University budgeting: internal versus external transparency

Abstract

Purpose The analysis intends to clarify whether higher education institutions place as much value on internal transparency as on external transparency. This study aims to analyze the university budgeting process as a reflection of internal transparency. It also aims to identify the weaknesses of the budgeting process regarding transparency in order to improve decision-making. Design/methodology/approach A case study that applies mixed methods – documentary analysis, observations and interviews – has been conducted. To study internal transparency, the model of three levels of transparency of Biondi and Lapsley (2014) has been applied to the budgeting process of a university. Then, the results have been compared to the external transparency of this institution. Findings While external transparency is achieved, internal transparency in the budgeting process is far from optimal in the case of study. An improvement in transparency of the budget process can promote the engagement of stakeholders in the process and achieve better governance. Research limitations/implications The general inductive approach is not as strong as other approaches in the area of theory or model development. However, it does provide a simple approach for deriving findings linked to this research’s questions. Practical implications Trust issues and external accountability appear to be more relevant than internal transparency for universities. However, improving the three levels of transparency along the budgeting process could motivate collegiate members to reinforce accountability, as it requires them to effectively communicate their actions and decisions to their represented. Originality/value This paper seeks to situate transparency as an attribute of university governance, contributing to the scarce literature on transparency, internal and external, in the university. The study compares the approach of this university to external transparency – which relates to accountability – with internal transparency – a concept that links to corporate governance. This study uses the novel lens of Biondi and Lapsley model (2014) to study internal transparency, focussing on university budgeting as a key management tool.

Perceptions on Regulation and Asymmetry of Information as Critical Factors in University Governance in Latin America

“…One of the dimensions of university governance is transparency, which can be internal or external to the organization, and allows to legitimize the existence of the organization in society. From the point of view of good governance, this dimension can be considered both as a condition or a strategy to increase institutional credibility before internal and external stakeholders (Abello-Romero et al, 2019a;Conesa-Carril et al, 2020;Sukrismo, 2020). The promotion of transparency, and the development of incentive mechanisms that encourage the agent to reveal their hidden knowledge, allows information asymmetry to be reduced (Bergh et al, 2019;Ghafoor et al, 2019).…”