Functions of educational institutions are often discussed in relation to institutional autonomy; performance; order and discipline; learning environment; rewards for achievement; parental support; and clarity or dilution of objectives. A significant observation indicates: declining learning environment, growing distracting influence, declining discipline in academic setting, lack of counselling and individual attention to students, non-operating student-teacher relationship, falling standards, failure because of structures, organisation, content, instructional process and evaluation, lacking spirit of competition and failure of the system in its efforts regarding discovering and developing potential. Research on mass failure of students at matriculation and higher level examinations in Pakistan do indicate a relationship with some of the stated factors. All these factors provide a frame of reference for further in-depth analysis of the internal and external environment of education in Pakistan so as to arrive at some specific conclusions and recommendations. Evaluation would be useful if it reflects on policy objectives, the role of educational leadership, organisation and management, motivational environment and enabling culture, and other major problems and issues confronting the system of education and its management. Education is a function of the total society. Educational reform agenda will be workable only if an integrated and comprehensive approach to societal issues is made part of the educational programmes as an instrument of change. The evaluation of education is biased by one's social class, values and aspirations. Quality of education is, therefore, a relative rather than an absolute standard. However, the quality of education is determined by a complex of factors or forces in the internal and external environment of educational institutions. No doubt, leadership has the responsibility to ensure quality in its totality. An agenda for reform and efficacy of society requires a critical analysis to develop an understanding of the linkage between culture of the society, the system of education and the role of educational leadership. An objective assessment of educational sector reform must identify problem areas at different levels of education and give suggestions for improvement in terms of structure, organisation, functions and personal. We are not paying attention to complex issues. What we say is that it is only a small percentage of the GNP which goes into education. We forget all other important in-puts, investments and the environment of education. Infrastructure should contribute to broad social goals, yet it may be effective only when efforts are narrowly focused. The choice of instruments and approaches must reflect sectoral needs and the capacity of implementing agencies. The writer is former director, National Institute of Public Administration (NIPA) E-mail: