Social interaction refers to the ways in which people respond to one another. How we interact with people is shaped by our perception of their position relative to our own. Our response to someone's behavior is based on the meaning we attach to his or her actions. Reality is shaped by our perceptions, evaluations, and definitions. The ability to define social reality reflects a group's power within a society.

All social interaction takes place within a social structure—a series of predictable relationships composed of various positions that people occupy. Occupying those positions shapes how we think and what resources we have access to. For our purposes, any social structure can be broken into six elements: statuses, social roles, groups, social networks, virtual worlds, and social institutions.

Sociologists use the term status to refer to any of the full range of socially defined positions within a large group or society. A person can hold a number of statuses at the same time. An ascribed status is assigned to a person by society without regard for the person's unique talents or characteristics, generally at birth. An achieved status is attained by a person largely through his or her own efforts. A master status dominates other statuses and thereby determines a person's general position within society.

A social role is a set of expectations for people who occupy a given social position or status. Role conflict occurs when incompatible expectations arise from two or more social positions held by the same person. Role strain is a term used to describe the difficulty that arises when the same social position imposes conflicting demands and expectations. The process of disengagement from a role that is central to one's self-identity in order to establishment a new role and identity is referred to as role exit.

A group is any number of people with similar norms, values, and expectations who regularly and consciously interact. Groups play a vital part in a society's social structure. Much of our social interaction takes place within groups and is influenced by their norms and sanctions. Sociologists have made distinctions between the various types of groups. A primary group is a small group characterized by intimate, face-to-face association and cooperation. Primary groups play a pivotal role both in the socialization process and the development of roles and statuses. Secondary groups are formal, impersonal groups in which there is little social intimacy or mutual understanding. In-groups are groups to which people feel they belong, whereas out-groups are groups to which people feel they do not belong. A reference group is used as the standard by which individuals evaluate themselves or their own behavior. A coalition is a temporary or permanent alliance geared toward a common goal. Some coalitions are intentionally short-lived.

Members of different groups make connections through a series of social relationships known as a social network. With advances in technology, we can now maintain social networks electronically; we don't need face-to-face contact. In some of these virtual worlds, participants create avatars, their online representation as a character.

Social institutions are organized patterns of beliefs and behavior centered on basic social needs. One way to view social institutions is seeing how they fulfill basic functions. This view emphasizes the importance of social order. Sociologists who focus on power, the consequences of difference, and resource distribution suggest that our construction of social institutions reinforces inequality, acting to maintain the privileges of the most powerful individuals and groups within a society. Others focus on our everyday interactions within the contexts of these institutions to understand why we think and act the way we do.

A bureaucracy is a component of a formal organization that uses rules and hierarchical ranking to achieve efficiency. Max Weber developed an ideal type of bureaucracy to serve as a standard for evaluation, which consisted of five basic characteristics: (1) division of labor; (2) hierarchy of authority; (3) written rules and regulations; (4) impersonality; and (5) employment based on technical qualifications. Sociologists have used the term bureaucratization to refer to the process by which a group, organization, or social movement increasingly relies on technical-rational decision making in the pursuit of efficiency. The iron law of oligarchy describes how even a democratic organization will eventually develop into a bureaucracy ruled by a few (oligarchy). According to the scientific management approach, workers in an organization are motivated almost entirely by economic rewards. By contrast, the human relations approach emphasizes the role of people, communication, and participation within a bureaucracy.

Ferdinand Tönnies used the term Gemeinschaft to refer to a small, close-knit community, typical of rural life, where people have similar backgrounds and life experiences. Conversely, the Gesellschaft is an ideal type characteristic of modern urban life. Here, most people are strangers who feel little in common with one another. Émile Durkheim developed the concepts of mechanical solidarity and organic solidarity to describe the kind of consciousness that develops in societies where there is a simple or complex division of labor, respectively. In Gerhard Lenski's view, a society's level of technology is critical to the way it is organized. The hunting-and-gathering society, the horticultural society, and the agrarian society are three types of preindustrial societies. An industrial society depends on mechanization to produce its goods and services. The economic system of a postindustrial society is engaged primarily in the processing and control of information. A postmodern society is a technologically sophisticated, pluralistic, interconnected, globalized society.