Agreement on mission and institutional responses to decline

AGREEMENT ON MISSION AND INSTITUTIONAL RESPONSES TO DECLINE

B a r b a r a P a r k e r

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This study of 56 small- to medium-sized institutions of higher education examines the causal paths between agreement on mission and severity of decline as they predict two types of responses to decline. The mediating effects of causal attributions are also examined. The results suggest that agreement on mission is the better predictor of responses; organizations with a high agreement on mission select fewer operating and strategic responses. An interpretation for these findings is that organizations with a high internal agreement on mission more selectively pursue responses to decline. Decline severity is shown to be of limited value in directly predicting responses to decline for this sample.

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There is ample support for the idea that universities are both complex organizations and difficult to manage. Collegial governance, diverse and conflicting goals, and loosely coupled systems are only a few of the organizational characteristics that are believed to contribute to the complexity of university management (Cyert, 1978; Cohen and March, 1974; Weick, 1976). Moreover, it is generally acknowledged that management problems associated with the nature of the educational enterprise are exacerbated and increased under conditions of institutional decline (see Cameron and Chaf- fee, 1984; Whetten, 1981).

One recommendation for managing decline in higher education institutions is to borrow strategic management techniques from the private sector (Kotler and Murphy, 1981). These techniques typically emphasize the role of external environmental conditions, and the advantage of this approach for higher education is that it does encourage administrators to look beyond internal events to monitor external events and to examine the relationships among external and internal events. For example, a decline in enrollments both may reflect external demographic changes and may have an impact on

Barbara Parker, School of Business, University of Tennessee, Chattanooga, TN 37403.

Research in Higher Education © 1986 Agathon Press, Inc. Vol. 25, No. 2

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RESPONSES TO DECLINE 165

internal events, for example, good employees may leave (Hirschman, 1970). The advantages associated with the strategic management approach are

offset by evidence that much of decline research in the private sector emphasizes the determinancy of external events (Hambrick and Schecter, 1983; Hofer, 1980; Hughes, 1982). This emphasis may find few advocates in higher education, particularly those administrators who regularly witness internal events--for example, interdepartmental competition for resources-that give substantial shape and substance to institutions of higher education. This particularist (and more internally focused) approach to higher education is supported by a literature that argues for the unique character of individual institutions (Chaffee, 1984; Chaffee and Krakower, 1984; Zam- muto, 1983). In summary, exhortations to adopt strategic management techniques in higher education may run counter to expectations that universities and colleges are highly individualistic and might then requb"e highly individ- ualized programs and plans in the event of decline.

A second limitation with an external focus is that decline conditions may draw attention inward rather than outward. Intensification of conflict (Hermann, 1963; Hirschman, 1970; Levine, 1978, 1979; Whetten, 1980), increased pluralism (Pfeffer, 1981; Pfeffer and Salancik, 1978), decreased morale (Bozeman and Slusher, 1978; Whetten, 1981), and voluntary turnover (Hirschman, 1970; Levine, 1979) are all effects of decline. An administrator facing daily evidence of one or all of these effects may find it difficult to attend equally to both external and internal events.

In effect, administrators may feel trapped by prescriptions for strategic management in an environment where business as usual has a strong internal focus. This dilemma is the basis for the research described in this paper. The study and its results examine both external and internal factors and their relative impacts on responses to decline.

The practical implications of this research are reflected in results indicat- ing that while both external and internal events are useful in understanding responses to decline, subjective factors, particularly internal agreement on mission, are far more useful in predicting responses to decline for this sample than is the externally produced severity of decline. These results are the basis for an argument that a critical dimension of response to decline is how members of the dominant coalition perceive decline. This suggests that under conditions of decline, an important managerial function may be to interpret external events for organizational participants. For example, demographic change leading to enrollment decline is subject to different interpretations, some of which are inability to compete with peer institutions for students, poor recruiting, and absence of high-demand academic programs.

Without a shared interpretation, these differing opinions on cause within

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the same institution may very well lead to disparate solutions. Therefore, the administrator must deal not only with the fact of decline, but also with internal conflict over what is happening and what must be done. The argument here is that the secondary and internal level of conflict may be reduced when administrators seek consensus on the cause and meaning of the decline.

A second research result suggests that internal agreement on mission may be a stabilizing factor for institutional participants. However, contrary to prior research, these results suggest that the stability implied by internal agreement may produce either positive or negative synergy in organizations that experience decline. The following descriptions of the research design and variable measurement outline the study questions and provide examples to support the conclusions stated above.

STUDY METHODS

Public and private sector research on decline was reviewed. This review was the basis for the conceptual model of the decline/response process displayed in Figure 1. More specific descriptions of variables and their meas- urements follow the snapshot view Figure 1 affords of the literature as a whole. In the interests of economy, the 16 hypotheses that state anticipated path relationships are not reviewed here. Instead, those relationships are contained in parentheses along each directional path. The paper itself is confined to a comparison of the external and internal causal variables and their effect on perceptions and responses, and it includes general findings that appear to have greatest relevance to decline management in higher education.

The holistic view that Figure 1 affords reflects a body of literature in which severity of decline (an external causal factor) and internal agreement on mission (an internal causal factor) are viewed as direct causes of responses to decline. As the figure indicates, the responses studied here are of two general types: operating and strategic. The arrows drawn from each causal variable to the effect variables reflect these relationships; the signs contained within parentheses indicate the hypothesized direction of relationships, while the numbers outside parentheses are observed relationships.

A second general approach suggested by the literature and reflected in Figure 1 is that the causal variables also have an indirect effect on responses to decline. This indirect relationship occurs because the causal variables have an impact on other factors which themselves shape responses. For this piece of research, dimensions of decline attribution were chosen as perceptual factors that mediate responses to decline. For example, the theorized direct effect of severity of decline on operating responses is accompanied by the

RESPONSES TO D E C U N E 167

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k (+/-1 ~ hypothesized direction of relationships numbers and signs atong paths indicate observed path relationships

FIG. 1. Model of the decline/response process,

indirect effect that decline has on response via perceived causality. These relationships are represented by the arrows traveling from cause, through mediating, to effect variables.

The conceptual model represented in Figure 1 was operationalized and tested on a sample of 56 small- to medium-sized institutions of higher education. These data were examined using LISREL V, a technique consid- ered appropriate to answer questions related to examining direct and indirect effects of causal variables on effect variables (Asher, 1983; James, Mulaik, and Brett, 1982; Kenny, 1979).

Figure l illustrates both the challenge and the limitation of research on

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this topic. The model is parsimonious and, as such, is limited in its ability to represent the complex interrelationships we see in higher education. Addi- tionally, the parsimony of the model reflects how little empirical research we have available in studying response to decline. These two limitations are also represented in the research described and the results reported here. The conceptual view and its measurement are more complex than a single variable model, but not nearly so complex as we might wish. Thus, the major contribution of this work may be the insight it provides for solving more complex problems of response to decline in higher education.

Data Collection

The sample of 56 small- to medium-sized colleges and universities was identified on the basis of representation in two databases. -The first is HEGIS tapes, from which declining institutions wereidentified according to the experience of enrollment decline.

A second source of data is NCHEMS' Institutional Performance Survey (IPS) and Supplement administered to members of the dominant coalition at 334 institutions in 1983. The IPS is a 183-item questionnaire that examines a variety of participant perceptions in institutions of higher education, including organizational performance and actions, strategy, changes in the institution's external environment, changes in enrollment and revenues, institutional characteristics and type, and internal decision processes. The response rate for the IPS was 70.6% for administrators and 61.9% for faculty respondents. Faculty respondents were primarily department heads and others in similar positions.

IPS measures were used in this study to examine perceptions of internal agreement on mission and perception of cause, controllability, and stability of decline (see Figure 1). The perceptual responses were taken in the aggre- gate in order to reflect an overall institutional perception. Tests of differences between the two types of groups (administrators and faculty) on the perceptual variables examined in this study indicate that there were no statis- tically significant differences in responses based on membership in one group or another.

The supplement to the IPS was completed b y institutional research officers at declining institutions. The instrument asked these respondents to indicate which of 35 events had occurred at their institutions between 1978 and the time of the survey. These events were all actions that higher education organizations were expected to pursue in response to external threats to the institution (Mingle, 1982). The responses are the effect variables "operating responses" and "strategic responses" represented in Figure 1.


Sample

The total sample of 56 for this project was composed of small (61% had enrollments between 200 and 2,500 students) to medium-sized institutions (2,501-10,000 students) that met the enrollment decline criteria described below, and whose members had returned usable faculty and administrative responses to the two parts of the IPS. An examination of these institutions indicates that they are fairly homogeneous as a group; 26 are comprehen- sive-type institutions, while 25 are general baccalaureate institutions. Only 1 organization is a major doctoral institution; 4 are specialty types of institutions, for example, business, divinity, or teacher preparatory schools. Forty-nine percent of the sample are public institutions. The organizations were fairly representative of each geographic region of the U.S.

Severity of Decline

In the research, decline has been revealed through intensive case studies (Bibeault, 1982; Chaffee, 1984; Hamermesh and Silk, 1979), content analyses of secondary sources (Miller, 1977; Schendel, Patton, and Riggs, 1976), and empirical research based on large-scale databases including PIMS (Hambrick and Schecter, 1983), COMPUSTAT (Harrigan, 1980), and HEGIS (Chaffee, 1982; Zammuto, 1983). This range in approach is matched by an equally broad range in how decline is defined. However, two themes emerge that best describe the link between decline and response: the level of severity attracts organizational attention (Zammuto, 1983), and duration of decline holds that attention (Schendel and Patton, 1976). Enrollment decline was chosen as an external event that might be expected to precipitate response; enrollment activity is an indication of the availability of raw mate- rials for the educational process and is an indirect as well as a direct source of revenues. Both are important resources for institutions of higher education.

The measure of decline severity is enrollment decline from beginning year 1978-1979 to ending year 1981-1982. The four-year decline period is consid- ered adequate because it is long enough to assume that the decline attracts organizational attention. These particular years are those immediately prior to the 1983 survey that assessed perceptions and responses. Mean decline for this sample was 12%. The variable was reverse-coded in order to facilitate interpretation and discussion.

Agreement on Institutional Mission

A measure of internal mission agreement is used in this study as one

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means of assessing cohesion among members of the dominant coalition. It is presumed that cohesion around mission is a mechanism by which organizational actions can be pursued. The rationale for using this approach is supported by two sets of research. The first finds its roots in studies of organizational behavior which argue that the dominant coalition enacts the organization's relevant environment as the result of its members' perceptions and interpretations of events in the environment (Cyert and March, 1963; Miles and Snow, 1978). This suggests that perceptions and interpretations among members of the dominant coalition lead to organizational responses, which themselves realize future states for the organization.

The second argument for examining internal agreement on mission is tied to what has been called by various names in higher education research; this is the notion of culture, saga, or mission (Chaffee, 1985; Clark, 1972; Dill, 1982). While the name assigned to the construct may vary, the general argument is that strong culture is a useful t0ol for the organization and for the researcher. At the organizational level, strong culture is a source of internal cohesion (Masland, 1985). For the researcher, culture becomes a handle for understanding and interpreting actions. The argument for the importance of culture studies in higher education extends beyond the public sector. Parallels can be found in the business literature that support an argument for the cohesive force of strong cultures (Deal and Kennedy, 1982; Peters and Waterman, 1982).

Organizational cohesion produces a shared focus for pursuing institutional action. This focus is presumed to be useful to universities and colleges under any circumstances because it is a mechanism by which an otherwise diffuse set of constituents view themselves as members of a single commu- nity (Clark, 1972). In his review of the study of culture in higher education, Masland (1985) lists some of the other benefits associated with a strong culture, among which are that it provides commitment, order, and meaning to organizational members and clarifies the organization's expectations of them. The confusion produced by low morale, high turnover, and increased conflict associated with decline may place great demand on characteristics such as order, meaning, and clear expectations.

When assault appears to be coming from external sources-for example, from the decreasing pool of traditional college-age students (U.S. Bureau of the Census, 1975)-organizations need less disruption internally, not more. Because a strong culture is believed to provide order and meaning, its pres- ence under decline conditions serves to reduce the potential for conflict, pluralism, and turnover, inasmuch as it provides focus and cohesion to unite against the common assault. This suggests that under conditions of decline, agreement on mission may be more important to institutions of higher education than it is under general benevolent environmental conditions.


Under conditions of decline, a strong institutional mission may also be a primary survival or recovery mechanism. Studies find that among those institutions that have experienced some form of decline, strong organizational mission is present among recovering and surviving institutions (Baker and Cullen, 1981; Chaffee, 1984; Finkelstein, Farrar, and Pfnister, 1984; Peck, 1984) but absent from those institutions that had closed (Jonsen, 1984). This set of reviews on decline and on culture suggests that institutional agreement on mission, as expressed by members of the dominant coalition, is a useful internal focus for understanding organizational responses to decline.

Internal agreement on mission is represented by four items on the IPS instrument. The items were shown to have high internal reliability (alpha = .90); a factor analysis indicates that all the items load at .69 or above on a single factor. The strongest measure of internal agreement on the construct loaded at .97 and was chosen as the indicator of internal agreement for this study. The item is "There is a general sense that this institution has a distinc- tive purpose to fulfill." Internal agreement was conceptualized as a causal variable to predict organizational responses to decline as well as a causal variable in predicting dimensions of decline attribution. If the literature on strong culture is supported, the results should indicate that there is a meaningful causal relationship between agreement on mission and perceptions of decline as well as responses to them.

Agreement on internal mission is believed to be a preexisting condition, not a result of decline. Research has shown that results of decline are that institutional members analyze and assess objective indicators of decline (in this case, severity of enrollment decline), and that those interpretations, together with the strength of the culture, are useful predictors for responses (Hermann, 1963).

Responses to Decline

The supplement to the IPS was the source of response data. The supplement asked institutional research officers to indicate which among 35 op- tions had been pursued "since the 1978-79 academic year." The events are of two types: those that are largely oriented toward efficiency (hereafter referred to as operating responses) and those that are oriented toward altering the nature of the enterprise (hereafter referred to as strategic responses). For example, the instrument listed cut "library budget" and "reduce secretarial s taff" as two operating responses. Examples of strategic responses are "merge institution with another institution" and "establish new off-campus teaching sites."

The emphasis on separate types of responses is consistent with the intent

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of the instrument, and with studies that indicate that responses are of these two general types: operating and strategic (Cyert, 1978; Hambrick and Schecter, 1983; Hofer, 1980). There are several general differences between these two types of responses. Operating responses take little time to implement or reverse, require limited group consensus for purposes of implemen- tation, are efficiency-oriented, and typically represent normal or gradual types of change. In contrast, strategic types of responses require consensus and time to pursue and to implement and, as a result, are more difficult to reverse. Moreover, the organizationwide nature of strategic change may require resource reallocation rather than cost cutting and may represent changes that are unusual or radical.

The two response indices were constructed on the basis of a factor analysis of the 35 Supplement items for the decline sample. Examples of operating responses for this sample are "restrict travel, telephone, and supply purchases" and "defer maintenance and renovation projects." Examples of strategic responses are "establish new off-campus teaching sites" and "de- velop or increase the number of adult leisure courses." As may be evident from these examples, operating responses emphasize efficiency measures, while strategic responses represent a change in product/market mix.

Attributional Dimensions

Unique organizational features may occur because of the institution's population. If this is the case, then we should see differences in response based on how individuals in the dominant coalition perceive the institution or characteristics of it. Following Ford (1985), this study used attributions of decline as the means by which to assess the effect that perceptions have on responses to decline. The specific method was to adopt Weiner's (1979) dimensions of attribution: cause, controllability, and stability. These dimensions of attribution have been used elsewhere to assess dominant coalition interpretations of external events, and they appear to be robust in explaining attributions for poor performance (Bettman and Weitz, 1983; Weiner, 1985).

Two dimensions of attribution (stability and controllability) were believed to be measured by items on the IPS. These face-valid items were subjected to a factor analysis that confirmed that they did load on separate and distin- guishable factors. Following the factor analysis, the single strongest measure of each dimension was selected as the indicator of the relevant dimension. For example, the measure of controllability is "Major factors outside our institution that affect its enrollments have become more predictable over the past few years." Ability to predict actions is believed to reflect an organization's perception of control. The indirect nature of the measure for controllability indicates a limitation of secondary research of this sort as well as a


limitation of this study. One would have greater confidence in a measure that more directly assessed the construct.

Perceived causality was a direct measure from the IPS. Respondents were asked to use their best knowledge to indicate reasons for enrollment decline. This open-ended question produced causal attributions that were coded to emphasize either perceived internal causality (for example, "deteriorating physical plant") or perceived external causality (for example, "a poor economy"). Operationalization of the causal variable thus takes the form of an aggregated perceptual score on internal/external cause of enrollment decline.

An intended indication for Figure 1 is that attributional dimensions are believed to be caused by both objective indicators of decline and internal agreement on mission, thus serving as mediators for responses.

RESULTS

LISREL V was used to examine the HEG1S and NCHEMS data sets and the causal order described above. Path coefficients were standardized to permit comparisons. The results are reported in two ways: direct relationships are represented along paths illustrated by Figure 1; these relationships, as well as indirect and total effects, are presented in tabular form in Table 1.

The results indicate that internal agreement on mission is a meaningful causal predictor of responses to decline. The direct path relationships between agreement and operating and strategic responses are - .211 and - . 157, respectively (see either Figure 1 or Table 1). An interesting finding is that these negative relationships increase as the result of the moderating effects of the dimensions of attribution to total - .321 and - .215 (see "Total Effects" of agreement on operating response and strategic response in Table 1). Interpretation of these results suggests that agreement on mission has a negative effect on number of responses taken in response to decline, and this effect increases when we include the indirect impact that agreement has on responses via its direct effect on dimensions of attribution. This suggests that internal agreement on mission puts an upward limit on the number of responses that an organization will pursue under decline conditions.

A second finding that provokes interest is the very small direct relationship shared between severity of decline and the two types of responses examined here; these results are paths of - .058 for operating responses and .046 for strategic responses. More interesting still is an examination of the indirect relationships among these variables. An examination of Table 1 indicates that attributions of decline alter the direction of the relationships between severity of decline and responses.

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TABLE 1. Direct, Indirect and Total Effects of Causal Variables

Direct Effects

Indirect Effects Perceived Perceived Perceived

Decline Agreement Decline Agreement Cause Control Stability

Operating

Response .089 - .11 - .058 - .211

Strategic

Response - .081 - .058 .046 - .157

Perceived

Cause - .372 - .029

Perceived

Control .145 .151

Perceived

Stability - .040 .260

Total Effects

- . 2 2 8 - .081 - . 4 0 4

.189 - .110 - . 138

Perceived Perceived Perceived

Decline Agreement Cause Control Stability

Perceived

Cause - .372 - .029

Perceived

Control .145 .151

Perceived

Stability - .040 .260

Operating

Response .031 - .321

Strategic

Response - .035 - .215

- . 2 2 8 - .081 - . 4 0 4

.189 - . 110 - . 1 3 8

The reversing effect of the moderating variables reduces the total shared path relationship to .031 between severity and operating responses, and to - . 035 between the same variable and strategic responses. If we accept Asher's (1983) suggestion that relationships of less than .05 are not meaningful, the conclusion is that it is not useful to limit decline response studies to an examination of severity of decline alone. In fact, these research results suggest that internal interpretations of severity are far more important for predicting responses than is the objective evidence of severity.

Overall, the causal variables explain .30 of the observed variance for dependent variables. The single largest R 2 is for operating responses; 34% of the variance for operating responses is explained by severity of decline and agreement on mission. These results can be achieved using a causal model, or using ordinary regression techniques. Both were used here, the latter in order to examine the possibility that relationships would alter on the basis of demographic characteristics.

One body of literature argues that institutions of higher education differ on a number of factors, including type of organization, for example, spe-


cialist or generalist (Zammuto, 1983; Zammuto and Cameron, 1985), availability of slack resources (Cameron and Chaffee, 1984; Chaffee, 1984; Zam- muto, 1983), the pattern of decline (Zammuto, 1983), and public and private types of control (Zammuto, 1983; Zammuto and Krakower, 1983). The size of this sample precluded subsampling with the causal model. Instead, variables believed to measure slack, control, classification, and pattern of decline were forced into a multiple regression that separately regressed operating and strategic types of responses on these control variables and on the other variables included in the causal model. Only one F-test was significant at .05; its results suggested that strategic responses may differ when program diversity (a measure of slack) is controlled. However, other measures of slack in the same analysis did not produce similar results. Overall, these regression analyses reduce the possibility that observed path weights would vary for subsamples (e.g., on the basis of type of institutional control).

Among the mediating perceptual variables (cause, controllability, and stability), perceived stability is the strongest predictor for operating responses with a path of - .404 but also shares a meaningful predictive relationship with strategic responses at -.138. This latter relationship is consistent with other works that argue that long-term adjustments follow from organizational perception that decline is long-term (Ford, 1985; Harrigan and Porter, 1983).

The observed negative relationship between perceived stability and operating responses indicates that fewer cuts of the sort described (e.g., reduce secretarial staff) follow a perception that decline is short-term. This finding is contrary to a body of work that suggests that organizations consistently respond to decline with increased efficiency (Jick and Murray, 1982; Rubin, 1979; Smart and Vertinsky, 1984). Instead, this finding indicates that when decline is seen as temporary, managers may do little or nothing.

Among the reasons this may occur is that doing nothing is a form of- organizational denial, buys time for thinking about what should be done, or may reflect the time required for interpretation and decision making in a complex organization. Similarly, if managers believe that a declining enrollment is a temporary phenomenon, they may be reluctant to engage in any more actions than are necessary to bring revenues and expenditures into line. This logic is similar to that presented by Schendel and Patton (1976) and Schendel et al. (1976) concerning the relationship between the severity of decline and the magnitude of organizational response. They suggested that it often takes a severe jolt to mobilize an organization into action. One such jolt is the realization that the institution may have to cope with declining enrollments into the foreseeable future, which then results in actions de- signed to conserve resources.

Perceived cause was also a strong predictor of operating responses, shar-

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ing a path relationship of - .228, and a predictor of strategic responses with a path of .189. Both of these relationships are observed as the literature suggests they occur: organizations will make internal adjustments to the extent that they perceive decline to be internally caused (Thompson, 1967; Weick, 1976) but will make strategic responses on the basis of perceived external cause (Ford, 1985). It was also shown that perceived control is a weak predictor of both operating and strategic responses with causal paths of - .081 and - .110, respectively. However, the indirect nature of the measure for controllability may be the source of these weak observed relationships.

DISCUSSION

Internal agreement on mission was shown to have both a direct and an indirect negative effect on responses to decline. In other words, where internal agreement is high, fewer responses of either the operating or the strategic type are pursued by the organizations represented in this sample. Existing research may shed some light on these findings. Chaffee (1984) suggests that fewer operating responses are pursued when the organization has a shared sense of mission because that shared sense of mission provides a mechanism for selectively pursuing responses of any type.

On the other hand, without shared mission, we might expect more operating types of responses. For example, in the event of decline, individual managers may act independently to halt decline, instituting a hiring freeze for arts and sciences, or cutting expenditures on supplies in engineering. The point is that these normal types of spending curbs can occur because operating responses are relatively easy to implement, lie within the control of individual managers, are possible to pursue without first obtaining internal consensus, and give the illusion of managerial control. However, to the extent that they are differentially pursued by departments or programs, they may fuel fires of varying intensity and duration for the organizational leader.

Present findings do indicate that fewer operating types of responses occur when there is high agreement on mission, and they provide support for Chaffee's argument that mission agreement leads to selective choice of operating responses to decline.

These findings also suggest that fewer strategic types of responses occur when there is a shared sense of mission. This is contrary to what we might expect. The type of change in product/market mix represented by strategic response suggests that these actions have implications for the entire structure of the organization. On that basis, one might argue that the change requires the sort of cooperation consistent with shared mission. But the


reverse is observed; fewer strategic responses were associated with a high shared sense of mission.

One explanation for this finding is that shared mission provides a very broad mechanism for selectively pursuing any sort of response under conditions of decline. Evidence for this is again found in Chaffee's (1984) study of small private colleges that had experienced severe financial difficulties in the mid-1970s. Chaffee found that among these colleges, the more resilient were "more selective in responding to opportunities and invested heavily in conceptual and communication systems that guided and interpreted any organizational change" (p. 213).

A heavy investment in a conceptual and communication system implies that organizational leaders take care to frame initiatives in the context of the organization's history, culture, and collective sense of itself, and to commu- nicate those initiatives in terms that are widely understood and shared by organizational participants. For example, if the institution is perceived as a mainstay of regional academe, then a new program might be made more acceptable to the extent that it is perceived to enhance that image. If agreement on mission is viewed as an interpretive device, then the results of this study are consistent with the results of Chaffee's study. Both find that agreement on mission is a mechanism for selective pursuit of responses to decline.

Another interpretation for the observed relationships between high mission agreement and few strategic responses is that members of an institution with a strong sense of mission usually believe that what the institution is doing is both correct and important. As a result, such institutions may loathe making the types of strategic changes that are measured by the strategic response index. As the examples of strategic responses illustrate, these mechanisms represent moves away from the traditional educational market- place. For example, a traditional liberal arts institution with a strong sense of mission is unlikely to readily change its program offerings or delivery mechanisms to attract part-time, vocationally oriented students.

A third interpretati-0n for these fifidlngs is that the crisis of decline may suspend normal decision-making processes for those organizations that have little sense of shared mission, leading to radical change without the time lags and deliberation usually associated with altering product/market mix in higher education. For those organizations without a strong shared sense of mission, the urge to "do something" may compel leaders to make more radical changes than would ordinarily be possible in a collegial governance structure, producing a no-holds-barred desperation mentality that results in a large number of responses of both types. Because this explanation is inconsistent with Whetten's (1981) argument that stress and risk aversion go hand in hand for higher education organizations, it deserves future study.

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CONCLUSIONS

Conclusions to be drawn from this study are several. It is evident that agreement on mission is a strong direct and indirect cause of both operating and strategic types of responses to decline. Agreement on mission appears to cause fewer operating and strategic responses, suggesting that organizational members who share a common sense of purpose will more selectively pursue responses to decline.

Severity of decline does not appear to be a strong force in causing either type of response, although it was shown that the indirect or mediated effect of severity of decline was stronger than the direct effect, and in the opposite direction.

Severity of decline has been examined in many studies as a post hoc explanation for types of responses pursued (Hambrick and Schecter, 1983; Hofer, 1980; Hughes, 1982). The findings for this study suggest that severity of decline is best understood in the context of how severity is interpreted by organizational members. The very weak direct relationships between decline severity and responses suggest that examining severity alone tells us little about what responses the organization is likely to pursue.

Moreover, these findings suggest that post hoc studies of responses and severity alone are limiting. The limitation associated with examining decline severity alone is overshadowed by a second limitation suggested by indirect path relationships displayed in Table 1. These paths indicate that attributions for dimensions of decline reverse the impact of decline severity on response. This suggests that an examination of decline severity alone may not only limit, but also misstate, the complex interrelationships between severity of decline, attributions, and organizational responses found in this study. Additional research that similarly examines both objective and subjective factors relevant to decline response will reveal if this finding was particular to the sample or is generalizable.

For this sample, the observed relationships relevant to decline severity and responses suggest that members' interpretations of decline are powerful mediators between severity of decline and subsequent responses. In other words, objective reality has meaning within the context of how that reality is perceived, interpreted, and acted upon by organizational members. For administrators, this may suggest that an important managerial function is to guide organizational members in interpreting the dimensions of decline.

Lack of consensus on cause, stability, and controllability may produce diverse, even conflicting, actions on the part of managers within functional areas and may produce additional confusion in an organization that is already experiencing the stress of enrollment decline. Presumably, consensus on cause-for example, a perception that the decline in enrollments will continue for some t ime-can lead to overall responses that preserve the


institution in the longer run. Additionally, this work found that important attributes of decline crisis

that shape responses are agreement on mission, perceived cause, and perceived stability. From that, one may infer that these perceptions are the ones that deserve attention from organizational leaders when they at tempt to interpret decline for other members of the organizations.

Overall, these results suggest that strategic management techniques are useful to the extent that they help administrators to identify external events. However, it was shown that for this sample, the external event of enrollment decline was important to responses not just in itself, but because members of the dominant coalition interpret that event. Those interpretations have a strong influence on responses. These results appear to lend support to the literature that emphasizes the importance of studying unique institutional characteristics, because it is largely these that shape responses to decline. Managerially, this would suggest that presidents or chancellors may make greater progress toward shaping responses to decline when they begin with a firm understanding of external events in the context of the particular institution's history, culture, and mission.

Acknowledgments. The author gratefully acknowledges the help of Ray Zam- muto, Michael Lawless, Ellen Earle Chaffee, Len Chusmir, and Christine Koberg for their critical assessments of an early version of this work, and wishes to thank an anonymous reviewer.

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Received March 25, 1986

Documents

Agreement on mission and institutional responses to decline