Organizational theorists have long examined the implications of market-oriented policies for public agencies. Current research often aims to understand the effects of policies imposed on organizations by external stakeholder groups, but few studies have attempted to gain a better understanding of what mechanisms cause agencies to select into these strategies. The purpose of this article is to understand, first, which factors make an organization more likely to adopt a decentralized, market-based budgeting system-termed "responsibility-centered management (RCM)-and, second, whether this type of system has implications for organizational performance. Using data on doctorate-granting public and private nonprofit four-year universities in the United States, the authors find that mission, resource dependence, and state party control influence the take-up of RCM. In terms of effects, RCM creates winners for graduation rates (white students) and degree production (science, technology, engineering, and math departments), which raises questions of equity across groups.