Introduction to Responsibility Centered Management

  1. What is RCM?
    In most modern American universities, authority is highly decentralized, but responsibility (specifically financial responsibility) is held centrally. This decoupling of authority from financial responsibility poses problems for decision makers at every level of the University. Responsibility Centered Management (RCM) is a combination of policies and practices designed to overcome these problems by coupling decision making directly to the associated financial ramifications. These policies and practices should be clearly articulated and crafted to fit the mission of the institution. The backbone of an RCM is typically a Budget Model which:
    • prescribes precisely how revenues are shared amongst responsibility units,
    • associates revenues directly to revenue creating activity (for example student credit hours or degrees awarded),
    • allows decision makers to realize rewards from good financial decisions,
    • allows good local decision making to benefit the entire institution.
    The Oregon Budget Model is described in detail in the Oregon Budget Model Primer.

    The fundamental principles of an RCM are:

    • transparency - everyone knows the rules and has access to the information they need,
    • accountability - decision makers have clear lines of responsibility,
    • equity - everyone is playing by the same rules and is held to the same standards,
    • predictability - the rules don't change without broad discussion and lots of warning.

  2. Brief history of RCM adoption in the United States.
    RCM is not a new idea. RCM was fully adopted at the University of Pennsylvania in 1974. In the 1980's RCM was adopted by University of Toronto, University of Michigan, University of Southern California and University of Indiana. These Universities have well over a century of experience with the ideas, benefits and problems of RCM and all of them continue to embrace the system. In the last two decades, many other public and private universities have implemented RCM. Among these are University of New Hampshire, Kent State University, University of Illinois Urbana Champaign and University of Iowa. The Universities of Arizona and Washington both have plans to implement RCM models for fiscal year 2012.

  3. Brief history of RCM development at the University of Oregon.
    In Fall 2007, Provost Linda Brady formed a task force to study the possible implementation of RCM at the University of Oregon. Members of the task force:
    • Linda Brady, Senior Vice President and Provost
    • Frances Dyke, Vice President for Finance and Administration
    • James Bean, Dean of the Lundquist College of Business
    • Tim Gleason, Dean of the School of Journalism and Communications
    • Laura Hubbard, Associate Vice President for Budget and Planning
    • Marianne Nicols, Senior Associate Dean and Chief of Operations, College of Arts and Sciences
    • Jamie Moffit, Associate Dean for Finance and Operations, School of Law
    • Randall Hale, Senior Financial Analyst, Budget and Resource Planning
    • Andrea Larson, Associate Director of Institutional Research
    • Peter Keyes, Associate Professor of Architecture
    • Brad Shelton, Professor of Mathematics
    The task force met throughout 2007-2008 and consulted widely with administrative and academic campus leaders. With a strong consensus that RCM was a good fit for the culture and mission of the University of Oregon, the task force outlined the basic structure for the Oregon Budget Model, including the 50-30-20 rule for the division of undergraduate tuition revenue. Major leadership changes at the University, coupled with substantial and sudden changes in state funding levels, postponed the implementation phase of RCM until the summer of 2009. In 2009 a new Vice Provost for Budget and Planning position was created to coordinate the implementation and maintenance of the Oregon Budget Model. The first budget model budget projections were provided in March of 2010, for the 2011 fiscal year. As of July 1, 2010, the University of Oregon will be operating under RCM, with all academic budgets determined by the Oregon Budget Model.

  4. Further reading on RCM models.

  5. Other (informative) University RCM websites: