Budgetary strategies for large scale research and development organizations: with special reference to the Institute of Advanced Studies, Australian National University

Abstract

Problem: Present budgetary strategies or techniques in use by large and complex research and development organizations fall short of satisfying the special needs these organizations have, whatever the financial circumstances. A budgetary strategy, CRA is developed and presented for the purpose of removing these shortcomings. Methodology Adopted: A wide selection of literature and official publications dealing with budgeting was reviewed. This was complemented by the author's experience as a budgeting practitioner in the Institute of Advanced Studies, Australian National University, Canberra, and responses from a number of Australian universities to a questionnaire designed to provide information about current budgetary practices in use. Brief Resume: Changing financial circumstances, which can range from one of growth to one of stringency, have emphasised the importance of sound budgetary strategies and planning processes in large and complex research and development organizations. The goals and functions adopted for research and development work undertaken at Australian universities, and public and private research and development organizations are examined within the context of their operational modes, focussing particularly on those factors which effect the planning, approval and implementation of budgets. Special issues, such as "public accountability" obligations, the desirability of retaining budgetary flexibility and the requirement of integrating the budgetary and accounting systems are examined individually. It is issues of this kind which have not been addressed properly by budgetary strategies currently in vogue. Applying relevant conclusions reached by some notable organizational theorists, and drawing on the experiences of other organizations (both in Australia and overseas) it proved possible to isolate those special needs which warrant incorporation in a budgetary strategy better suited to large and complex research and development organizations. The new budgetary strategy developed in this dissertation has been accorded the acronym CRA (Core + Research Activity). Although a 'hybrid', the CRA budgetary strategy is designed to isolate the 'core' function, which represents the service and support facilities that under-pin research activities being pursued, from each research activity supported by the organization. Apart from the 'core' function each research activity becomes the basic unit for measuring budgetary and accounting performance. In selecting such a unit of measurement the main advantages are: each activity is readily identified permitting more effective control; unused resources can be isolated and redistributed to areas in need thereby optimising the practice of flexibility; and, lastly, it facilitates the integration of the budgetary and accounting systems. The need to supplement the CRA budgetary strategy with the processes of Resource Management and Strategic Planning is also argued. Although the CRA budgetary strategy was designed initially for large and complex research and development organizations (i.e., Australian universities and public research and development organizations), one of the conclusions reached is that it is also capable of being applied in any organization where, apart from the 'core' element, the operations can be separated into identifiable units.