hub might serve all or some subset of the colleges.

According to Accenture, shared service centers feature several key characteristics, chiefly treating the users as customers and operating with a performance-based culture that uses metrics and feedback. By “taking a page from business,” Accenture explains in a 2013 brochure, colleges and universities can “gain operational efficiencies and maximize service delivery quality, without sacrificing their institutional missions.” Accenture highlights stories of prestigious early adopters such as Yale University. Versions can now be found in many public institutions, including most of the University of California system.

An early advocate of the transformative power of consolidated administrative services was Ricardo Azziz, the former president of Georgia Regents University. Writing in a 2014 issue of University Business, Azziz describes “how universities can benefit from a concept [shared services] frequently and successfully implemented in the corporate world.” Azziz reports that the main benefits of the model include reducing costs and increasing the quality of the services provided. Moreover, consolidated administrative services can reverse the development of administrative “silos” within individual colleges of a university. Luis Proenza and Roy Church, former presidents of the University of Akron and Lorain County Community College, respectively, wrote in a 2011 issue of Educause Review that consolidated administrative services are saving millions of dollars.

Stories have emerged of faculty members and students questioning the value and consequences of consolidating administrative services. In 2013, the student union at the University of Michigan wrote a searing critique of the institution’s $12 million project with Accenture involving a shared services center. The students claimed that none of the project’s reforms addressed the hefty salaries of a growing administrative class or curtailed spending on the campus building boom. Instead, they argued, the project deskills and depersonalizes labor at the university. In 2013, the faculty senate at the University of Michigan endorsed a suspension of the project. In 2014, faculty at the University of Texas similarly protested a consolidated administrative services plan at their institution because it would undermine the relationships established between faculty and staff.

The empirical record on consolidated administrative services in higher education is virtually nonexistent. Paul Smith’s College president Cathy S. Dove, in her 2004 dissertation, explored the potential of shared services to lower administrative spending in higher education. Although it was not a study that directly measured efficiency, Dove concluded, “Potential benefits for most universities may not be as large as those experienced by . . . multinational corporations.” Because many of the examples of consolidated administrative services are in their infancy, there have been few conclusive evaluations, but the adoption of such arrangements continues to grow.

The Next Generation of Fads

Incentive-based budgeting and consolidated administrative services adhere to key elements of Birnbaum’s framework for identifying and understanding higher education management fads. While it is possible that both IBB and consolidated administrative services will become thoroughly integrated into higher education systems and processes, potential adopters ignore at their own peril the clues that these ideas may soon be swept into the dustbin of rejected fads.

However, IBB and consolidated administrative services may not simply be following a road paved by prior management fads. Indeed, they may be rewriting the “script” of how management ideas flow into and gain purchase in higher education. Thus, it is worth considering the ways in which IBB and consolidated administrative services extend elements of Birnbaum’s framework.

First, while the seeds of decentralized management germinated in the private sector, many principles of incentive-based budgeting were developed inside academe. The fact that IBB matured within higher education suggests that the line dividing public institutions and private-sector organizations is increasingly porous. This porousness may be symptomatic of corporate norms within higher education and the growing presence and influence of college and university administrators with private-sector experience. The next generation of management fads may no longer exclusively travel from the private sector to higher education. Colleges and universities have become sufficiently corporatized to generate their own management thought leaders and fads.

Second, IBB and consolidated administrative services spread, in part, because of the vision and action of administrators. By adopting IBB and consolidated administrative services, administrators were exercising the power to leverage institutional resources in pursuit of new revenue streams. In their 2004 book Academic Capitalism and the New Economy: Markets, State, and Higher Education, higher education researchers Sheila Slaughter and Gary Rhoades called this power “extended managerial capacity.” While IBB claims to promote lower-level participation in decision making, the reality is that successful implementation relies on a high degree of centralized managerial coordination.

Birnbaum refers to the centralization of authority as one “residual” of higher education management fads. This centralization can sabotage good management, as numerous planning meetings, data-collection efforts, and other details of innovation oversight consume any time to address problems. Before long, colleges and universities in the midst of fad adoption find they must hire more administrators with skills in finance or data analysis. The next generation of management fads may be a product of and contributor to academic capitalism and managerial authority in higher education.

Third, IBB and consolidated administrative services provide additional evidence that it is challenging to measure the success of a new management idea. There are various metrics and timetables of effectiveness, and analyses of efficiency may be in conflict. It is possible that IBB and consolidated administrative services lead to reductions in spending and, simultaneously, tear asunder the cultural fabric of an institution. Indeed, at the University of California, Los Angeles, a version of responsibility-center management engendered deep mistrust between the faculty and the administration. In the same vein, it is possible that incentive-based budgeting and consolidated administrative services will over time achieve greater institutional effectiveness and efficiency. Long-term success notwithstanding, both models may require substantial investments of time, personnel, and money that in the short term offset cost savings.

Partial successes may be enough to justify retaining management fads longer than in the past because perceptions of crisis in higher education have intensified. Rejection, reinvention, or replacement of the fad may be more difficult if implementation entailed large investments of money. The next generation of higher education management fads may have staying power.

Both IBB and consolidated administrative services reflect key elements of Birnbaum’s framework, casting some doubt on their ability to deliver on promises and outlive the problems they purport to fix. Institutional leaders would be wise to approach these new management ideas with appropriate caution. Both ideas extend Birnbaum’s framework in significant ways. Through a close reading of IBB and consolidated administrative services, we can gain insights into a new generation of management fads. These insights can, in turn, help stakeholders to diagnose and challenge higher education management fads before they inflict unnecessary harm. 

Kevin R. McClure is assistant professor of higher education in the Watson College of Education at the University of North Carolina at Wilmington. His e-mail address is


In "The Next Generation of Higher Education Management Fads," Dr. McClure lists initiatives he believes have fallen by the wayside because they were ill-conceived. Many died on the vine because of a lack of state funding for higher education, and because of a lack of sustained change sponsorship by administrators and faculty governance groups.

The goal of higher education is learning -- that all students change and grow and develop strong skills for choosing and living and working. This means students need to stay, they need to be advised, and they need to get a degree or certificate. When choosing the next big initiative to champion and to complete, I hope institutions and state legislatures will keep the main goal in mind. The main goal is the success of every student.

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