We present a conceptual framework derived from organizational theory for understanding the evaluation of the effectiveness of mental health services. We postulate that organizations are deemed "successful" by their constituents when they conform to institutional demands and expectations that are both internally and externally generated. We empirically assess institutional conformity by examining evaluations of effectiveness by 269 mental health providers in 29 different mental health programs. Specialist programs responded to institutional demands by targeting services to those considered most in need: clients with severe mental illnesses. The formal structure and program philosophy of these programs clearly reflected this emphasis; consequently, levels of goal incongruence were low and evaluations of effectiveness were high. Generalist programs continued to provide care to diverse client groups, had more professionals, offered traditional services (such as psychotherapy), and exhibited higher levels of goal incongruence; these factors resulted in lower evaluations of effectiveness. This research is important because it demonstrates that organizational processes of institutional conformity (program objectives meet the demands of external constituents) and goal congruence (program objectives meet with expectations of internal constituents) are critical to positive evaluations of effectiveness. With the current institutional demand for effective, efficient services, it is critical that researchers have a conceptual framework for analyzing those factors which influence evaluations of effectiveness.