Malinowski considered institutions to be examples of isolated organized behaviors. Since such behavior always involves a plurality of persons, an institution in this sense is therefore a social system, which is a subsystem of society. Though functionally differentiated from other institutions, an institution is a segmentary cross-section of culture that involves all the components included in Malinowski's definition of culture (Firth 1957:59). Malinowski believed that the central feature of the charter of an institution is “the system of values for the pursuit of which human beings organize, or enter organizations already existing” (Malinowski 1944:52). As for the concept of function, Malinowski believed it is the primary basis of differentiation of institutions within the same culture. In other words, institutions differ because they are organized to serve different functions. He argued that institutions function for continuing life and "normality" of an organism, or an aggregate of organisms as a species (Firth 1957:60). Indeed, for Malinowski, the primary reference of the concept of function was to a theory of the biological needs of the individual organism:
Looking back through the last page or two, I see that I have made it appear as though my motives in writing were wholly public-spirited. I don't want to leave that as the final impression. All writers are vain, selfish, and lazy, and at the very bottom of their motives there lies a mystery. Writing a book is a horrible, exhausting struggle, like a long bout of some painful illness. One would never undertake such a thing if one were not driven on by some demon whom one can neither resist nor understand. For all one knows that demon is simply the same instinct that makes a baby squall for attention. And yet it is also true that one can write nothing readable unless one constantly struggles to efface one's own personality. Good prose is like a windowpane. I cannot say with certainty which of my motives are the strongest, but I know which of them deserve to be followed. And looking back through my work, I see that it is invariably where I lacked a political purpose that I wrote lifeless books and was betrayed into purple passages, sentences without meaning, decorative adjectives and humbug generally.