A functional society is a society that has found its balance between the extremes of 100% Individualism (Chaos) and 100% Collectivism (Stagnation). Thorough exploration of the influences that the institutions of Society, Family, Education, Work Environment and Religion have on the members of a particular society allows for an understanding of the mechanics which work to shape and influence societies from generation to generation. Following a review of multiple pieces of literature and personal interactions and observations in select societies (China, Czech Republic, Greece and Sweden) the extrapolation can be made that there are two distinct societal types, collectivist and individualist. Although it is often speculated that a society must utilize one extreme or the other, in reality societies try to balance between the extremes of stagnation and chaos as a means of self preservation. The institutions used by societies to enforce compliance among its membership are essentially universal; however, the methods by which societies choose to maintain cohesiveness differ from society to society and are influenced by changes in technology and information sharing on a global scale. These factors serve to explain why degrees of both individualism and collectivism can be found in each functional society currently in existence. The balance of these two societal extremes allows a society to optimally function and maintain harmony. This balance is by no means stagnant. Societies constantly struggle toward one extreme or the other. Functional societies find themselves being drawn back toward the middle over time, with no society every truly obtaining a perfect equilibrium. An understanding of the dynamics at work in this cycle enhances our ability to function in our own society and interact with other societies on an international scale.