To determine the effect of variations in institutional dimensions on administrative behavior, this study identifies the differences between problem situations confronting elementary principals of schools located in lower socioeconomic communities and those confronting principals of schools in higher socioeconomic communities. The institutional variable is the socioeconomic composition of the communities in which the schools are located. Ten schools in a Midwestern urban school system were divided into five high socioeconomic and five low socioeconomic schools and the 10 principals were used as subjects for the study. Problems confronting the principals were identified by direct observation and categorized by means of the Darling taxonomy of administrative problems. Each subject was observed for 2 full days with 995 problem situations recorded for the "high" group and 1,051 recorded for the "low" group. Analysis using Chi square tests shows that there are significant differences between the distribution of principals' problems in the "low" and "high" schools with respect to (1) their functions, (2) types of problems they encounter, and (3) origin of their decisions. Different skills are required of principals in the two settings, with principals in the "low" setting encountering more human relations problems and having less time for creative thinking. (TT)