This is the report of a study that examined the relationship between the New York City school system and the external (social and political) environment of which the school system is a part. The study had two purposes: first, to determine the impact that external constituents of the school system have on internal policymaking and implementation; and second, to determine the extent to which these external constituents represent the wants and needs of the clientele which the school system is supposed to serve. It was hypothesized (1) that constituents to which the central administration must respond are so diverse that they function as an obstacle to internal governance and control, (2) that conflicting demands imposed by these constituents inhibit the establishment of unified policy, and (3) that the external constituents are neither representative of nor responsive to the clientele served by the central administration. In order to test the hypotheses, five case studies (presented in this report) concerning major policy issues were conducted. Issues explored in these studies were (respectively) (1) budget development during three fiscal years (FY80, FY81, FY82); (2) the upgrading of minimum competency standards for elementary and secondary grades; (3) implementation of measures to comply with a Federal Court mandate enforcing the Education for All Handicapped Children Act; (4) enforcement of a Federal order by the U.S. Office for Civil Rights to desegregate an intermediate school (I.S. 241) in Queens; and (5) an attempt by central school officials to amend state law establishing formal procedures for disciplining and removing unsatisfactory teaching personnel. The report concludes with discussions of the politics of education in New York City, and dilemmas faced by the central administration in responding to diverse groups. Recommendations are also presented for reducing conflicts between governing boards, decision makers, and interest groups. (GC)