This paper explores the role of missions and motivated agents in organizational efficiency, particularly in the context of public bureaucracies and private non-profits. The authors argue that organizations with missions, such as schools and hospitals, can achieve higher productivity by matching the missions of principals and agents, which reduces the need for high-powered incentives. However, this matching can also lead to bureaucratic conservatism and resistance to innovation. The paper applies its framework to school competition, incentives in the public sector, and the interdependence of incentives and productivity between the private for-profit sector and the mission-oriented sector through occupational choice. Key findings include the importance of mission diversity in improving productivity, the negative correlation between bonus payments and effort, and the potential for competition to enhance organizational efficiency. The paper also discusses the implications for public and private sector organizations, including the role of competition in improving school performance and the challenges of mission-driven organizations in the public sector.This paper explores the role of missions and motivated agents in organizational efficiency, particularly in the context of public bureaucracies and private non-profits. The authors argue that organizations with missions, such as schools and hospitals, can achieve higher productivity by matching the missions of principals and agents, which reduces the need for high-powered incentives. However, this matching can also lead to bureaucratic conservatism and resistance to innovation. The paper applies its framework to school competition, incentives in the public sector, and the interdependence of incentives and productivity between the private for-profit sector and the mission-oriented sector through occupational choice. Key findings include the importance of mission diversity in improving productivity, the negative correlation between bonus payments and effort, and the potential for competition to enhance organizational efficiency. The paper also discusses the implications for public and private sector organizations, including the role of competition in improving school performance and the challenges of mission-driven organizations in the public sector.