Organization : Meaning and Definition

Principle & Practice of Management

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Organization : Meaning and Definition

Introduction

Organization involves division of work among people whose efforts must be coordinated to achieve specific objectives and to implement pre-determined strategies. Organisation is the foundation upon which the whole structure of management is built. It is the backbone of management. After the objectives of an enterprise are determined and the plan is prepared, the next step in the management process is to organize the activities of the enterprise to execute the plan and to attain the objectives of the enterprise. The term organization is given a variety of interpretations. In any case, there are two broad ways in which the term is used. In the first sense, an organization is understood as a dynamic process and a managerial activity which is necessary for bringing people together and tying them together in the pursuit of common objectives. When used in the other sense, the organization refers to the structure of relationships among positions and jobs which is built up for the realization of common objectives. Without organizing, managers cannot function as managers. Organisation is concerned with the building, developing and maintaining of a structure of working relationships in order to accomplish the objectives of the enterprise. Organisation means the determination and assignment of duties to people, and also the establishment and the maintenance of authority relationships among these grouped activities. It is the structural framework within which the various efforts are coordinated and related to each other. The sound organization contributes greatly to the continuity and success of the enterprise. The distinguished industrialist of America, Andrew Carnegie has shown his confidence in an organization by stating that: “Take away our factories, take away our trade, our avenues of transportation, our money, leave nothing but our organization, and in four years we shall have re-established ourselves.” That shows the significance of managerial skills and organization. However, good organization structure does not by itself produce a good performance. But a poor organization structure makes good performance impossible, no matter how good the individual may be.

Organization

Organization: Meaning and Definition

Unlike ‘management’ the term ‘organisation’ has also been used in a number of ways. Broadly speaking, the term ‘organisation’ is used in two different senses: as a process and as a structure of relationships.

Organization as a Process

Organisation is treated as a dynamic process and a managerial activity which is essential for planning the utilization of the company’s resources plant and equipment materials, money and people to accomplish the various objectives. To coordinate the employee’s activities in an orderly and efficient manner is very essential for bringing unity and harmony of their efforts in the pursuit of common objectives. The definitions of organization provide by Allen, Theo Haimann, Koontz and O’Donnell, Oliver Sheldon and G.E. Milward, etc. can be can be classified under this grouping viz. According to Allen an organization may be defined, “as a process of identifying and grouping the work to be performed, defining and delegating responsibility and authority and establishing a relationship for the purpose of enabling people to work most effectively together in accomplishing objectives.” According to Harold Koontz and O’Donnell, “Organising involves the grouping of activities necessary to accomplish goals and plans, the assignment of these activities to appropriate departments and the provision for authority delegation and coordination.” According to Prof. Hermann, “Organisation is a process of defining and grouping the activities of the enterprise and establishing the authority relationship among them.”

Organization as a Framework of Relationship

Organisation refers to the structure of relationship and among position jobs which are created to achieve certain objectives. The definitions of Henery, UrDavis, Mooney and Reily, Chester Barnard and Bakke, 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.” In the words of Chester Barnard, “A system of co-operative activities of two or more persons is called the organization.” Thus, from the above definitions, it may be concluded that the organization is the mechanism developed by management to unite the efforts of the people (employees) in order to realize the set objectives.