Periods of financial stress mandate that administrators make difficult choices among competing priorities within an institution. As such, no one strategy or combination of strategies provides a bluepnnt for successful management.
Such a one-size-fits-all mentality ignores the gt-eat diversity of colleges and universities both across Camepe classifications and within them. Instead, administrators must weigh the advantages. disadvantages. and applicability of each strategy against the priorities, needs, and culture of the university to determine the best course of action.
First Responses to Financial Stress: Retrenchment
Research has shown that retrenchment, or reducing expenditures, is among the first strategies employed by institutions confronting fiscal stress (Turk, 1992;Dawson, 1991;and Zemsky, 1993). Reductions or midyear cuts in state appropriations or other major sources of revenue immediately affect institutions and require immediate responses from administrators to balance reduced revenue with escalating expenditures. Therefore, short-term responses to funding usually involve slashing expenditures. Common retrenchment practices include hiring freezes and pay cuts, cutbacks in merit-based student aid, reductions in routine maintenance, cutbacks in research funding, and reductions in student senices ("Report," 1993;Dubeck, 1989).
Whereas retrenchment is often unavoidable in periods of severe revenue shortfalls, it does not constitute an effective long-term strategy. Persistent cuts in salaries, equipment, and services promote morale problems among both faculty and students. Reflecting a reliance on retrenchment strategies by institutions during the early 1990s, a recent study in Campus Trends found that NEW DIUCTIONS FOR HIGHER E m n o N . no 94. Summer 1996 0 J 0 u c y . h Publuhcn ' improving undergraduate education).