The Securities and Exchange Commission, which regulates the nation's publicly owned corporations, is beset by internal conflict that sources inside and outside the agency say could impair its effectiveness.

At the center of the storm is the SEC's new chairman, Harold M Williams, 50, a Carter administration appointee who took office in the spring of 1977. Williams is a former chairman of Norton Simon Inc., and a former dean of the UCLA Graduate School of Management.

As numerous SEC staff members see it, Williams is and introverted and painfully cautions person whose unwillingness-or inability-to communicate with them has made it impossible for them to determine what directions the agency should be taking.

The result has been that many on the staff have become demoralized, and some senior members say they are ready to quit.

In addition, Williams has named his top assistant, Ralph Ferrar, to the sensitive job of agency general counsel and, according to the staff, elevated the job to a policy-making level over them.

Williams admits that "it's clear that there's friction there," but denies he is indifferent to any of the staff. "Part of my management style is to keep working on ideas until I've reached a conclusion," he says. "And I don't announce decisions until I'm satisfied.

For all its present doubts, however, the staff gives Williams, who was an 18-year-old Phi Beta Kappa at UCLA, high grades for hard work and intelligence. "But he's been terrible at communicating the larger scheme of thing," says one high SEC official.

Williams' decisions of the course taken by the SEC are critical to securities markets and to the publicly owned companies it oversees. Each morning in the SEC's cramped waiting room on the first floor, powerful attorneys and business executives gather to wait their moment with the commission staff.

The current problem basically began last July, when Harvey Pitt resigned as general counsel and Williams replaced him with his executive assistant, Ferrera Pitt and had spent 10 years as an attorney in the office before being named general counsel in 1975.

To many in the agency, putting the inexperienced Ferrara in the sensitive spot was troubling. And when a few weeks later the general Counsel's staff was increased by about 15 members to 100 and given responsibility for reviewing proposed investigations by the enforcement division before they were presented to the commission, morale in that division plummetted further. At the same time, two other divisions have waited months for key replacements.

The 5-member commission must authorize all investigations and other major endeavors of the staff. Each division is staffed by attorneys who present their arguments directly to the commission. But now, suddenly, the various divisions feel they are being-guessed by Ferrara.

In the past, the general cousel simply reviewed the legal implications of staff actions. Now, according to several staffers, the counsel is taking an assertive policy role. And this has caused staffers in those divisions to complain bitterly that Williams' man is looking over their shoulders.

Williams denies this: " . . . It's not my desire that they (general counsel's office) get between the divisions and the commission or serve as an extension of the chairman's office."

In the midst of all this, the staff feels, an important new area of responsibility is being neglected.

In 1975, Congress mandated the SEC to create a national securities market system. This system sould allow any broker on any exchage to trade stocks listed on any other exchange. The system would sharply curb the power of the New York Stock Exchange, which currently limits trading in its stocks to member brokers.

Last January Williams called a rare press conference to announce a schedule for setting up the national market system. But that was the last anyone has heard of the schedule.

"We set a much too ambitious schedule," says Williams, who adds that he feel "we've actually made a great deal of progress."

Another problem at the agency is that Commissioner John Evans, who is admired by the staff as a diligent and imaginative interpreter of the securities laws, has been waiting since last June to learn if the White House will reappoint him to another 5-year term. The securities industry, particularly the New York Stock Exchange, has been pushing its own candidate against Evans because he strongly endorsed the national market.

While two other commissioners, Philip Loomis Jr, and Irving Pollack, have expressed support for Evans, Williams has been silent.

"I've taken no public stand on Evans," says Williams. "I never do with personnel."

The fifth commissioner, Roberta S. Karmel, a former New York lawyer who was appointed in September 1977, by President Carter, has proven to be the SEC's most controversial member. She is pointed as by numerous staff members as a reason for the morale problems.

"Contrary" and "antagonistic" are the words most often used to describe her performances at meetings with the staff.

But Karmel bristles at the description. "I'm just not ready to assume that merely because a government official suggests something, it's automatically in the public interest." she says.

Williams has made a public commitment to serve a full five year term at the commission, which will make him the first chairman to do so. He already has appointed several department heads, and before he finishes the SEC will more closely reflect him than it has any chairman in its history.