The purpose of this paper is to consider the possibilities of integration of the research and teaching function in higher education. The two functions among German, American and Japanese higher education system are considered. The American system is characterized by functionaly differentiated sectors and multi-tier structure. The American system "bundles" many functions and thus, it can integrate teaching and research functions successfully.
Integration of teaching and research is necessary for the development of higher education systems, but the balance of the teaching and research function is internally and externally disturbed. Internal conflicts are rooted in the reward system of the academic profession and in the resource allocation system of higher education. In this sense, the higher education system is essentially a conflict-burden organization.
The stability of higher education system depends on financing patterns. Current Japanese system is buffered by bureaucratic financing mechanism, so external changes may not affect the current balance of teaching and research.