There remains uncertainty in scientific discussions regarding the governance of universities in new public management regimes in terms of who actually "rules" in the university. Apparently, a strengthened management leadership is confronted with continuing elements of academic self-regulation and professional autonomy in knowledge production and diffusion. Organisational and academic rationales coexist in today's management of universities. This article endeavours to clarify some of the ambiguities pertaining to the coexistence of two authorities by demonstrating the working of "interdependency management" that is taking place within universities. For this purpose, the authors have scrutinised research, teaching and recruitment policies in one Swiss university that is subject to such ambiguities. The study confirms existing research in that a command-and-control system is not applied. Policymaking in universities is instead based on a mix of negotiations in faculties that are taking place in the "shadow of hierarchy", negotiated bargaining between faculties and leaders and occasional unilateral decisions of leaders. This mitigates latent conflicts between management and the academic community: strategic orientations of the university are generally accepted by the academic community while the academic community has influence on policy formulation and maintains defining powers over policy substance.