Organization

An organization (British English: Organisation) is a group—like a company, institution, corporation, or association—made up of one or more people working toward a specific goal.

Some organizations operate secretly or illegally, such as secret societies, criminal groups, or resistance movements. Sometimes, they face opposition from other organizations (e.g., the group led by Martin Luther King Jr.).^[1]

Governments may officially recognize an organization if it:

• Registers legally (like a corporation),
• Gains public attention (like advocacy groups),
• Raises concerns (like resistance movements), or
• Represents a group of people (e.g., the Polisario Front is seen as the voice of the Sahrawi people and runs a partially recognized state).

Social groups are related but broader—they can include groups that aren’t formal organizations.^[2]

Organizations and institutions can mean similar things. However, scholar Jack Knight explains that organizations are usually more specific. Organizations may be made up of smaller institutions that guide how members interact.^[3]

The word "organization" comes from French and Latin roots, which trace back to the Greek word organon, meaning tool, instrument, or organ.

Types

There are many types of organizations recognized by law. These include businesses like corporations, government bodies, non-governmental organizations, political organizations, international organizations, religious organizations, armed forces, charities, non-profits, partnerships, cooperatives, and educational institutions, etc.

A hybrid organization is one that works in both the public and private sectors at the same time. It takes on public responsibilities while also doing business in the market.

A voluntary association is made up of people who join and work together without being paid. Depending on the laws in a country, these groups might not need to register officially. They can be informal, like clubs or groups with a shared goal, which they may express in a written statement or simply through their activities.

Structure

Main article: Organizational structure

The study of organizations includes a focus on optimising organizational structure. According to management science, most human organizations fall roughly into four types:

• Committees or juries
• Ecologies
• Matrix organizations
• Pyramids or hierarchies

Committees or juries

These consist of a group of peers who decide as a group, perhaps by voting. The difference between a jury and a committee is that the members of the committee are usually assigned to perform or lead further actions after the group comes to a decision, whereas members of a jury come to a decision. In common law countries, legal juries render decisions of guilt, liability, and quantify damages; juries are also used in athletic contests, book awards, and similar activities. Sometimes a selection committee functions like a jury. In the Middle Ages, juries in continental Europe were used to determine the law according to consensus among local notables.

Committees are often the most reliable way to make decisions. Condorcet's jury theorem proved that if the average member votes better than a roll of dice, then adding more members increases the number of majorities that can come to a correct vote (however correctness is defined). The problem is that if the average member is subsequently worse than a roll of dice, the committee's decisions grow worse, not better; therefore, staffing is crucial.

Parliamentary procedure, such as Robert's Rules of Order, helps prevent committees from engaging in lengthy discussions without reaching decisions.

Ecologies

This organizational structure promotes internal competition. Inefficient components of the organization starve, while effective ones get more work. Everybody is paid for what they actually do, and so runs a tiny business that has to show a profit, or they are fired.

Companies that utilize this organization type reflect a rather one-sided view of what goes on in ecology. It is also the case that a natural ecosystem has a natural border – ecoregions do not, in general, compete with one another in any way, but are very autonomous.

The pharmaceutical company GlaxoSmithKline talks about functioning as this type of organization in this external article from The Guardian. By:Bastian Batac De Leon.

Matrix organization

This organizational type assigns each worker two bosses in two different hierarchies. One hierarchy is "functional" and assures that each type of expert in the organization is well-trained, and measured by a boss who is a super-expert in the same field. The other direction is "executive" and tries to get projects completed using the experts. Projects might be organized by products, regions, customer types, or some other schemes.

As an example, a company might have an individual with overall responsibility for products X and Y, and another individual with overall responsibility for engineering, quality control, etc. Therefore, subordinates responsible for quality control of project X will have two reporting lines. The United States aerospace industries were the first to officially use this organizational structure after it emerged in the early 1960s.^[4]

Pyramids or hierarchial

A hierarchy is a system where one leader is in charge of other people in the organization. It is often compared to a pyramid, where each level needs the one below it for support. If there aren't enough blocks at the bottom, the whole structure would fall. In the same way, if a leader loses the support of their team, the organization can fail. This idea was humorously explored in a book from 1969 called The Peter Principle, which introduced the term hierarchiology and claimed that in a hierarchy, employees eventually get promoted to a position where they are no longer good at their job.

Theories

In social sciences, organizations are studied in many fields, including sociology, economics, political science, psychology, management, and organizational communication. The general study of organizations is often called organizational structure, organizational studies, organizational behavior, or organization analysis. There are several ways to look at organizations, and some of these views can work together:

• From a functional perspective, the focus is on how organizations like businesses or governments are used.
• From an institutional perspective, an organization is seen as a purposeful structure within a social setting.
• From a process-related perspective, an organization is viewed as something being organized or reorganized, focusing on tasks or actions.

Sociology is the study of modern institutions, where each institution serves a purpose like the organs of a body. In social and political sciences, an organization can also mean a group of people working together toward a shared goal or product. This teamwork is usually shaped by rules and formal membership. Sociology separates organizations into formal ones that are planned and follow rules, and informal ones that form naturally without planning. It mainly looks at organizations from an institutional point of view, seeing them as lasting systems where tasks are completed through a structured division of work, guided by rules.

Economic views on organizations often begin with the idea of dividing work among people. This division leads to specialization, where each person focuses on a specific task, making them more skilled at it. As specialization increases, there is a greater need to coordinate everyone’s work. From an economic standpoint, both markets and organizations are ways to coordinate these tasks and transactions.

An organization can be understood by looking at who is part of it, how its members communicate, how much control it has over its own actions, and how it responds to outside events. These factors show what makes an organization act together as one group.

When the different parts of an organization work together in a planned and organized way, they can accomplish tasks that would be too difficult for one person alone. However, this cooperation comes at a cost—individuals in the organization may have less freedom. The main benefits of organizations include doing more of the same task more efficiently, combining different skills or features, and expanding what the group can achieve. On the other hand, problems can include becoming slow or less flexible due to the need for coordination, and a reduced ability for individuals to interact freely.^[5]

Leadership

In a formal, hierarchical organization, a leader is given a management role and has the official right to give orders and expect obedience because of their position. However, to truly use this authority, the leader also needs to have the right personal qualities. Authority is not automatic; it depends on the leader’s ability to earn respect. If a manager lacks the necessary skills or qualities, someone else in the group—an emergent leader—might take on an informal leadership role and reduce the manager to a symbolic figure. Still, only the official leader has the power that comes with formal rules and consequences. For someone with personal influence to make it official, they must earn a formal position in the hierarchy that matches their influence with actual authority.^[6]

Formal organizations

A formal organization is set up to achieve specific goals. Its structure shows how these goals are divided into smaller parts, with different sections like divisions, departments, jobs, and tasks handling different responsibilities.^[7] Because of this setup, the organization is expected to treat both its members and clients in a neutral, professional way. According to Weber, people are hired and promoted based on merit or seniority. Each employee is paid and has job security, which protects them from unfair treatment by their bosses or powerful clients. The higher someone is in the organization, the more they are expected to know and be able to solve problems that come up in lower levels. This system, known as a bureaucracy, is what gives leaders in each part of the organization their authority.^[8]

Informal organizations

Unlike someone officially appointed as the head of a group, an informal leader rises naturally within the unofficial part of an organization. This informal organization reflects the personal goals and needs of its members, which may or may not match the goals of the official, formal organization. The informal side is a natural part of human life, where people form groups and connections on their own, simply because it feels right to do so.^[8]

In the past, people focused mainly on personal survival and protection. Today, people spend much of their time working in organizations, but their basic need to feel safe, supported, and part of a group hasn’t changed. This need is often met through the informal organization and the unofficial leaders who come from it.^[6]

These leaders don’t get their power from a job title but from personal qualities, specific situations, or a mix of both. People follow them willingly because they offer guidance and support in ways that feel natural. Instead of using official authority, these leaders use influence and power. Influence is the ability to get others to cooperate through persuasion or rewards. Power goes further, involving the ability to make others act by controlling consequences or punishments.^[6]

The interplay between formal and informal organizations

Since most organizations use both formal and informal systems, researchers have studied how these two types interact. Some believe that formal and informal systems replace each other. For example, if people trust each other, they may not need a formal contract, and using one might even hurt the relationship. Others argue that formal and informal systems can work together.^[9] For instance, formal rules and controls can help build strong relationships and shared expectations over time.^[10]