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Organizations distribute incentives to individuals in order to induce them to contribute activity. Aspects of organizational behavior and change are explained by exploring the differing consequences of different incentive systems. Three types of organizations are distinguished on the basis of three kinds of incentives: material, solidary, and purposive. Hypotheses are presented about the characteristic behavior of these types, and the correspondence between the types and certain actual organizations is shown. Changes in organizational activities and purposes are predicted by assuming that the executive's function is to perpetuate his group, and by assuming that he alters incentives to adapt to changes in the supplies of incentive-yielding resources. Co-operation, conflict, and other relationships among organizations are explained in terms of competition for autonomy and resources. It is suggested that gradual …