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Organisation or organization

Alternative views and definitions

The term organization can be defined in a number of ways, such as a process, as a structure of relationship, as a group of persons, as a open dynamic system and so on. Structure and process are two complementary and strongly interrelated views of the organization. Organisation can be seen as a structured, on-going process that defines how to achieve pre-defined goals.

  • An instrument for achieving organizational goals
  • A process of fixing duties and responsibilities (i.e. roles) of agents in an enterprise so that shared goals are achieved
  • A coordinating point among various agents for the attainment of enterprise goals
  • Helps in efficient utilization of resources by dividing the duties of various agents (role allocation)
  • The creation of relationship among persons and work so that it may be carried on in a better and efficient way
  • The mechanism developed to unite the efforts of the people in order to realize the set objectives.

Generates a sense of purpose or goal, is driven, is a venture, an enterprise, projected in the future, something to be achieved. Identification/surfacing of rewards and benefits. Presence of planning for effective execution, defined roles, duties, tasks for every role, relationships between roles, and between roles and resources and processes, allocation of members to roles. Identification of authority and responsibility.

“... the process of identifying and grouping the 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.” — Louis A. Allen

Process of Organization

In traditional organizations

  • Step 1: Determination and classification of firm’s activities.
  • Step 2: Grouping of the activities into workable departments.
  • Step 3: Assignment of authority and responsibility on the departmental executives for undertaking the delegated tasks.
  • Step 4: Developing relationship amidst superior and subordinate, within the unit or department.
  • Step 5: Framing policies for proper coordination between the superior and subordnate and creating specific lines of supervision


  • Step 1: Determination and classification of firm’s activities.
  • Step 2: Grouping of the activities into roles.
  • Step 3: Design of the role system and specification of the flow of agents to roles. Assignment of roles when necessary.
  • Step 4: Surface relations between roles
  • Step 5: Framing policies for proper coordination between roles, peer review.

Organizational structure

See page on Organizational structure, and organizational architecture.

The organization can be seen as a structure. The aim of representing (make visible, formalize) the structure and to try to use this structure as a guide to organize activity is to maximize organizational welfare and individual goals.

The structure is a set of relationships that among agents who are involved in processes (who perform organizational tasks and duties). The organizational tasks are clustered into roles, which are clustered into areas/domains of activity (departments in traditional organizations). Relations of authority-responsibility are also called vertical relations, involved in hierarchies. In OVNs authority is based on reputation, which has dimensions of demonstrated knowledge and experience, commitment, etc. Authority is understood in context, for a limited time, as no permanent authority exists in OVNs. Relations between areas/domains of activity and xxx are called horizontal relations.

The structure also specifies division of work/labor and shows how different functions or activities are linked; to some extent it also shows the level of specialization of work activities. It also indicates the organizations authority structure and shows its reporting relationships.

Functions of organization

Why we get together?

  • Achieve more as groups of individuals.
  • Purpose, individual fulfillment.
  • Reduce cost of transactions, provision of resources.

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