What is an Organization?

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What is an Organization?

Someone asked me the other day: what exactly is an organization?

DEFINITION OF AN ORGANIZATION
Well, in in simple terms, an organization is defined as: "an entity comprising one or more people that has at least one particular purpose". An organization is usually made up of various sub-organizations like business units and departments with specialized tasks.

EXAMPLES OF ORGANIZATIONS
Typical examples of organizations are:

• A business firm / company / corporation (for profit organizations)
• A government agency
• An NGO
• An association of volunteers
• A charity
• Various strategic alliances and partnerships
• A joint-venture
• An educational institution
• A special purpose vehicle
• A spin-off
• Etc.

CRITERIA FOR AN ORGANIZATION
As you can see in the above examples, organizations can differ a lot among each other. But organizations do have six things in common:

1. PURPOSE: They have at least one purpose / goal (that could be a pure economic and/or a moral purpose);
2. PEOPLE: They are comprised of at least one person, but normally of multiple people;
3. STRUCTURE: They have some form of organizational structure (how they are built up internally);
4. ASSETS: They normally have assets to accomplish their goals (machines, tools, but also knowledge and skills);
5. CONTINUITY: They aim for continuity and are permanent (as long as their purpose is not achieved);
6. COORDINATION AND DIVISION OF TASKS: In order to achieve their predetermined goal with a certain group of people, tasks will have to be distributed.

These 6 criteria set organizations apart from other social groups and coalitions.

FORMAL AND INFORMAL ORGANIZATION
A distinction can be made between the formal organization and the informal organization. The formal organization is the whole of the officially established procedures and decision-making rights, as established in the organization chart. The informal organization is the social structure of the employees, who discuss and align their work and conduct with each other.

THE STAKEHOLDERS OF A COMPANY
Stakeholders are interested parties, persons or organizations who can be influenced (in both positive and negative ways) by the organization, or who can exert influence on (part of) an organization (also in both positive and negative ways).
For example, stakeholders of companies include employees, local and national government, various pressure groups, etc.

LEGAL FORMS OF ORGANIZATIONS
Depending on the jurisdiction (country), organizations can take different legal forms. Roughly, a distinction can be made between organizations with legal personality and organizations without legal personality. The first group can independently participate in economic transactions and as such has its own rights and obligations.

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		5 MICHAEL RAVAIN HR Consultant, United States
	What is an Organization? Thank you for your explanation for what is an organization. I generally agree with your explanation. However, my conceptualization of "organization" is quite different today than it was 25-years ago, coming out of business school. I look after Organization Development for a major oil company. Legal structures and fiduciary criteria aside, I believe "organizations" are more of theoretical construct. They are the holistic representations of its individuals, teams, and processes. They provide a simple whole (gestalt) perspective of the units of complexity and dynamics of subsystems. There are exceptions (eg, culture), but from an organization development perspective, I generally see or conceptualize organizations as the effect of its sub-units, and not the other way around.

		0 Mrs.Sayran Ghafuri,Kittani Coach, Iraq
	How is an Organization Built? Can you explain how the organization is being built? I think that in your definition of the organization you were influenced by the philosophy of Henri Fayol in explaining the organization, as he considered it a mixture of materials and people, but I think it should be explained how an organization is built, so that everyone understands this topic, with appreciation.

		3 Jaap de Jonge Editor, Netherlands
	Formation of an Organization @Mrs.Sayran Ghafuri: Well, an organization can arise or be built in many different ways. It can arise naturally or as a result of conscious choices by owners, managers or as a result of stakeholder pressures and everything in between. In general, there is usually a growth process that goes through a number of stages. Greiner's Growth Model is a good tool for understanding these typical stages.

		1 Nader Chavoshi Boroujeni Manager, Iran
	New Definition of Organization @Mrs. Sayran Ghafuri: As an DBA student I think that, by the increasing development in business environments, people can build an organization without any materials. So, we should change the definition of organization. Do you agree?

		1 Mrs.Sayran Ghafuri,Kittani Coach, Iraq
	Organizations are Social Units that Aim to Provide Services to the Community @Nader Chavoshi Boroujeni: This depends on understanding the meaning of the organization and the type of organization. Presidency of State, Cabinet, Ministries, General Directorates, Hospitals, Schools, Courts, Training Centers, etcetera are all organised, but if you mean buildings, machinery, equipment, educational curricula etcetera, they represent organizational resources.