Meaning and Definition of Organisation:
We live in the age of organisations. Modern civilization requires large aggressions of people working together to produce the goods and services efficiently. Organisations are grand strategies created to bring order out of chaos when works together.
The structure resulting from three things is known organisation.
i. Identifying and grouping of work,
ii. defining and delegating authority and responsibility, and
iii. establishing relationships among those who are engaged in performing group activities.
Without defined relationships, there will be no organisation. Peter Drucker rightly says, An institution (organisation) is like a tune it is not constituted by individual sounds but by the relating between them.
Organisation is a dynamic tool for interweaning six M’s, Men, Money, Machines, Materials, Methods and Markets. People work for organisation’s objectives and manage its affairs for achieving them effectively and efficiently.
Some important definitions of organisation may be given as follows:
Hodge and Johnson
An organisation can be thought of as a complex relationships among human and physical resources and work, cemented together into a network of system.
James Mooney
Organisation is the form of every human association for attainment of a common purpose.
J.L. Massie
Organisation is the structure and process by which a cooperative group of human beings allocates its tasks among its members, identifies relationship and integrates its activities towards common objectives.
George Terry
Organizing is the establishing of effective Behavioural relationships among persons so that they may work together efficiency and gain personal satisfaction in doing selected tasks under given environmental conditions for the purpose of achieving some goal or objectives.
Organisation Concepts
Every scholar has defined organisation from his own perception. But in all, there are three concepts of organisation as follows:
1. Structure
2. Process
3. System
1. Organisation as a Structure
Weihrich and Koontz point out, Organisation implies a formalized intentional structure of roles or positions. Organisation structure may be defined as the established pattern of relationships among the component parts of an enterprise. In this sense, organisation structure refers to the network of relationships among individuals and positions in an enterprise. It is the network of horizontal and vertical relationships among the members of group designed to accomplish some common objectives. This network governs the activities of people in the form of a social group. The horizontal dimension shows differentiation of job into departments, divisions or sections. The vertical dimension reflects what is known as hierarchy or chain of command, of authority. The organisation structure is the skeleton framework of business enterprise. Thus, the organisation structure implies the following things:
(a). Division of labour into group activities under departments, divisions or sections and also into various positions.
(b). Assignment of tasks and activities to different persons and departments.
(c). The formal relationships with well-defined responsibilities.
(d). The hierarchical relationships with allocation of authority between superior and subordinates – delegation and decentralization of authority.
(e). Span of control with defined number of subordinates under a superior.
(f). Coordination among different departments and people.
(g). A set of policies, procedures, standards (goals) and methods of evaluation of performance, all formulated to guide the people and their activities.
However, the actual operations and behaviour of people are not always governed by the formal structure of relations. Hence, the formal structural arrangements are affected and modified by social and psychological forces combined known as informal organisation.
2. Organisation as a System
Organisation as a system implies the component parts, each of which has its unique properties, capabilities and natural relationships and thus all are interrelated and interdependent. Hence, system implies an arrangement and set of relationships among multiple parts operating as a whole, each part being called a sub-system. Every sub-system is itself a system composed of smaller interrelated parts of sub-system. The system produce synergic effect which means that the sum of all the parts is greater then the whole i.e., 2 2 = more than 4. Organisation as a system also implies that it is an open system, which means that it interacts with its environment for its survival, growth and development. An organisation as a socio-technological system consists of the following components or elements:
(a). Inputs
The system takes certain inputs from its environment. These inputs are human resources, physical resources and facilities, energy, supplies, technology and information.
(b). Processing or Transformation
Processing or transformation involves the utilization of the inputs through some specified technique to convert them into outputs. A number of sub-systems are created for processing or transformations purpose, such as production, finance, personnel and research and development. Interrelatedness and interdependence of all these sub-systems is kept in mind.
(c). Output
The processing or transformation technique results in output that may be intended and unintended. Intended outputs are usually called objectives or goals. For example, high productivity and efficiency we intended objectives. The output may consist of goods and services. An unintended output may be informal relation among the group members.
(d). Distribution
For distributing the output to the target market or consumers, several sub-systems may be created, such as sales, marketing, advertising, etc. Distribution may be done directly or through intermediaries known as wholesalers, semi-wholesalers and retailers.
(e). Management
The management component of the organisation system is concerned with the determination and implementation of processing and distribution activities in order to achieve system’s goals. It involves planning, organizing, staffing, directing and controlling.
(f). Feedback
For effective managing, feedback of information with regard to the quality, quantity, cost and time of system outputs is necessary. It also helps in establishing and enforcing standards for desired results. It facilities corrective action wherever needed in the system.
(g). Environment
The management components helps in coping with the environment, which is complex and fast changing in the modern world. Management takes adequate steps needed for availing the opportunities and averting the threats in the environment. If the organisation system intends to survive, grow and develops, it has to interact properly and successfully with its environment.
3. Organisation as a Process
Organisation as a process is known as organizing. Weihrich and Koontz point out, Organizing is
i. the identification and classification of required activities,
ii. the grouping of activities of activities necessary to attain objectives,
iii. the assignment of each grouping to a manager with the authority (dilatation) necessary for coordination horizontally (on the same or a similar organizational level) and vertically (for example, corporate, headquarters, division, and department) in the organization structure.’