Society has changed sustainably and universities have thus faced new requirements. As a result of competition and globalization, education and knowledge management had to be adapted. Universities were forced to establish a modern management system primarily known from the private sector and governments had to reconsider their legal and economic relationship to universities. In recent years, many countries have implemented new rules for their universities. Two of these countries were Austria and Switzerland. But even when they pursued the same goals, they have chosen quite different approaches and as a matter of fact achieved very differing results. The objective of this study was twofold. Firstly, we analyzed the challenges and contradictions when implementing a modern university model. Secondly, we investigated specific characteristics of the university systems of Austria and Switzerland to identify factors that may have impacted the performance and success of the universities. Referring to our first objective, a literature review has revealed severe contradictions between modern university management and the traditional understanding of it. While the traditional scheme has focused mainly on research, teaching is becoming more relevant in the new demand orientated university. Also, the freedom of science and teaching is limited by the strong orientation on goals that have been agreed upon with the government. Further contradictions can be identified in autonomy, budgeting, leadership, hierarchy, and employee participation. To examine the second research aim, we reviewed national and international databases and reports. Our results emphasize the importance of monetary aspects, the student-teacher-ratio, autonomy, and the relevance of the universities' reputation and acceptance within society and politics. Our findings can help to understand the different approaches which have been chosen to cope with global changes in higher education. They might serve as basis for decision-making in higher education policy.
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