An overview is provided of the issues involved in the development of programs to assess institutional effectiveness, particularly as they relate to California community colleges. After part I reviews the trends that have made institutional accountability a legislative concern nationwide, parts II and III consider various definitions of institutional effectiveness and ways of measuring it. Current practices and problems related to outcomes assessment, "value-added" measurement instruments, and exit testing are explored, the use of multiple measures and classroom-based research is suggested as a means of resolving some of the shortcomings identified with other techniques. Part IV discusses the experiences of states that have implemented statewide assessment initiatives and offers case studies of Missouri's and Tennessee's approaches. Part V addresses faculty concerns about the effects of these programs on students, classroom methods, expectations, and their own role as faculty members. It also underscores the need for teacher involvement in the institutional effectiveness movement. Part VI examines California's position in relation to the movement, focusing on: (1) the provisions of Assembly Bill 1725 that require all community colleges to "phase in" assessment programs; (2) the role of accreditation in implementing the new programs; (3) the unique characteristics of California's community colleges and their students that make the models used in other states inappropriate; and (4) ways of identifying and developing criteria to measure the attainment of each institution's individual goals. (ALB)