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    In the late 1980s and early 1900s, public universities found that they were no longer immune to the financial stress faced by their private sister institutions and corporate America. Budget cuts were in the air across the land. When the budget ax hit, the cuts often came without warning and their size was sometimes staggering. State support for some institutions dropped by 40% or more. Most university administrators had only experienced budget increases, never budget cuts. Also, the budget setbacks usually occurred at the most inopportune time - during the school year when contractual commitments with faculty and staff had been signed, programs had been planned, and students were enrolled and taking classes.

    1. Should the administration be "fair" to all affected and institute a round of across-the-board cuts whenever the state announces another subsidy reduction?

    2. If not across-the-board cutbacks in programs, then would you recommend more focused reductions, and if so, what priorities would you establish for bringing spending in line with revenues?

    3. Since these usually are not one-time-only cutbacks, how would you manage continuous, long-term reductions in budgets extending over a period of years?

    4. Should the decision-making process be top-down (centralized with top administrators) or bottom-up (participative)? Why?

    5. How should issues such as protect-your-turf mentality, resistance to change, and consensus building be dealt with?

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    Solution Preview

    The response addresses the queries posted in 1449 words with references.

    //The deficit in the budget causes the problem of reducing the amount of subsidy provided to the public Universities by the Government. This also makes the University face the problems in terms of the reduction in the amount of the subsidy fund allotted to it. Before starting a paper like this, it is crucial to provide a brief introduction of the case and highlighting the main issue. //

    The paper concentrates on the issue of the subsidies provided by the government to the universities in terms of aid. But it has now been discovered that due to the cost cutting, the aid is also being affected. Previously, the public university believed that they would not be influenced due to the cut in the costs. But the real situation has stated a significant affect on the university as a result of the budgetary slack. This also has affected the rate of governmental aid provided to this university. The situation has influenced the public, as well as, the private institutions. But this proves to be a pathetic situation for the university as it had planned all the activities to be carried out with this granted aid (Robbins, Robbins & Beach, 2002).

    The activity comprises of the recruitment of the staff and the faculty; the enrollment of the students and all this incur a huge cost for the university. The university should behave in an optimistic manner, in order to resolve this issue with a rational approach.

    //The next part discusses the behavior adopted by the administration, in order to resolve this problem. The need is to concentrate upon this issue and to design the way to come out of this problem.//

    The administration is supposed to borne the responsibility in a way, by catering to the needs of the universities in terms of providing them the aid to recover from this setback. It is the liability of the administration to behave in a balanced manner, in order to resolve this issue and see to it that it is solved with full dedication. The situation is much crucial for both the university, as well as, the administrative department, as they both are complementary to each other. The administration requires taking this issue as a decisive one as it can hamper the growth ...

    Solution Summary

    The response addresses the queries posted in 1449 words with references.