"HOLISTIC \H_-'LIS-TIK\ ADJ (1926) 2: RELATING TO OR CONCERNED WITH WHOLES OR WITH COMPLETE SYSTEMS RATHER THAN WITH THE ANALYSIS OF, TREATMENT OF, OR DISSECTION INTO PARTS." (MERRIAM-WEBSTER'S COLLEGIATE DICTIONARY)
Specialized libraries are usually embedded in and supported by a diverse group of parent organizations: federal, state, and local governments; corporations; academic institutions; and associations or other non-profit organizations. Because so many organizations are represented in the specialized library field, budget formats vary widely, but most libraries prepare one every year.
Articles on the technical aspects of budgeting can be found in SLA's Information Outlook and other library publications. This article will examine the theory and reality supporting holistic organizations, their libraries, and their budgeting practices. Program budgeting has a closer affinity to holistic practices than do line item or performance budgets, and it is the program budgeting perspective from which this article is written.
Budgets are called by various terms: operating plan, planning tool, policy tool, medium of communication, and means of control, to name a few. What budgets do is allocate limited financial resources to competing organizational units. Many budgets also set standards against which actual performance is compared, thus revealing how effectively objectives are being met.
The following are some functions that budgets serve:
Communication tool. A budget communicates to staff the reality of available resources--human, technological, and financial. It also communicates the objectives that staff helped develop and committed to meet.
Planning tool. A bottom-up approach to planning is organizational learning in action. This is where staff buy into the planning and budget process and commit to working toward the fruition of their efforts and talents.
Contract. This is a binding agreement between senior management and the rest of the organization, a promise to allocate a determined amount of money to the library for agreed-upon objectives (Urban Institute and Metropolitan Research Institute, n.d., p. 5).
Major policy tool. How you, as a decisionmaker, spend your organization's limited resources is "perhaps the most important policy decision you will make during a fiscal year" (Urban Institute and Metropolitan Research Institute, n.d., p. 6).
The Holistic Approach
Holistic preparation of a budget focuses on the many aspects of the environment (see below) and of the library itself that will be affected. Holistic budgeting not only brings different parts of the library together, it concentrates on the interactions among those parts. The holistic approach is about organizational archetypes behind an event rather than about the event itself; about contradictions and inconsistencies and schisms and divergences rather than just trying to fix a situation; and about depending on principles of leadership in addition to theory and accepted social truths (McNamara, accessed June 13, 2003).
The holistic approach to budgeting is to engage people in the process from all parts of the system: library support staff, who may have a broad knowledge of operations but feel left out; end users, for their input and support for your purchasing decisions; your finance department, so they can learn what you need; reference staff, who may feel frustrated because important information sources are not on hand; technical services staff, who often need systems upgrades to process materials more efficiently; and vendors, so you can negotiate for discounts and multiple format purchases (Seer 2000, pp. 190-192).
A holistic approach to budgeting involves the entire organizational system. This leads us to consider concepts popularly known as internal and external environments. If we think of internal as the library itself, external would be the parent organization outside the library department. Further away, but still in the external environment, would be forces such as legislation, the economy, technological change, and competition, which affect both the parent organization and the library. Using this model, major problems that affect libraries can come from the external environment as well as from the library itself.
Chilean scientists Humberto R. Maturana and Francisco J. Varela argued that organizations' environments are not defined as internal and external; rather, everything that contributes to an organizational system's detriment or to its functioning is part of its environment, and all interactions affect the environment as a whole (Morgan 1986, pp. 236-247). Applying this model, the system would include vendors and suppliers, legislation, technology, and economic conditions. In many geographic locations, even the weather would be a recognized force. Libraries that subscribe to this model would be alert not only to the effects that the environment has on them, but how they in turn affect the environment. These libraries, rather than being reactive, would proactively facilitate change to the broader systems in which they operate.
Beckhard and Harris (1987, pp. 2-7) pose six key issues that challenge managers in the midst of institutional change. It is important to recognize the ways in which organizational change is crucial for libraries, for holistic budgeting incorporates input from each of these change issues:
"In response to increased worldwide competition, dramatic growth of technology, and rapidly expanding patterns of takeovers, mergers, and restructuring, many organizations have to transform their own shape" (Beckhard and Harris 1987, p. 2). The library, as part of a larger institution, cannot remain static as its parent organization changes. Conversely, the library can initiate change that brings about organizational transformation. Libraries have a different "shape" today than they did 15 to 20 years ago. Then, card catalogs were the norm; now, personal computers dot internal landscapes. Library services may have been free then; now, user fees are assessed to departments. Then, the first person who greeted the client was probably a professional librarian; now, that worker probably has not earned a Master of Library Science degree. Increasingly, libraries are becoming paperless--relying on online resources for information. The words "library" and "library school" were self-descriptive. Now terms such as "information center," "information services center," and "school of information sciences" are used. Libraries have not remained stagnant.
Changes in Mission
A library that is sensitive to ripples in its environment will react accordingly and change in tandem with the environment; or it may anticipate environmental changes and be prepared. Organizations that ignore or are not aware of their position in a changing market cannot sustain business. Libraries' mission statements may change to reflect either the narrowing of focus on a market or an expansion based on the breadth and diversity of a conglomerate. As the mission changes, so will the budget.
Changes in Ways of Doing Business
Environment, both external (economic, legislative, technological) and internal (profits, staffing, funding) move library personnel to market their expertise through differentiation of services. Libraries are competitive with the Internet at the same time they use its technology. As budgets shrink and demands for services increase, libraries are making more use of technology: networking, desktop Internet access, electronic catalogs, and Web access to journals and electronic databases. Some libraries have become entrepreneurial, and the trend is spreading.
Changes in Ownership or Administration
The prospect of a change in ownership or administration can be cause for anxiety. A merger or acquisition can substantially increase the budget if there is an increase in information needs; reduce the budget by cutting back on information services; or eliminate the budget altogether by eliminating the information function. Library managers must do their research and lobby with understanding senior administrators and with end users. Budgeting is difficult enough when the economy is stable or growing, but libraries are experiencing the consequences of economic ups and downs, cutbacks resulting from parent organizations' financial losses, and the insecurity that accompanies industry wide job loss.
Hard economic times change things; library funding is reduced, professional and support staff are cut back, programs are eliminated. Clients still require a certain range, delivery, and quality of services, so library management looks to information and communications technology to satisfy information demands. Initial expenditures for technological improvements may seem staggering, but in comparison to staff salaries and benefits, the outlay is generally considerably less. Also, the costs of salaries and benefits are repeated each year and tend to increase, while computer technology (except for online subscriptions) tends to be an occasional cost that decreases over time.
Changes in Organizational Culture
Organizational culture change affects budgets in ways we might not have envisioned 20 years ago. For example, benefits offered to couples regardless of marital status or gender will increase budgets.
Prentice (1983, p. 58) cites the human factor in budget preparation as a problem because of people's resistance to change. Leadership plays a big role in the change process. When workers are recognized as stakeholders and are involved in the process, and when their input is valued for improving their own jobs and their work environment, resistance begins to break down (Prentice 1983, p. 58). Not all resistance is inherently negative. Try to get at the root of the resistance, and you might find constructive input that supports the change process. Is this the process for a library to become a learning organization? It depends on the extent to which library leaders can successfully build a setting of mutual trust and system wide participatory engagement, in, which all workers contribute to the common growth. "A common characteristic of all learning organizations is that they view their people as ... people" (Mellander 1993, p. 189).
Getting to Budgeting
Suppose we embrace a holistic approach and invite all involved to the budget planning table. A fundamental consideration is "When do you need everybody in the organization to be involved in an event, and when will a critical mass of stakeholders do?" (Bunker and Alban 1997, p. 152). An adequate response might be "It depends." We must consider the breadth of our environment, the stance of our parent institution, the amount of available time, and the magnitude of people involved."[O] ur whole approach ... has not been one of imposition or laying on, but of working with people and bringing things out. And so we first bring out the people's views of the problems as they're real to them in the everyday work situations. We explore with them their attitudes in relation to those problems--how they contribute to them and affect their own work. Also, we look at that in terms of their colleagues in other areas--how those relationships might be affected.... So, we've been approaching it in a way that we've been creating ownership of the problems and, consequently, the solutions are emerging.... The next area has to do with budgeting basically--obviously, budgeting should fit what you're planning.... And so we're looking at program budgeting as another concept that seems to make sense" (Fletcher 1990, p. 36).
As allocations decrease, budgets reflect both external and internal environments. As goes the environment--"the world out there"--so goes the organization, and along with it goes the specialized library. Using the Maturana and Varela model (Morgan 1986, pp. 244-245), library leaders bring the "world out there" inside--the library extends the boundaries of its environment. Rather than waiting to see what will happen, library leaders involve the wider system by either changing with it or countering it, then trying to shape what happens. The library is not passively acted upon because it perceives itself as an active environmental component.
What happens to a budget during difficult financial times? Not every organization's economic woes are caused by a weak economy. Unwise marketing strategies, poor business decision-making, and consumer behavior can trigger bottom-line havoc. Under any circumstances, when the parent organization's income (or funding) falls short of expectations, the shortfall is passed along to divisional and departmental budgets, a process generally labeled as cutbacks. Bankruptcy filings by airlines, major retailers, telecommunications giants, and financial services companies account for big dollar losses in the economy. While each dollar spent nourishes the economy, the converse is also true: every dollar lost sends a negative ripple throughout the economy.
Symptoms of budget cutbacks can be seen in the workplace in increasing workloads, elimination of support staff, hiring freezes, across-the-board layoffs, and low worker morale. Let's look at some news topics and some comments about the situation. Notice the human concern as librarians do their best to maintain the integrity of service.
"As library staff sizes continue to shrink and budget pressures mount, libraries of all types are clearly doing more with less. Library functions have reacted to this dynamic in a number of ways, including refining the definition of their priority service markets; developing technology-reliant one-to-many information solutions; increasing user self-sufficiency; and redeploying staff and broadening job descriptions of library workers" (Strouse 2003, p. 14).
"We had to grapple. We tried to keep staff, but in the process our collections budget suffered. We reviewed spending on a quarterly basis, and if anything was left over, we used it for collections. That was not the best way to go because we needed to keep tip our journal acquisitions. We began to build a hole from which the libraries may never recover, for we needed to keep up our journals. We tried to salvage the periodicals budget, but five-year gaps were hard to put back together. I recommend looking at staffing and insisting on three-, six, and nine-month reviews and considering alternatives to letting staff go, such as trying position sharing" (B. Perry, former assistant director, research and collections, Smithsonian Institution Libraries, personal communication, April 8, 2003).
"External factors weigh in the budgetary process to the extent that they affect the overall financial picture of the university and, thus, affect the library's budget.... The worsening economy, stock market volatility, the war in Iraq have all negatively impacted the university's financial picture and will likewise affect the library's 2004 budget" (D.C. Maratos, librarian, Montgomery County Campus, Johns Hopkins University, personal communication, April 4, 2003).
"Budget Woes Could Close Specialized Libraries at Dartmouth" (Library Journal, October 23, 2002).
Traditionally, a line-item budget focuses on expenditures (salaries, equipment, and supplies), while a program budget emphasizes expected results in major program areas (services and activities) and calls attention to long-term, organization wide strategies and objectives by linking them to revenues and expenditures. A program budget allows leaders to make informed decisions regarding organizational goals.
A program is a hierarchically classified arrangement of major activities that support the strategies and objectives of the library, which in turn support the information needs of the parent institution. Here are some advantages of a program budget (Urban Institute and Metropolitan Research Institute n.d., p. 10):
* It produces an easily understood document. A program budget shows organizational support in a format that facilitates whole-system understanding of the budget's intent and of the services the library offers.
* It emphasizes library goals, needs, and capabilities. A program, budget can align library objectives with the financial ability to support them.
* It achieves optimum use of the budgetary allotment by emphasizing informed planning and management decisions. A program budget serves as a guide.
* It serves total organizational interests. Input and feedback from the whole system contributed to the preparation of the budget. The approved budget reports back to stakeholders who participated in the budget planning process, and informs them of approved programs and services that affect their organizational interests.
* It encourages combining services for the sake of efficiency.
A program budget makes optimal use of limited resources by minimizing conflict and overlap among projects.
An approved budget is a final product. It reflects the whole system's efforts to express perceptions of how to make the most of organizational strengths and opportunities, how to strengthen organizational weaknesses, and how to ward off threats to the library community. Senior management has approved a document that is management's financial agreement with staff.
Beckhard, Richard, and Ruben T. Harris. (1987). Organizational Transitions. Reading, MA: Addison-Wesley Publishing Company.
Bunker, Barbara Benedict, and Billie T. Alban. (1997). Large Group Interventions: Engaging the Whole System for Rapid Change. San Francisco: Jossey-Bass Inc.
Fletcher, Beverly. (1990). Organization Transformation Theorists and Practitioners: Profiles and Themes. Westport, CT: Praeger Publishers.
McNamara, Carter. (n .d.). "Holistic Organization Development: A Paradigm for the Future." http://www.mapnp.org/library/misc/new_OD.htm (accessed June 6, 2003).
Mellander, Klas. (1993). The Power of Learning: Fostering Employee Growth. New York: McGraw-Hill.
Morgan, Gareth. (1986). Images of Organization. Newbury Park, CA: SAGE Publications, Inc.
Prentice, Ann E. (1983). Financial Planning for Libraries. Metuchen, NJ: The Scarecrow Press, Inc.
Seer, Gitelle. (2000). Special Library Financial Management: The Essentials of Library Budgeting. The Bottom Line, Bradford, England
Strouse, Roger. (2003). "Demonstrating Value and Return on Investment: The Ongoing Imperative." Information Outlook; Washington
The Urban Institute, Washington, DC, and the Metropolitan Research Institute, Budapest. "Program Budgeting: Modernizing Financial Management for Hungarian Local Governments." http://www.urban.org/PDF/prog-budget.pdf (accessed June 6, 2003).
D'Llle Asantewa is an independent contractor and a doctoral student in human and organization development at the Fielding Institute. She can be reached at email@example.com…