Research of 25 Michigan elementary and secondary public schools is used to test a model relating organizations' problem-solving adequacy to their available inputs or resources and to the appropriateness of their structures. Problems that all organizations must solve, to avoid disorganization or entropy, include (1) getting inputs and producing outputs, (2) controlling inputs and outputs, (3) coordinating subsystems and allocating resources, (4) adapting to the environment, and (5) preserving the organization. The 25 schools' ability to solve these five problems was correlated with their inputs (expenditures per pupil), outputs (teacher job satisfaction and student scores on standardized tests), and structural characteristics (participative decision-making, vertical communication, and high performance norms). Data was provided by the schools and, through interviews and questionnaires, by a sample of 200 of the schools' teachers. Results indicate positive relationships among the schools' expenditures, their problem-solving adequacy, and those structural variables involving communication and performance norms. Problem-solving ability was in turn positively related to student achievement and teacher job satisfaction. (RW)