Abstract
The purpose of this study is to explore the way higher education institutions adapt to environmental pressures. These pressures can be represented either by various demands or by specific policies. Dropout policy is examined on a Czech case study in order to demonstrate that at the end of the day, higher education institutions respond mainly to the most pressing challenges of an economic nature in the most rational way. As a result, their traditional mission (teaching, research, the third mission), and mainly the social function of the higher education system, may be at stake. At the same time, this study illustrates how difficult it is to introduce any higher education policy without thorough evaluation of other policies in place and of various factors affecting institutional behaviour.