This chapter describes the common challenges to health and mental health organizations that require these agencies to become more "reflective" in their culture and structures. This necessitates integrating practice and research at all organizational levels. A turbulent environment of fiscal constraint, managed care, shrinking resources and political ill will toward social work programs is shaping direct service and management practice. While managing with reduced resources, being accountable, and justifying services, social work programs must simultaneously build capacity in the face of increased interorganizational competition for dollars and, for social workers in host settings, intra-organizational competition. A reflective practice approach to inquiry can be said to seek to make explicit and evident both theories in use and espoused theories and examine the interaction between them and their impact on practitioner's approaches to problem solving in everyday practice situations. Although traditional rational-bureaucratic theories of organizational problem solving have been replaced with paradigms in which non-logical processes balance competing values and constraints.