Cutback Management

The systematic process employed by political and managerial leaders to guide their organizations through periods of resource scarcity. The term emerged in the 1970s and 1980s, when public administrators, particularly at the state and local levels, [Page 131]were challenged by economic stresses attributed to stagflation, a combination of inflation and high unemployment. In subsequent years, attention to cutbacks has also been associated with increased political support for “smaller government.”

Experts reject the reliance on incremental, across-the-board cuts as an inadequate strategy for dealing with such challenges and recommend that the process begin with a more careful analysis of the organizational, programmatic, economic, and political environment. Cutback management requires leaders to look at the agency's mission and priorities, legal mandates, and the potential impact of cuts on performance, morale, and employee retention. Opportunities for innovation are considered, including options such as fees, contracting out, layoffs, and hiring freezes. Identification of and communication with stakeholders is urged to gain their support for change.

Organizations slated for cutbacks may adopt various strategies to resist them, including targeting popular programs for reduction or elimination. Sometimes conflicts are fought internally as units of an organization seek to protect their own programs and resources. Skilled leadership and widespread participation in planning have been regarded as keys to successful navigation of the cutback experience.