Institutional effectiveness can be defined as the extent to which internal priorities coincide with the priorities of the external groups that provide funding and support for the institution. If a lack of congruence exists between these priorities, a college administrator has the options of attempting to change the values of the external groups or of supporting those values and changing institutional activities. In Arizona, a study was undertaken to assess the priorities of administrators and external groups for a rural and an urban community college district. Legislators, state board members, and registered voters were defined as the significant external groups, and college administrators were asked to supply potency weights for each of these groups. College administrators and external groups were asked to assign priorities to 60 college activities, and their levels of agreement were correlated. The study revealed that the level of agreement between external groups and administrators in the rural district was 0.54 (where 1.0 would indicate complete agreement); while the external groups and administrators in the urban district achieved a 0.59 level of agreement. Significant differences in priorities existed between the groups in the areas of services to non-high school graduates and minority groups and the provision of off-campus services (which administrators ranked more highly) and services for the handicapped and community (which the external groups considered more important). (HB)