This chapter analyzes North Atlantic Treaty Organization (NATO) from the perspective of the two major families of theories that have been applied to explaining the post-Cold War persistence and development of the Western alliance: rational institutionalism and sociological or constructivist institutionalism. Rational institutionalism conceptualises the international environment as an anarchical and material one characterised by an absence of hierarchical authority and the predominance of material structures such as the distribution of power and wealth. Sociological institutionalism regards the environment of actors not as material in character, but rather cultural or social. In line with sociological institutionalism, international organisations are seen as 'community representatives' as well as community-building agencies. Both rational and sociological institutionalism can plausibly explain NATO's move towards flexibility in the post-Cold War period, but flexibilisation creates a theoretical problem for an institutional account of NATO. Institutional design, therefore, is functional, and flexibilisation is a functional response to the altered security environment of post-Cold War Europe and the security interests of NATO's members.