Organizations act strategically when faced with institutional constraints. The same goes for managing socio-political and cultural institutions. Effective management of these factors is no less important to an organization’s survival than its ability to exploit market opportunities. However, much of the organizational literature on these issues is dominated by field-level studies that fail to consider the strategic context. This short article aims to make the case that a thorough understanding of the institutional complexities of organizations is key to a more productive research agenda.
An organization’s strategic efforts have an outsized effect on its competitive positioning. Whether an organization is a burgeoning startup or a Fortune 500 firm, a clear grasp of its institutional landscape is key. Moreover, the strategic use of resources is an ongoing process of assessment and evaluation. Having a transparent, well-articulated and comprehensible budget is essential to making informed resource choices.
Using the budget as a springboard, this brief explores the role of institutional strategies in enhancing an institution’s performance. A number of studies have highlighted the relative merits of different approaches to enhancing the performance of a corporation or government agency. For example, the University of Utah has used a number of effective techniques to improve its debt management capabilities. These include the creation of a Budget Advisory Committee and a Committee on Efficiency and Entrepreneurship Initiative.
In addition, a comprehensive fiscal strategy has been implemented using an All Funds Budgeting system. This method not only provides a holistic view of the university’s academic objectives, but also encourages attention to generating more revenue sources. As a result, the University of Minnesota is undertaking a major capital campaign, which will assess how it can best allocate tuition and other resources to generating units and other areas of campus life.
Lastly, the most effective and efficient uses of resources are also part of the annual budget considerations. The University of Utah has been able to implement its plan by ensuring that the allocation of its budgets is well-balanced. The budgeting model has been enhanced by allocating funds to the generating and administrative units according to their respective strategic goals. Furthermore, the University of Utah has used a budgeting system to clearly delineate returns on its investments.
Although the budget is by far the most visible aspect of the University of Utah’s fiscal system, other resources are also required to meet its goals. Specifically, human, financial, and technical resources are required to achieve its objectives. One of the best ways to maximize these resources is to effectively manage the relationships that exist between the different parts of the organization. This is especially true in the context of a university. By fostering a more collaborative and transparent approach to determining resources and utilizing them to their fullest potential, an organization can enhance its competitive position.
Overall, the most important lesson from this study is that a good understanding of the various components of a comprehensive and transparent budget can facilitate more strategic thinking and planning. However, a more enduring lesson is that the effectiveness of institutional strategies will be affected by a number of factors, including the economic climate, the level of competition in the industry, and the level of technological and institutional sophistication in a particular region.