Managing Finance, Resources and Stakeholders in Education

Lesley Anderson, Ann R J Briggs, Neil Burton

• Publisher: SAGE Publications Ltd
• Year: 2001
• ISBN:
  9781446273067
• Edition: 1
• Topic: Didattica
• Subtopic: Amministrazione nella didattica

`The text is challenging and stimulating and structured to provide the reader with an accessible synopsis of the range of current trends and solutions in the area of educational financial management being applied in the UK and the global context? - Improving Schools

Managing Finance, Resources and Stakeholders in Education provides readers with knowledge and understanding of the theory and practice of managing finance, resources and stakeholders in schools and colleges. Written specifically for those studying for an academic qualification at masters level in educational management, it provides self-study material and links to other key texts in the field.

The authors deal with the links between finance, resources and stakeholders in the context of school and college self-management. Examples are drawn from international settings as well as from the United Kingdom. Building on an examination of theoretical perspectives, practical considerations and applications are examined in a format, which encourages the reader to explore the context of their own educational institution.

1. The significance of finance, resources and stakeholders in education

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This chapter considers:

• financial and resource management;
• managing stakeholders; and
• self-management.

Introduction

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Changes in the structure of public education systems around the globe during the last two decades of the twentieth century have resulted in new responsibilities for many educational managers. In particular, the effective and efficient management of finance and resources is now crucial for the success of individual institutions. At the same time, these changes mean that schools and colleges can no longer (if they ever did) regard themselves as ‘separate’ from their local communities and the various ‘stakeholders’ who have an interest, and often an investment, in the provision of high-quality education. The shift to more open enrolment and formula funding brings with it the need for schools and colleges to compete to recruit and retain pupils and students. Educational managers operating within this environment must now be concerned with marketing their organisation and working with the different stakeholder groups in ways that maximise the potential for mutual support, both direct and indirect, between the school or college and its stakeholders. The management of resources, including finance, and the management of stakeholders, or external relations as it is sometimes described, are then implicitly linked and, thus, they are considered together in this text.

As a school or college manager you are likely to be involved in some, or all, of the following activities:

• Preparing a budget for your school/college, faculty, department or course.
• Considering and controlling the costs of certain educational activities.
• Deciding resource allocation within your school/college or department.
• Securing additional funding and/or resources for your school/college or department through entrepreneurial activities.
• Working closely with your governing body.
• Responding to the needs and concerns of parents.
• Developing and maintaining links with local businesses, industry and commerce.
• Preparing and implementing a marketing strategy for your school or college.
• Accounting for delegated spending and demonstrating value for money.

This core unit addresses these, and other, issues in the management of finance, resources and stakeholders. In this opening chapter we make the vital links between these aspects of management and the core functions of any educational organisation - those of learning and teaching. Additionally, we consider the policy context of self-management. We focus on this approach for two reasons. First, it has direct relevance for students working in a growing number of locations. Secondly, there is an implicit relationship between the level of autonomy experienced and the opportunity and flexibility to manage finance, resources and stakeholders. Thus we believe the development of knowledge and understanding about self-management is pertinent to all students of educational management as it will enable you to put your own experiences of management into context.

Financial and resource management

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It is a basic premise that all educational institutions exist to enable learning to take place. To whatever extent they are held accountable, and by whatever means they are ‘judged’, their success, or otherwise, is based upon the ‘effect’ they have upon their students’ learning. This effect is achieved in a variety of ways although it is always dependent, to some extent at least, on the resources available. Thus, there is an explicit link between the core purpose for which any educational organisation exists, that is, to promote learning and teaching, and the management of resources.

Reading and

Please read Rosalind Levačić’s chapter, ‘Linking resources to learning outcomes’, Chapter 1 in Coleman, M. and Anderson, L. (eds.) Managing Finance and Resources in Education.

In this chapter, Levačić asks ‘Do resources matter?’ She goes on to provide a comprehensive framework for the analysis of resource management in educational organisations. As you read, try to summarise the key points of the chapter. Our summary is shown below, but please do not read it until you have completed the activity.

Key points from the chapter

• Resources are necessary both for the operational core (teaching and learning) and for providing the environment within which learning can take place.
• The impact of the external environment on the educational organisation is crucial to its survival and success.
• The purpose of resource management and how it is, or should be, undertaken depends on the organisational perspective adopted.
• The rational model is predominant in the practice of resource management - official pronouncements on the subject are made from this perspective.
• The rational model conceives the link between resource inputs and learning outcomes as a production process.
• The concepts of effectiveness and efficiency are not easy to operationalise because of the highly diverse and intangible range of learning outcomes that are valued by educational organisations.

The second point in this list highlights the link between the management of resources, including finance, and the other aspect of this module - the management of external relations or stakeholders. As mentioned earlier, the two are implicitly connected as will be demonstrated throughout this core text. Therefore, we now move on to open discussion on why the management of external relations is important.

Managing stakeholders

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The changes in the nature of educational systems have meant schools and colleges are now unlikely to succeed as ‘closed’ organisations that are unaware of, and unreactive to, their communities. As Lumby and Foskett (1999, p. ix) explain in the reader, Managing External Relations in Schools and Colleges, schools and colleges are ‘at the centre of a web of relationships with individuals and groups’. Exactly who these groups and individuals are, and how they can be managed, will be considered later in this volume. The point here is to highlight why they need to be managed and in doing this make the connection between finance, resources and stakeholders.

An implication of the basic premise that schools and colleges exist to enable learning must be that they require learners. Thus a fundamental reason for managing community links is connected with the recruitment of students and pupils. However, the reason is more than just one of viability. An implication of self-managing schools and colleges is that, alongside devolution of decision-making, the funding system applied to them is (usually) based on student/pupil numbers and the greater the number of students/pupils the college/school can recruit, the larger its revenue grant. There are, of course, limitations on the number any one institution can accommodate and educate but this figure falls at the extremity of a range within which it is in the school or college’s interest to increase its recruitment. (This issue is considered in detail in Chapter 3.) Hence, the management of external relations is linked directly to the level of funding achieved.

Another way in which a school or college can generate income and/or increase its resources is by developing its relationship with other parties, either locally, nationally or even, possibly, internationally. Business, industry, commerce, the government, individuals are all possible sources of resource and it is important a school or college manages its contacts with them effectively. Thus, this is another reason why the management of external relations is important and why it is linked to financial and resource management. (Again, these matters are explored in much more detail in Chapter 5.)

However, perhaps the overriding reason why the management of external relations - or stakeholders - is important for schools and colleges operating as ‘open’ organisations is linked to their accountability. The move towards self-managing schools and colleges, as described later in this chapter, not only involves the devolution of financial and managerial control to more local levels but frequently also brings with it parental rights to choose schools. (There is an assumption that college students choose the college to which they apply.) Thus, schools and colleges are not only held accountable to their direct funding bodies, usually national and local government or a government quango, but need also to be responsive and responsible to a whole range of other stakeholders in the form of parents, industry and business, the local community and so on if they are to survive and be successful. Accountability, then, is an important dimension of this module and it will be considered in more detail in Chapter 5.

Reading

Please read Tony Bush’s chapter, ‘The vanishing boundaries: the importance of effective external relations’, Chapter 1 in Lumby, J. and Foskett, N. (eds.) Managing External Relations in Schools and Colleges.

In this introductory chapter, Bush explores reasons for the growing importance of managing external relations - or stakeholders - and among them he includes the impact of self-management. We have summarised the key points from the chapter below. When you have read the chapter, compare your own list with ours. Please do not look at ours until you have read the chapter.

Key points from the chapter

• The emergence of school and college self-management in many countries has enhanced the importance of effective management of stakeholders.
• Educational institutions are now generally characterised as ‘open systems’ with permeable boundaries.
• Effective leaders and managers adopt a proactive approach, build partnerships with stakeholders, research so they can anticipate change and ensure that marketing is integral to their strategic planning.
• Successful schools and colleges adopt an inclusive approach to working with their stakeholders.

At this point it is important to state that, although schools and colleges have been coupled together in all that has been said so far, there are differences between the two that need to be considered. The management of finance and resources in colleges in the post-compulsory education sector differs in a number of ways. In scale, colleges are generally much bigger than schools; thus their budgets are usually of a different magnitude. They differ in nature because it is more usual, and possibly acceptable, for colleges to charge their students or their employers for the education they receive. Generally, government-provided education at school level is ‘free’. Finally, there is a difference in the security schools and colleges experience - once a pupil has entered a school, mostly that resource is secured for a number of years. College students can, and do, leave at any time. Thus, as you work through this core text, you are encouraged to compare and contrast school and college management.

We now move on to consider self-management as a context for the management of finance, resources and stakeholders. We acknowledge that the concept of self-management has not been implemented universally and, indeed, where it has been introduced, its operational level varies considerably. However, it is of interest to school and college managers across the world in terms of providing a backdrop for the opportunity for the management of finance, resources and stakeholders at institutional level. In focusing on self-management we want to emphasise we are not trying to suggest that self-management is in any way the desired approach or that it is superior to other organisational policies. Indeed, we acknowledge the existence of counter literature (for example, Ball, 1990a; 1990b; Bowe et al., 1992; Smyth, 1993; Ranson, 1996) in which it is argued that self-management is a fallacy and that even in schools that are described as self-managing, resource decisions may be relatively limited. In many countries schools do not have control of staff recruitment and staff rewards and, consequently, the percentage of the resources they are actually responsible for is very small. It is in this context that we present the rest of this chapter. We begin the discussion by considering what we mean by a self-managing school or college.

Self-management

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The term ‘the self-managing school’ is generally associated with the Australian writers, Caldwell and Spinks. They used it first in 1988 as the title of their highly successful book in which they define a self-managing school as ‘one for which there has been significant and consistent decentralisation to the school level of authority to make decisions related to the allocation of resources’ (Caldwell and Spinks, 1988, p. 5). By the time they were writing their third book on self-management, Caldwell and Spinks’ definition had been refined as a result of their work over the past decade as well as being influenced by the work of Bullock and Thomas (1997). This third book emphasises the centrality of decisions on resources in self-management:

A self-managing school is a school in a system of education to which there has been decentralised a significant amount of authority and responsibility to make decisions about the allocation of resources within a centrally determined framework of goals, policies, standards and accountabilities. Resources are defined broadly to include knowledge, technology, power, material, people, time, assessment, information and finance (Caldwell and Spinks, 1998, pp. 4-5).

The authors define the various components they identify as contributing to the resource allocation of a school or college as follows:

• knowledge - including the ...

Table of contents

• Cover Page
• Title
• Copyright
• Contents
• The authors
• Acknowledgements
• Introduction
• 1. The significance of finance, resources and stakeholders in education
• 2. A UK perspective of self-management
• 3. Financial management in schools and colleges: theoretical perspectives
• 4. Delegated financial and resource management
• 5. Managing external relationships: theoretical perspectives
• 6. Managing relationships with stakeholders
• 7. Working with governing bodies
• 8. Conclusions: a final word on accountability
• Appendix: Self-management in education - vignettes from around the world
• References
• Author index