PurposeThe purpose of this paper is to examine how transfer students interact with a higher education setting that is reacting to new state‐mandated accountability goals, and to understand higher education institutions and their environments when faced with new accountability measures. The larger purpose of the study is to develop a grounded theory that helps all players understand the tensions that exist between the state, the universities, and transfer students.Design/methodology/approachThe paper presents a qualitative study using Bronfenbrenner's ecological theory.FindingsThe paper finds that interactions between the systems played a large role in the transfer students' perceptions of their experiences at a four‐year institution. The universities in this study, and their transfer student policies, reflect an environment that was influenced by and influenced transfer students' perceptions.Research limitations/implicationsTo date no research has been found that incorporates the ecological model and higher education institutions. Because of this, it is difficult to determine how effective this model may be for institutions that are wrestling with dilemmas.Originality/valueThe ecological theory used in this qualitative study is a useful tool in understanding the contexts and systems in which transfer students, administrators and state‐mandated accountability goals co‐exist.

Executive Summary There is a belief in the academy that colleges are not businesses and academic deans are not corporate CEO's. This may be true, but when we take a close look at deans and CEO's, their work environments and their profiles, we see distinct similarities. In this article, we address the question: Is there an opportunity for them to learn from each other?

Accountability is an important focus for nearly all-public higher education institutions. In 1997 the Washington State Legislature mandated an accountability measure designed to encourage public universities to increase student efficiency toward graduation. This accountability measure is assessed by a formula called the Graduation Efficiency Index. This qualitative study details the Graduation Efficiency Index's conception and ramifications for public higher education institutions. It further examines university administrators' perceptions of the Graduation Efficiency Index and transfer students' impact on the ability of three public institutions to meet mandated accountability goals. We include implications for practice.