Spring Break
Budget Bust Part 3: University as a business entity
Tyler Will
Issue date: 10/17/08 Section: News
10/17/08 - Two business professors at the University of Rhode Island said the campus's budget situation is unique as it is an unconventional business.
Joseph D'Adamo said that since the university is not a profit-driven business, it is more difficult to make budget cuts. He said the university's product is an educational experience, and pointed out that traditional businesses have stockholders, whereas URI does not.
"The trick is to find those functions, those activities, that are most essential to providing [an educational experience] to the students," D'Adamo said. The ideal situation, he said, is to find activities or functions that are not key to providing a quality educational and social experience. "In a school in particular it's very, very hard to make those judgments."
D'Adamo said businesses also have to make "wise" decisions about how they invest their money, in both the short and long term. And if those wise decisions are made, the second step is to ensure the allocation of funds is also executed wisely, "So you don't take away from the quality of the service just to save some money," D'Adamo said.
Another problem facing the budget cuts is conflicting interests. D'Adamo said the very idea of a quality experience is "a matter of perspective."
"I think the administration is in a very, very tough position that I don't envy at all," Charles Hickox, another URI business professor, said, explaining The administration will disappoint a group of people regardless of where they make a budget cut.
Hickox said cutting football could offend alumni, while cutting other academic or athletic programs could offend respective audiences interested in those subjects.
When facing cuts, Hickox said the effect of the cut has to be considered, and the alternative to budget cuts is an increase in revenue.
But revenue increases are difficult for URI, Hickox said, because grants from various foundations have to be allocated for specific things. He gave examples of research programs or for new buildings, which don't exist. He pointed out that they do not provide money for things that already exist.
Joseph D'Adamo said that since the university is not a profit-driven business, it is more difficult to make budget cuts. He said the university's product is an educational experience, and pointed out that traditional businesses have stockholders, whereas URI does not.
"The trick is to find those functions, those activities, that are most essential to providing [an educational experience] to the students," D'Adamo said. The ideal situation, he said, is to find activities or functions that are not key to providing a quality educational and social experience. "In a school in particular it's very, very hard to make those judgments."
D'Adamo said businesses also have to make "wise" decisions about how they invest their money, in both the short and long term. And if those wise decisions are made, the second step is to ensure the allocation of funds is also executed wisely, "So you don't take away from the quality of the service just to save some money," D'Adamo said.
Another problem facing the budget cuts is conflicting interests. D'Adamo said the very idea of a quality experience is "a matter of perspective."
"I think the administration is in a very, very tough position that I don't envy at all," Charles Hickox, another URI business professor, said, explaining The administration will disappoint a group of people regardless of where they make a budget cut.
Hickox said cutting football could offend alumni, while cutting other academic or athletic programs could offend respective audiences interested in those subjects.
When facing cuts, Hickox said the effect of the cut has to be considered, and the alternative to budget cuts is an increase in revenue.
But revenue increases are difficult for URI, Hickox said, because grants from various foundations have to be allocated for specific things. He gave examples of research programs or for new buildings, which don't exist. He pointed out that they do not provide money for things that already exist.
