organization

A social unit of people that is structured and managed to meet a need or to pursue collective goals.
All organizations have a management structure that determines relationships between the
different activities and the members, and subdivides and assigns roles, responsibilities, and
authority to carry out different tasks. Organizations are open systems--they affect and are affected
by their environment.

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Why Is Organization Important?

organization-importantCredit: Les and Dave Jacobs

Organization is important because it allows individuals and groups to perform tasks more
efficiently. It helps people find information and items faster, and it allows groups to work together
without wasting time. Organization is important for dealing with information as well.

When items are organized, finding them is easier, and the time is takes to organize a home or
office will save time that would otherwise be spent searching. Organization is an important part
of logistics; warehouse management deals with ensuring that everything is stored in a designated
location. Efforts to reorganize items can lead to time saved as well.

Organization also deals with ideas and abstract concepts, and it is related to categorization. A
zoologist, for example, might need to identify a particular animal. By using an organized system
of categorization, the zoologist would be able to find attributes of the animal in question and
identify it quickly using organized reference material.

Humans excel at finding patterns, and organization allows people to rely on their ability to cope
with patterns to locate items and information more easily. Alphabetical organization, for example,
allows people to know where to look. Other systems are popular as well. The Dewey Decimal
System helps people know where to find a book by categorizing the books by subject matter.

Definition: Organizational Unit

Organizational Units are basically organisational groups each comprising of a set of people who
get together to accomplish a specific function. The key business functions in an organisation are
often divided into units in order to streamline processes and maximize efficiency. The different
organisational units could be Finance, HR, IT and systems, marketing, specific line functions
depending on the industry and so on.

Enterprises, Teams, Companies, Departments etc. could be units. The units are formed based on a
broad organisation definition which defines the characteristics and attributes of that unit.
Further, for every unique value of the attributes, there can be multiple units. For example, if an
organisation has many design departments, the definition would be Design Department and then
the units could be Head Office Design Department, Product Layout Department, Product design
Department etc.

Mostly, each organisational unit has a considerable degree of freedom and flexibility in its nature
of operations and decision making. This facilitates efficient allocation and utilisation of resources
coupled with a faster decision making process.

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Organization: Meaning, Definition, Concepts and Characteristics

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Organization: Meaning, Definition, Concepts and Characteristics!

Meaning:

An entrepreneur organizes various factors of production like land, labour, capital, machinery, etc.
for channelizing them into productive activities. The product finally reaches consumers through
various agencies. Business activities are divided into various functions, these functions are
assigned to different individuals.

Various individual efforts must lead to the achievement of common business goals. Organization
is the structural framework of duties and responsibilities required of personnel in performing
various functions with a view to achieve business goals through organization. Management tries
to combine various business activities to accomplish predetermined goals.

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Present business system is very complex. The unit must be run efficiently to stay in the
competitive world of business. Various jobs are to be performed by persons most suitable for
them. First of all various activities should be grouped into different functions. The authority and
responsibility is fixed at various levels. All efforts should be made to co-ordinate different
activities for running the units efficiently so that cost of production may be reduced and
profitability of the unit may be increased.

Definitions:

Louis Allen, “Organization is the process of identifying and grouping work to be performed,
defining and delegating responsibility and authority and establishing relationships for the
purpose of enabling people to work most effectively together in accomplishing objectives.” In the
words of Allen, organization is an instrument for achieving organizational goals. The work of
each and every person is defined and authority and responsibility is fixed for accomplishing the
same.

Wheeler, “Internal organization is the structural framework of duties and responsibilities

required of personnel in performing various functions within the company………… It is essentially
a blue print for action resulting in a mechanism for carrying out function to achieve the goals set
up by company management”. In Wheeler’s view, organization is a process of fixing duties and
responsibilities of persons in an enterprise so that business goals are achieved.

Koontz and O’Donnell, ‘The establishment of authority relationships with provision for co-
ordination between them, both vertically and horizontally in the enterprise structure.” These
authors view organization as a coordinating point among various persons in the business.

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Oliver Sheldon, “Organization is the process so combining the work which individuals or groups
have to perform with the facilities necessary for its execution, that the duties so performed
provide the best channels for the efficient, systematic, positive and coordinated application of the
available effort”. Organization helps in efficient utilization of resources by dividing the duties of
various persons.

Spriegel, “In its broadest sense organisation refers to the relationship between the various factors
present in a given endeavor. Factory organisation concerns itself primarily with the internal
relationships within the factory such as responsibilities of personnel, arrangement and grouping
of machines and material control. From the standpoint of the enterprise as a whole, organisation
is the structural relationship between the various factors in the enterprise”.

Spriegel has given a wide definition of the organization. He has described it as the relationship
among persons, factors in the enterprise. All factors of production are coordinated in order to
achieve organisational objectives.

George Terry, “Organising is the establishing of effective authority relationships among selected
work, persons, and work places in order for the group to work together efficiently”. According to
Terry organisation is the creation of relationship among persons and work so that it may be
carried on in a better and efficient way.

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C.H. Northcott, ‘The arrangement by which tasks are assigned to men and women so that their
individual efforts contribute effectively to some more or less clearly defined purpose for which
they have been brought together”. According to Northcott the purpose of organisation is to co-
ordinate the activities of various individuals working in the organisation for the attainment of
enterprise goals.

L.H. Haney, “Organisation is a harmonious adjustment of specialised parts for accomplishment of

some common purpose or purposes”. Organisation is the adjustment of various activities for the
attainment of common goals.

Concepts of Organisation:

There are two concepts of organisation:

1. Static concept

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2. Dynamic concept,

1. Static Concept:

Under static concept the term ‘organisation’ is used as a structure, an entity or a network of
specified relationship. In this sense, organisation is a group of people bound together in a formal
relationship to achieve common objectives. It lays emphasis on position and not on individuals.

2. Dynamic Concept:

Under dynamic concept, the term ‘organisation’ is used as a process of an on-going activity. In this
sense, organisation is a process of organising work, people and the systems. It is concerned with
the process of determining activities which may be necessary for achieving an objective and
arranging them in suitable groups so as to be assigned to individuals. It considers organisation as
an open adoptive system and not as a closed system. Dynamic concept lays emphasis on
individuals and considers organisation as a continuous process.

Characteristics of Organisation:
Different authors look at the word ‘organisation’ from their own angle. One thing which is
common in all the viewpoints is that organisation is the establishment of authority relationship
among persons so that it helps in the achievement of organisational objectives.

Some of the characteristics of organisation are studied as follows:

1. Division of Work:

Organisation deals with the whole task of business. The total work of the enterprise is divided into
activities and functions. Various activities are assigned to different persons for their efficient
accomplishment. This brings in division of labour. It is not that one person cannot carry out many
functions but specialisation in different activities is necessary to improve one’s efficiency.
Organisation helps in dividing the work into related activities so that they are assigned to
different individuals.

2. Co-Ordination:

Co-ordination of various activities is as essential as their division. It helps in integrating and

harmonising various activities. Co-ordination also avoids duplications and delays. In fact, various
functions in an organisation depend upon one another and the performance of one influences the
other. Unless all of them are properly coordinated, the performance of all segments is adversely
affected.

3. Common Objectives:

All organisational structure is a means towards the achievement of enterprise goals. The goals of
various segments lead to the achievement of major business goals. The organisational structure
should build around common and clear cut objectives. This will help in their proper
accomplishment.

4. Co-operative Relationship:

An organisation creates co-operative relationship among various members of the group. An

organisation cannot be constituted by one person. It requires at least two or more persons.
Organisation is a system which helps in creating meaningful relationship among persons. The
relationship should be both vertical and horizontal among members of various departments. The
structure should be designed that it motivates people to perform their part of work together.

5. Well-Defined Authority-Responsibility Relationships:

An organisation consists of various positions arranged in a hierarchy with well defined authority
and responsibility. There is always a central authority from which a chain of authority
relationship stretches throughout the organisation. The hierarchy of positions defines the lines of
communication and pattern of relationships.