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Wednesday, March 11, 2015

ASU : The 2015 Budget Cutbacks

Arizona State University will have their work cut out if they are to emerge from Sun Devil country like a Phoenix rising from the ashes of a major budget cutback. At the “New American University” Dr. Crow has long cast the big goal of the University as “a force for dynamism” (Crow, 2002 B). Just as Matthew Kraatz and Edward J. Zajac (1996) assess Neoinstitutionalism through a comparison of adaptive theory, one applies the same theories to Arizona State University in addition to an examination of the historical perspective of ASU in order to create a broader perspective of the institution.

ASU President Michael Crow

historical perspective

Looking at ASU leadership and vision through the lens of the historical perspective and legacy of previous President Lattie Coor. He endeared himself to the state for many reasons, making many tremendous contributions during his successful stewardship of ASU. It may arguably be his greatest legacy that ASU has emerged as a highly competitive university when competing for large research grants from the federal government, especially in scientific and engineering fields where the largest predictable revenue stream expansion may be utilized for the benefit of the university.

Presumably, structural maintenance is served by continuing a policy of research expansion. This would clearly imply that Coor’s incumbent, Crow, was selected precisely because it was felt he would continue with the central vision that Coor championed, a vision that has lifted ASU to a new level of national prominence. In the case of ASU, certain high technology research, especially biotechnology, is perceived to be a highly attractive potential revenue stream due to an extrapolation of recent funding trends by major federal institutes. Naturally, the initiative is politically sanctified as a great economic engine for the expanding high technology economy in the state; thus, enhancing a widespread acceptance for the strategic initiatives which are increasingly driven by various mixtures of external private and public capital.

adaptive theory

The competitive marketplace, which supports adaptive theory, is a driving force behind the organizational change at Arizona State University – now the largest public university in the United States. Adaptive theory, as applied to ASU, frames the structural changes and practices of the higher education institution based on the influences of changing micro and macro environments, which are often technical by nature (Kraatz & Zajac, 1996). Not-for-profit liberal arts institutions are evolving in a heterogeneous manner as determined by the influence of macro and micro level technical environments. The macro level increases professional programs, while the characteristics of the additions are determined by the communities surrounding individual institutions – the micro level (Kraatz & Zajac, 1996)

During previous serious budget restraints, Crow recommended committing money into two areas, enrollment growth and research development (Crow, 2002A). As large state universities were forced to look for other sources funding, the technological environment could be ignored. Besides enrollment growth funds, a significant proposal for organizational change that Crow is made was the investment in biotechnology and biosciences. Crow viewed the expansion of biotechnology and the biosciences as the direction of technological research. Investing, it was thought, would give ASU a considerable return on its investment in the future. 

Keeping up with research and development is a mechanism for ASU to develop alternate sources of funding. Early in Crow's stewardship, it was necessary to become creative in order to respond to the financial crisis of ASU. Moving with the changing technical environment has been the preferred way for ASU to improve its financial future. Proposals of change made by Arizona State University President Crow support Kraatz and Zajac’s (1996) conclusion that colleges and universities do not operate within a large vacuum, but instead individual institutions change at least partially in response to the influences of external environments. 

To this date, Crow has been continuing and expanding the vision that Coor began in 1989, seeking to continue the expansion of the student base while managing an accelerated controlled growth strategy that embraces revenue generating research ventures. 

neo-institutional theory

The changes proposed by President Crow back then were seen to be driving against the core principles of Neo-institutionalism, which placed emphasis on institutional environments instead of external technical environments. Social rules, as we know, frame the conformity of the organization. Persistence, rather than change, becomes the priority. 

In neo-instutional Theory the homogeneity and stability of the organization is emphasized. Change related to technical forces is contradictory to the neo-institutional position outlined by Kraatz and Zajac (1996). Accordingly, ASU needs to search beyond organizational conformity to be able to survive decreases of state funding. Kraatz and Zajac’s description of the neo-institutional Theory discusses the persistence within institutions compared to the adaptive theory, which involves change based on the external technical environment (1996). 

In order to succeed in the future, ASU needs to promote change within the institution, and not rely on goal persistence. Kraatz and Zajac (1996) examine liberal arts colleges in the United States as a means of testing the concept of “new institutionalism” within the organizational structures that comprise the United States higher education system. The main components driving new institutionalism are: (1) organizations remain relatively constant over time due to shared values and norms, (2) structural maintenance prevails over systemic change, and (3) organizations making up the system are relatively homogeneous. The results of the study indicate that the aforementioned principles supporting the new institutional framework lack validity when applied to liberal arts campuses. 

A reasonable question, then, to ask is “do the conclusions made by Kraatz and Zajac apply exclusively to liberal arts colleges or are there also implications related to larger universities?” Crow's vision has always relied heavily upon enrollment growth as being essential to meeting the social and economic needs of an expanding state population. ASU increased enrollments and expanded campus facilities and they did so in order to meet the needs of the external community, not in a response to a systematic change across peer institutions or even those institutions ASU aspires to be like. Thus, the change is not mimetically, professionally, or coercively isomorphic as neo-institutionalists would predict. 

Another massive undertaking was the increase of research growth in the areas of biotechnology and bioscience, this too was inconsistent with the new institutional framework. Crow was very clear that by investing in biotechnology and the bio-sciences, which he refers to as the “major growth industry of the 21st century,” strong revenue streams would be created for ASU, as well as for the state of Arizona (Crow, 2002A). 

This entrepreneurial initiative at ASU represented the institution’s movement toward the behaviors of the private, corporate sector. The shift was in response to both a decrease in state-supported funding, as well as an increase in the market demand for high-tech innovations. Thus, ASU’s entrepreneurial reaction to the market’s technological demands was incongruent with new institutional supporters’ belief that colleges and universities are not influenced by external technological factors.


I support adaption theory over neo-institutionalism in the emergence of Arizona State University as a world-class research university. While continuity carries some value in any organization, external economic pressures tend to influence the way strategic goals are shaped in higher education; thus, I suggest Arizona State University will adapt its impending “Changing Direction” as a reaction to the needs of society (Crow, 2002B). University stakeholders need to be aware of impending and remote environments, and the power external environments have on influencing the mission the institution pursues. As ASU elaborates their plans to deal with budget cuts of 2015, it would be wise to take stock of the carrying costs associated with maintaining the largest public university in the United States. 

In stark contrast to growth for the sake of growth (and increased revenue and economy of scale), the rescission environment means serious difficulty when it comes time to make budget allocations which are likely to trigger cutbacks. Areas of academic and research duplication require a value based analysis to prioritize potential cutbacks in lieu of forcing students (and taxpayers) to absorb massive costs. The Arizona Board of Regents are obligated to observe the Arizona Constitution and shape their policy in accordance with the clear constitutional directive to provide as close to a free education as possible for the residents of Arizona. Ratcheting back budgets will require the sober conclusion that ASU, like NAU and the UofA, will have to deal with significant cutbacks. All three universities, ASU included, must do so under the auspices of heading 11 section 6 of the Arizona Constitution (AZLEG, 2015) which clearly states the following;

"The university and all other state educational institutions shall be open to students of both sexes, and the instruction furnished shall be as nearly free as possible." 


ASU News. (2002, October 4). University president draws board approval of investmentoriented budget request. Retrieved Oct. 5, 2002 from Arizona State University web site on the World Wide Web: http://www.asu.edu/asunews/university/budgetrequest_100402.htm.

Arizona Legislature (2015). Arizona Constitution, Retrieved March 10, 2015 from the Arizona Legislature web site on the World Wide Web: http://www.azleg.gov/FormatDocument.asp?inDoc=/const/11/6.htm

Crow, M. (2002A). Crow requests investment-orientated budget. E-mail to Arizona State University faculty, dated Sept 27, 2002.

Crow, M. (2002B). ASU’s goal: Becoming a force for dynamism. The Arizona Republic, published Oct. 13, 2002.

Crow, M. (2002C). Changing directions. E-mail to La Verne Abe Harris, dated Oct. 29, 2002.

Kraatz, M.S. and Zajac, E.J. (1996). Exploring the limits of new institutionalism: The causes and consequences of illegitimate organizational change. American Sociological Review, 61,5. 812-36. 

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