Higher education institutions are now operating in a rapidly-changing environment, as economic, societal and technological developments such as cost containment and lifelong learning force them to adopt flexible structures that can adapt quickly to market demands. This text examines the level of adaptability in universities in Europe and the USA, drawing out the lessons learnt for policy makers and managers to develop such structures and help their institutions survive and embrace change. Barbara Sporn draws on three studies of universities which are identified as comparatively adaptive and innovative - New York University, University of Michigan, and the University of California at Berkley - and in contrast, three European institutions which are trying to improve their adaptive capacity - Universita Bocconi, Universitat St Gallen, and Wirtschaftsuniversitat Wien. The text provides an overview of different disciplines within the universities and their views on adaptation. It examines the importance of an institution's environment and its dynamics for adaptive capacity, and concludes that an ideal academic organization is open to change, with collegial governance structures that provide faculty support for adaptation.