This paper discusses how the internal decision-making structure of the university has been changed by increased competition among universities due to the decline of the 18 year-old population and how parents, who have long supported university education by paying expensive tuition fees for their children, have changed their attitudes toward university education. For them, children are no longer “treasures of the family,” but “burdens of the family.” Parents are not willing to sacrifice their own quality of life to pay for “useless” education. Consequently, Japanese higher education is now losing its financial basis for existence and survival.

　 Increased competition among universities has changed the relationship between faculty members and university managers. At many universities, a topdown administrative style has been introduced instead of a decision-making style through the faculty meeting. The faculty has lost its power to university managers in the decision-making process. This change has been introduced for effective and quick decision-making by university administration to respond to the changeable environment faced by universities. Before this kind of reform, the faculty, good or bad, has checked the university administration, while the new centralized topdown system has decreased risk management levels, which is now becoming the more crucial issue for university management.

　 For Japanese private higher education, which has depended heavily on tuition income, the existence of parents who believe in the significance of higher education and expect their children to secure a good career through university education has been indispensable. But recently parents who have willingly paid high tuition have become more cost-sensitive, and are no longer willing to pay for “useless education.” This change can be found in the many cases of student attrition due to the family’s income reduction. Recent opinion polls indicate that parents are no longer saving money for their children’s education, but for their life after retirement. Now, Japanese universities have to compete not only against each other, but also against this new type of parent.

　 Academic freedom in the university is protected and guaranteed through faculty self-governance. The Faculty Meeting retains decision-making power on all major issues that pertain to university affairs. This arrangement, thus far, has been socially acceptable. However, the appropriateness of this type of governance creates tensions in private university management. Administrators argue that it is not possible to manage a private university based on the Faculty Meeting as it does not take fiscal responsibility yet has decision-making authority. If experts do not manage finances, the university will cease to exist. Therefore, Boards of Trustees, which hold managerial authority, are limiting the self-governance of Faculty Meetings. Faculty Meetings should exercise the right to self-governance only when actions of the Board of Trustees threaten academic freedom.

　 The tension between the Faculty Meeting and the Board of Trustees is exemplified in the presidential selection process. Based on the right to selfgovernance, the Faculty Meeting selects the president through a democratic process. However, the most important characteristic of what is needed in a private university president today is management ability and the democratic process does not guarantee the selection of such a president. Thus, the leadership of the president is based on the structural situation. Here we might learn something from the American university presidential selection process.

　 The continuation of the ideals of the university is of central importance to the management of a private university. It is hoped that faculty members are supportive of those ideals. Furthermore, in private universities, educational activities are the basis for the existence of the university. The appointment of faculty who place educational activities ahead of all others is what permits the continued existence of private universities.

　 There are 101 national universities and colleges, including 4-and 2-year institutions, in Japan. All of them are facing significant organizational challenges as they transform from a tightly controlled system of national higher education to a group of more autonomous-corporations. This article discusses several of the processes Nagoya University has implemented in light of these changes and suggests how national universities and colleges can succeed in the present complicated situation.

　 First, it is imperative to engage teachers in faculty development programs to improve their teaching and to adopt quality control procedures for teaching. However, there is still an academic culture of resistance toward these initiatives among university teachers that must be overcome. Second, the effective design and evaluation of the curriculum are of utmost importance to ensure educational quality assurance. Third, the reluctance of university personnel to accept the new restructuring guidelines declared by the Ministry of Education, Culture, Sports, Science and Technology must be addressed. Finally, through organizing a new office of evaluation and data analysis, national universities and colleges can develop a shared framework of strategic planning to communicate with the Ministry of Education and to learn how to step into the next stage of university reform.

　 National universities are to undergo fundamental changes in the next two years including quasi-privatization. By conferring upon universities an independent status freed from government control, the government will transfer the powers and responsibilities to manage and finance educational and research activities to the universities. Thus far, national universities are generally failing to respond to rapidly changing social and economic needs as well as to students’ educational needs mostly because of the lack of competition resulting from their historical civil servant status and protection, financial or otherwise, by the government. Planned semi-privatization will change this drastically by making national universities more competitive, more responsive to social and economic needs, more cost-effective, and eventually more accountable for tax-payers’ money invested in national universities. However, there is always a danger that these changes, introduced hastily and for which national universities are mostly unprepared, might result only in confusion and sabotage. There are many matters where careful and serious considerations must be given such as designing a suitable decision-making structure and devising an appropriate personnel recruitment and career development scheme.

　 Japan’s higher education system is facing many serious external demands. The Independent Administrative Institution, for example, is a structure that the government is implementing to induce national university reform. Resource allocations based upon external evaluation have been introduced. These measures impact university management and faculty that have been accustomed to a noncompetitive funding system. These changes reflect shifts in the power balance between universities and the government. Based upon this current situation. it is an opportune time to present several articles on the new managerial challenges confronting universities.

　 Strong leadership by presidents and deans is encouraged by several reports issued by the University Council which is the advisory council to the Education Minister. Universities in Japan, however, do not have enough staff that can support presidential leadership effectively. Further, non-academic staff as well as faculty members often lack managerial knowledge and ability. Therefore, universities have to improve the managerial skills of their staff and faculty. To complicate matters more, faculty members and administrators are sometimes in opposition.

　 According to the author’s recent survey of university staff, most administrators feel strongly that they should train their administrative and support staff to work positively in the new competitive environment of higher education system. The survey also finds that in private universities, administrative non-academic staff keep working for the same institution far longer than those who work for national and local public institutions.

　 This paper examines the policy-making process which was undertaken to expand the supply of medical doctors in the 1970s. Post-war higher education policies are discussed in relation to the formation of the welfare state. In this groundbreaking case study, the entire policy process is segmented into the following issues : agenda setting, formation, and decision-making. Each issue is further analyzed by discussing the actors who created and implemented it, where the issue was created and implemented, and how the issues have been formulated at every step. The political internal functions or “plan feasibility” and the political structures are also analyzed.

　 Utilizing Dr. Pempel’s process model of higher educational policy in the 1960s, I reanalyze and modify it in the context of the 1970s when the welfare state was being formed. Finally, I make recommendations for higher education policy under the welfare state and also describe the challenges and possibilities of the policy-making process.

　 University evaluation has been an important policy issue since the 1990s in Japan and many institutional self-evaluations have been conducted. Additionally, there has been the emergence of “commercial university evaluations” or university rankings presented by publications such as U S News and World Report, The Financial Times, Asiaweek, and Business Week. Such rankings take place not only in Japan but also in many other countries.

　 This paper provides an overview of the scope and depth of commercial university rankings in Japan. The methodological strategies employed by these publications are critiqued and problematized. A simulation of the ranking is performed to investigate the effects of a highly subjective variable, institution reputation. If institutional reputation is isolated, the rankings change drastically between years. However, if reputation is included, the rankings of top universities are not changed significantly. This means that institutional reputation is a very important determinant in commercial rankings and acts as a self-perpetuating mechanism by ensuring that institutions with strong reputations remain at the top of the list. We investigate additional factors that contribute to this selfperpetuating mechanism including parent and student demand, higher education demand, and the interests of the government and other stakeholders.

　 Declining rates of high school graduates since 1992 in Japan are beginning to seriously challenge the financial resources of private universities which rely heavily on student tuition. The purpose of this paper is to cast light on the management of private universities in Japan by clarifying their financial structures.

　 Using data from the Survey of Financial Conditions of Private Schools for fiscal year 1996, we investigate the financial affairs of private universities and 2-year colleges in Japan. The main findings of this paper are that revenue income (which includes tuition fees, gifts, and endowment) is influenced by market conditions such as prestige, tradition, and location and second, though the balance between revenue and expenditures is partly affected by market conditions, it is determined much more by institutional factors such as faculty salaries and studentteacher ratios.

　 Based on this empirical analysis, we suggest four options to maintain equilibrium between revenue and expenditures that individual institutions can take into account with their market conditions.