Cutting Budgets University Style

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Medford University employees 12,000 people and is currently undergoing financial pressure. The university spends about $100 million annually on fringe benefits (health insurance, retirement plans, and so on) for its current employees. The President of the university, Hiromi Kobayashi, has appointed a task force to design a new fringe benefit package to reduce costs. The task force consists of faculty and staff from departments throughout the university. The president has appointed the chief administrator of the hospital as the chair of the task force, and one of the key assistants, the vice provost, to serve as the secretary of the task force. (Brickley, Smith & Zimmerman, 2009, p. 359)

President Kobayashi made the decision to appoint current employees from the providing areas for many reasons. First, the departments specializing in their area would better understand the elasticity and flexibility of their current programs. Secondly, by incorporating members from each branch, Kobayashi is able to diversify the collaboration and ultimately enhance the end result. And lastly, by including members from an array of departments within the university, President Kobayashi is able to alleviate any misunderstandings and/or issues a department might have with the overall end result. Not every member of the new task force will agree to cut costs within their department. President Kobayashi should anticipate members of the task force to deliberate their opinions in regards to his request, but he should also anticipate a workable outcome from the proceedings. In the end of the deliberation the task force would have agreed to give a little to meet the financial burdens of the entire university. The president appointed the chief hospital administrator as the chair of the task force to overlook and administer the entirety of the operation. He/she can assign duties and obligations to perform research within each department to discover financial opportunities that will relieve the universities financial burdens. Departments in insurance, retirement, and so on will each have there own discoverable capabilities on subcommittees. Each subcommittee will be responsible for researching capable avenues of minimizing expenses with varying degrees of reductions.

Making sure each subcommittee is appointed a chair that understands the importance of reaching an equally adverse decision. Each committee chair will be responsible for putting together a diverse team to cover the many grounds of detail involved. The president will commit to accepting the report, but with the ability to suggest modifications. The president assigned the task force to alleviate any specific interest in cutbacks. In fact, the task force is designed to produce the best alternative to a bad situation, by the majority of university. If the president were to commit to changing the new plan, all credibility and influence from the overall task force would be compromised and disregarded. The key assistant secretary would be the one that makes note to changes being discussed and proposed. This would allow the president to be involved in the process of discussion and approval. Making sure that nothing is overlooked, and that she will have influence in the overall discussion/understanding of what the new fringe benefits plan will stipulate.


Brickley, J., Smith, C., & Zimmerman, J. (2009). Managerial Economics & Organizational Architecture. (5th ed., p. 38). New York: McGraw-Hill Irwin.