Higher education is "under fire" from policymakers, business leaders, and the public who are demanding accountability, improvement, and change. The academy's response has evoked charges of arrogance, insularity, and an unwillingness to be accountable or to change. The result has been frustration, resentment, and animosity for both policymakers and educators. In addition, this divide has inhibited productive dialogue and change. This study draws on the organizational effectiveness and neo-institutional theory literature to examine a set of policy-related documents produced by higher education stakeholders. Their goals and expectations for higher education and the cultural-cognitive characteristics of stakeholder groups that underlie their concept of effectiveness are explicated and compared in order to help resolve this dilemma. Results show that the conflict rests in fundamental differences in values, assumptions and beliefs between stakeholders. Higher education's external stakeholders are judging its effectiveness and setting expectations based on values and metrics that are largely incompatible with the nature of the academy but that are in line with contemporary U.S. sociocultural and economic ideology. Stakeholders within higher education see these effectiveness issues as best resolved internally in accordance with academic traditions, standards, and expertise. Demands originating externally are seen as potential threats to academic views and culture. Understanding the differing perspectives offers grounds for negotiation and illuminates implications for change in higher education. Recommendations for change are offered. These are general recommendations that focus on identifying and reconciling areas of disagreement and inclusion of all stakeholder voices. Specific methods of implementation are left to the professional judgment of practitioners who must apply them to particular settings and circumstances.