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Amid shrinking public investment in higher education, Taiwan has increasingly relied on competitive funding to steer university reform. Yet policy goals often diverge from local interests. Drawing on bureaucratic politics and sensemaking theory, this multiple-case study examines how six types of institutions implemented the “Teaching Excellence Project.” Findings show that the program’s goal-driven design shaped institutional strategies in distinct ways. Private universities demonstrated greater adaptability, faster structural adjustments, and stronger internal coordination. Public universities, in contrast, were more constrained by bureaucratic rules. While private institutions exhibited integration, public institutions faced sharper internal conflict. These dynamics highlight how organizational context mediates the translation of policy into practice in competitive policy environments.