The study focused on two medium security prisons, one using unit management in all housing units and another with unit management in only one section. Study participants included 442 inmates and 149 staff. In general, it was hypothesized that unit management would positively affect staff and inmate safety and security, quality of life, staff work environment, and inmate services and programs. Several indexes of the prison climate were created by factor analysis of staff and inmate questionnaire responses. The results suggest that flattening an organizational structure without decentralizing authority seems to have negative effects on staff supervisory relations and job satisfaction. The findings support theories that predict a higher level of job satisfaction when authority is delegated. Inmates, on the other hand, generally reported a better quality of life (personal well-being and living conditions) and a more effective staff (responsive and accurately informed) under the flatter unit management structure, with or without staff perceiving adequate delegation of authority. Policy issues associated with prison unit management are discussed. 15 references and 4 tables