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AS THE PSYCHOANALYTIC THEORY of individual personality functioning has evolved and become more complex, it seems a good time to review some related developments in the application of psychoanalytic thinking to theories of groups and organizations. New developments in conceptualizations of individual psychology lead to new possibilities for understanding the group. Correspondingly, analytic studies of families and groups are important for the clarification they bring to the analytic understanding of the individual. This was true when Freud, increasingly impressed by the role of identification in personality formation, made an important contribution to the theory of groups in Group Psychology and the Analysis of the Ego(1921). Written as he was articulating his concepts of the ego ideal or superego, and of the relation of object loss to ego identification, he utilized his new structural theory to understand group formation. He arrived at the conceptualization that group formation depended on incorporation of the leader into the ego ideal, as well as ego identification between group members. Freud's group psychology was a demonstration of the power of his new structural concepts to bridge intrapsychic and interpersonal aspects of personality functioning. In addition to being a useful application of his structural theory to the understanding of groups, Freud's group psychology was also a source of evidence that gave weight to his new structural theory of the mind. In fact, Kris (1943) thought that the latter purpose was the most important to Freud in writing Group Psychology. He believed Freud's main objective in writing the monograph was to clarify further the structural