Academic freedom: the typical urban school district's personnel and budgeting systems leave principals without much say in hiring teachers or allocating resources. The decentralization movement may just change that - forum

Education Next, Winter, 2004 by William G. Ouchi

Defining Decentralization

Why is budgetary control so crucial to decentralization? Consider the management steps that principals must follow if they are to take charge of their schools. They must:

* Identify the educational needs of each student in the school.

* Determine the teaching, counseling, and other staff resources that will be necessary to meet each student's needs.

* Build a staffing plan that combines the full-time, part-time, outsourced, credentialed, and noncredentialed personnel necessary to provide those services to students.

* Design a school schedule that enables the principal to use staff creatively, in a way that frees up enough money to acquire all of the part-time and outsourced resources deemed necessary to meet the students' needs. For example, a school might decide to have some classes with 40 students in them, meeting for two hours every third day. This might enable the school to teach reading in small groups of five students each.

No two schools have the same student populations. Thus no two schools should have identical staffing or schedules. No central-office administrator can perform this kind of detailed planning at the school level. As a result, each principal must have budgetary control in order to create the proper conditions for teaching and learning.

Our study classified the nine school systems into three organizational types, based on the taxonomy created by Oliver Williamson in his 1975 book Markets and Hierarchies. "Unitary" districts like New York, Los Angeles, and Chicago are the traditional kind of organization. In these, most important decisions are made at the central office. Schools are allocated a formulaic number of regular, special-education, physical-education, and other teachers, and they are not free to change their staffing except through an onerous process of waivers. Decisions on professional development, curriculum, and materials are made at the central office, which also controls the budgets for building maintenance, utilities, and other necessities.

In "multidivisional" districts such as Seattle, Edmonton, and Houston, the principal receives an allocation of funds and then is free to decide how best to spend that money on staff, materials, computers, school maintenance, utilities, and so on, much as the managers of corporate divisions are given wide-ranging authority and are held accountable for the bottom line. In a real sense, the principal is the CEO, having the power to decide virtually all matters except teachers' pay, which is set by union contract. The possibility that a principal might become capricious can be held in check through the use of annual surveys of all school employees, students, and parents, who are questioned regarding their view of the principal's leadership along with other elements of school performance.

The Catholic archdiocesan schools may be characterized as "holding companies" In these systems, the central office has very limited power over the principals. Each school is on its own to meet its budgetary needs or to go out of business. One result is that the central-office staff in holding-company districts is very small. The central office for New York City's archdiocesan schools, for instance, has a staff of only 22 people, including secretaries, to serve a system with 115,000 students.