What is the difference between installing a program and copying a program's binaries to some directory?

Sometimes it is sufficient for a program to use, to extract its tarball and compile the makefile, but some programs need also to be installed. I guess, install process involves copying files to some specific directories and modifying some configuration files.

My question is, how can one tell, if a program needs to be installed, and which directories and configuration files should be involved in that case.