This study examined the attitudes of students, faculty, administrators, and policymakers in regard to higher education policy, in light of the challenges facing higher education institutions and specifically as they relate to the mission of the university as a research institution. In-depth ethnographic interviews were conducted with students, faculty, administrators, state officials, lobbyists, professional association leaders, and state legislators. Overall, the interviews demonstrated that because corporate America is putting more and more pressure on institutions to focus on applied research and to produce a workforce that will manage its firms, operate its factories, and design its plants, universities are perceived to have lost, or are in danger of losing, their connections to the kind of research that benefits society. The report concluded that universities must change the ways they communicate their mission and must accept the moral and ethical dimensions of leadership, and must also increase their competitiveness with other forms of education and training. (Contains 12 references.) (MDM)