Meaning of Organisation

Meaning of Organisation

Broadly speaking, the term ‘organisation’ is used in four different senses: as a process, as a structure of relationship, as a group of persons and as a system, as given below which explains Nature of Organization-

1.Organisation as a Process: In this first sense, organisation is treated as a dynamic process and a managerial activity which is essential for planning the utilization of company’s resources, plant an equipment materials, money and people to accomplish the various objectives.

For Detail Note- refer at end

2.Organisation as a Framework of Relationship/Structure- In the second sense organisation refers to the structure of relationships and among position jobs which is created to release certain objectives. The definitions of Henry, Urwick, Farland, Northcourt, Lansburgh and Spriegel Breach, Davis, Mooney and Reily etc., come under this group. For example: According to Mooney and Reily, “Organisation is the form of every human association for the attainment of a common purpose.”

For Detail Note- refer at end

3.Organisation as a Group of persons: In the third sense, organisation is very often viewed as a group of persons contributing their efforts towards certain goals. Organisation begins when people combine their efforts for some common purpose. It is a universal truth that an individual is unable ability and resources. Barnard has defined ‘Organisation’ as an identifiable group of people contributing their efforts towards the attainment of goals.

4.Organisation as a System: In the fourth sense, the organisation is viewed as system. System concepts recognize that organizations are made up of components each of which has unique properties, capabilities and mutual relationship. The constituent element of a system are linked together in such complex ways that actions taken by one producer have far reaching effect on others.

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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.

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.

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.

Keith Davis, “Organisation may be defined as a group of individuals, large of small, that is cooperating under the direction of executive leadership in accomplishment of certain common object.”

Chester I. Barnard, “Organisation is a system of co-operative activities of two or more persons.”

[NOTE- No need to learn each definition. As seen in previous year questions UPSC use one of definition and ask  features of Organization or explain, etc. So,One just read so that can answer confidently. Can learn one definition and quoting it, give value addition.]

**Organisation as a Process

As a process, organisation is an executive function. It becomes a managerial function involving the following activities:

(i) Determining activities necessary for the accomplishment of the business objectives,

(ii) Division of work,

(iii) Grouping of inter-related activities,

(iv) Assigning duties to persons with requisite competence,

(v) Delegating authority, and

(vi) Co-ordinating the efforts of different persons and groups.

When we consider organisation as a process, it becomes the function of every manager. Organising is a continuous process and goes on throughout the life-time of an enterprise. Whenever there is a change in the circumstances or material change in situation, new type of activities spring up.

So, there is a need for constant review and re-assignment of duties. Right persons have to be recruited and necessary training imparted to make them competent to handle the jobs.

The process of organisation thus, involves dividing the work in a rational way and integrating the activities with work situations and personnel. It also represents humanistic view of the enterprise since it is the people who are uppermost in the process of integration of activities. Continuous review and adjustment makes it dynamic as well.

** Organisation as a Framework of Relationship/Structure

As a structure, organisation is a network of internal authority and responsibility relationships. It is the framework of relationships of persons operating at various levels to accomplish common objectives. An organisation structure is a systematic combination of people, functions and physical facilities.

It constitutes a formal structure with definite authority and clear responsibility. It has to be first designed for determining the channel of communication and flow of authority and responsibility. For this, different types of analysis have to be done. Peter F Drucker suggests following three types of analysis:

(i) Activities analysis

(ii) Decision analysis

(iii) Relations analysis

A hierarchy has to be built-up i.e., a hierarchy of positions with clearly defined authority and responsibility. The accountability of each functionary has to be specified. Therefore, it has to be put into practice. In a way, organisation can be called a system as well.

The main emphasis here is on relationships or structure rather than on persons. The structure once built is not liable to change so soon. This concept of organisation is, thus, a static one. It is also called classical concept. Organisation charts are prepared depicting the relationship of different persons.

In an organisation structure, both formal and informal organisations take shape. The former is a pre-planned one and defined by the executive action. The latter is a spontaneous formation, being laid down by the common sentiments, interactions and other interrelated attributes of the people in the organisation. Both formal and informal organisations, thus, have structure.