Management and leadership as a consequence of organizational tasks and structure are discussed in this paper, with a focus on the application of leadership theories from market-oriented organizations to more regulated organizations such as the Swedish school system. The Swedish educational system, according to Berg's (1988) "cross model," is characterized by a nonmarket orientation and decentralization. The Lots leadership development strategy of a market-oriented organization is then applied to the public school, or nonmarket, organization. Characteristics of a market- versus public-oriented organization include: supply and demand versus tasks set by a governing body; explicit versus unclear, complex goals; customer's free choice versus students' free choice; and civil versus public law. The Lots plan is pupil- but not curriculum-centered; offers strategies for change but not development; and improves leadership but not the management function. A conclusion is that the Lots method is useful in situations that are not tightly controlled by a governing body. A recommendation is that principals must understand the governing body's goals and their consequences for school management. Leader competence is based on school orientation and structure. Five specific recommendations for improving principal effectiveness are offered. Two figures and one table are included. (12 references) (LMI)