The practices of program budgeting, costing, and strategic planning in higher education are examined. It is suggested that many postsecondary administrators and other groups have viewed a particular technique as the answer to their problems and converted a valid management technique into a management fad. Program budgeting, a system whereby the organization's programs or outputs, rather than its subunits, are allocated resources, is most often identified with Planning Programming Budgeting Systems (PPBS). It is claimed that PPBS was adopted by higher education soon after its first uses in government settings without evidence to suggest its applicability and without careful consideration of its uses and limitations. Among other problems is the fact that higher education is unable to specify the nature of its outputs, much less to measure them for cost-benefit or cost-effectiveness calculations that underlie the utility of PPBS. Additionally, terms such as "cost,""benefit," and "program" were used as if they had definitive and commonly understood meanings when they did not. In regard to costing, it is suggested that the lack of a usable production function has forced higher education to cost activities rather than outputs and has imposed limitations on the usefulness of the cost data. A second failure to adapt to a new setting is the adoption by state agencies of costing techniques developed for institutional use. It is claimed that, to date, strategic planning implementation parallels that of PPBS: implementation is beginning to occur concurrent with, not following conceptual development. Many of the features of colleges limit their options and potential responsiveness to strategic change: the norm of collegial decision-making, tenure and specialization of faculty members, and interdependencies in the curriculum. It is suggested that the role and utility of the rational model and of other decision making models in the context of higher education institutions are important considerations. (SW)