Widgetized Section

Go to Admin » Appearance » Widgets » and move Gabfire Widget: Social into that MastheadOverlay zone

Searching for Accountability in a Complex Organizational Failure

The views expressed are those of the author and do not necessarily reflect the views of ASPA as an organization.

By Michael R. Ford
November 6, 2023

Like many other public organizations, my university is going through some difficult times. We are facing an 18-million-dollar deficit, and the response has been furloughs, higher teaching loads and workforce reductions equaling about 20 percent of the total workforce (layoffs, voluntary retirements and elimination of vacant positions). In addition, it appears most non-tenure/tenure track instructors will not have their contracts renewed. Suffice to say it is an uncertain time for my institution, and higher education in general. As I tend to do in times of organizational distress, I turned to the Public Administration (PA) literature to try to understand how to navigate these choppy waters.

Understandably many of my colleagues reacted to our budget challenges with demands for accountability. Who screwed up? Who led the organization to this untenable position, and how can we hold them accountable? As Romzek and Dubnick (1987) demonstrated in their classic case study of the Challenger disaster, accountability is multi-faceted in government. In class I compare organizational failures to an air disaster. They usually involve a confluence of events that, when isolated, would not lead to failure. But collectively they do. Hence easy blame and accountability is impossible. In the case of my university, several things brought us to this dramatic point.

First, the percentage of state support compared to tuition support declined dramatically, making us highly reliant on tuition for financial health. The state legislature froze tuition for a long period of time, ensuring that the impact of changing revenue sources could not be offset by increasing tuition. In other words, the only way to increase revenue was to grow enrollments. But demographics and increased competition for a smaller pool of students prevented enrollment growth. While the organization invested in marketing and enrollment management, the efforts ultimately failed to increase student numbers. So whether by design, or by happenstance, politics and the actions of the state legislature (i.e., external forces) certainly helped us get to this point.

However, organizational culture and inertia are also part of the story. Universities are large bureaucracies, and over time, can atrophy. In the case of my university, many of our processes, incentive structures and our overall culture are (at least in my opinion) built to serve an institution and world that no longer exists. For example, in 2016 my university released the results of an internal project to improve our budget processes, and the work concluded there was little connection between resource allocations and strategy or mission. It appeared we were just humming along using a model from the 1970s (or earlier). It was something I noticed early in my tenure here when examining the disconnect between program enrollments and faculty numbers. Though the official message was that growing enrollments was the path to more resources, in reality, there was little connection between program performance and resource allocations. Broadly, our organizational culture did not create a foundation that allowed the institution to meet evolving internal and external challenges.

Though I already mentioned budgeting, there is no getting around the fact that an 18-million-dollar deficit is also a financial management failure. As I write this, I am grading 35 final budgeting projects in which students track the fiscal health of a public or nonprofit organization over five years. My students identify positive and negative trends to ensure problems can be addressed before they reach a breaking point. A large structural deficit does not happen overnight, it builds, and even if the warning signs are missed, they are nonetheless there. Warning signs can be missed for many reasons. It can be a lack of systems and controls. It can be magical thinking. It can be staff turnover. Or it’s a result of a culture that is so focused on meeting annual budgeting challenges that there is no time or energy left to engage in longer-term financial planning—which is my suspicion in this case.

No doubt there are more decisions and circumstances that also played into the financial crisis facing my university. While I get the desire for a single scapegoat when bad things happen, complex problems in complex organizations have complex causes. Failure is collective. I am an advocate of using discussions around accountability to inform reforms that make organizations sustainable in the long-term. The first step, workforce reductions, is always unfair and painful. But the next steps can be successful if they include culture reforms, the aligning of budgetary practices with mission and the implementation of financial monitoring systems to ensure the mistakes of the past are not repeated.

Author: Michael R. Ford is an associate professor of public administration at the University of Wisconsin Oshkosh, where he teaches graduate courses in budgeting and research methods. He frequently publishes on the topics of public and nonprofit board governance, accountability and school choice. He currently serves as an elected member of the Oshkosh, WI Common Council.

1 Star2 Stars3 Stars4 Stars5 Stars (4 votes, average: 4.75 out of 5)

Leave a Reply

Your email address will not be published. Required fields are marked *