Responses of college administrators in schools facing conditions of fiscal stress, and alternative strategies found to be effective in private sector firms are examined. It is suggested that many college administrators are responding to conditions of decline by being conservative and efficiency oriented. A number of factors within and outside the institution that create pressure to respond in this way are identified. Research on colleges and universities and on private sector firms are reported which suggest that these responses are detrimental to long-term organizational viability. A study of 40 colleges in the northeast United States (Cameron, 1981) provided responses from 600 faculty members and 694 administrators from public, private, and church-related institutions. Results suggest that administrators in declining institutions focus on internal resource allocation problems (budgeting and finance), rely on past policies and practices (standardization), and do not value organizational goals in the critical academic domain that lies at the center of college and university output. Administrator behavior in these declining organizations may actually perpetuate the decline by eliminating the possibility of expanding resource bases through proactive environmental contacting (e.g., public relations work), by relying on standardized procedures that were successful in past circumstances, and by driving out self-designing characteristics. A study by Miles and Cameron (1982) is described that illustrates how a private sector organization managed decline differently (the U.S. tobacco industry from 1950 to 1979). Suggested solutions to decline are outlined that involve domain defense, offense, and creation strategies and that focus on effectiveness, innovation, and the external environment. (SW)