Rational action involves setting a goal to be achieved, identifying means for reaching the goal, and using the means to achieve the goal. The problem prison administrators face is the existence of a variety of legitimate and necessary goals that cannot be achieved simultaneously. The organizational responses in such a situation are either to isolate the organization from unpredictable environments or to attempt to anticipate and adapt to environmental changes. The latter strategy, which is pursued by most modern prison administrators, requires access to the information necessary for controlling contingencies. This paper examines the impact of the environment on the organizational structure of prisons and the information-gathering response of administrators and describes innovations in rational planning and budgeting systems. The impact of the application of the principles of administrative law to decisionmaking is then discussed. The chapter concludes that the interaction between the prison and its environment will compel prison officials to so influence environments that only achievable demands will be imposed. 18 references.