Decentralized school systems make the principal's role more complex in the U.S. than in Australia's highly centralized system. Principals are pivotal to school success in both countries. A principal sets a school's climate, affecting decision-making, communications, educational innovations, and teacher morale, while performing formal tasks regarding curriculum, pupil and staff performance, physical facilities, school-community relations, and administration. However, comparison of the two countries reveals five differences that strongly influence the principal's role. First, U.S. preservice preparation demands more formal professional requirements from principals. Second, the principal selection process in Australia emphasizes seniority and service longevity, while the U.S. process is more competitive. Third, school funding is local in the U.S. but national in Australia, making U.S. principals more vulnerable to "environmental" influences. Fourth, U.S. schools have more programs and activities for which the principal is responsible. Fifth, principals' jobs are more secure in Australia, where principals have tenure, guaranteed salaries, and seniority and transfer rights, and are not subject to local funding changes. Thus the decentralized school system's stronger, more diverse organizational and environmental inputs make the principal's role in the U.S. more complex and dynamic than in Australia. Interview notes give additional information on U.S. principals. (RW)