To continue to remain effective mental hospital administration personnel may require a reevaluation of the organizations in which they are working members. This paper has discussed some aspects of an alternative approach to management, in contrast to the traditional military model, which has been the rule in many organizazations. While the manifest goals of organizations will vary widely, their internal social structure, and their patterns of human relations, have many things in common. In this paper research findings from business and industry have been discussed in terms of hospital administration. This form of social psychological research on organizations suggests that many facets of hospital management can be improved, thus leading to increased on-the-job effectiveness, such as less error, less absenteeism and lateness, less turnover, improved communication, and better morale among the members. The job of achieving these things is not easy, but the return of investments in these newer approaches in other organizations suggests that mental hospital personnel may benefit from them also.