An organization is the formal association of two or more people who are in agreement to look for a common goal through efficient combination and implementation of plans, policies, rules and procedures. Organization helps people develop through joint efforts. An organization comes into existance only when there are a number of persons willing to contribute towards a common goal.
In the definition of W. G. Scott, "A formal organization is a system of coordinated activities of a group of people working cooperatively towards a common goal under authority or leadership."
Organization can be viewed into two ways static sense and dynamic sense. In a static sense, an organization is a structure performed by a group of individuals who are working together towards a common goal. In a dynamic sense, organization is a process of combining and assigning various function to different people and fixing the responsibilities for accomplishing these works.
Objectives of an Organization
The objectives of organization may vary depending on the nature of organization and the function it performs. In this case, if we take the objectives of business organization then we may list out the following major objectives. Objectives of organization may be economic, social and human. A short explanation is given below:
Economic objectives
1. Earning profit
The major economic objective of business organization is to earn profit. It is because the businessman needs to expand, diversify the business.
2. Production of goods and services
Organization has to produce goods and services as per the changing needs, wants, income level of the consumers. It is the centre of the business.
3. Creation of market
It is the creation of demand of the product and services. There is no meaning of business without demand of product and services.
Social objectives
1. Providing goods
Business organization should provide goods and services for the welfare of the society. It should fulfill mental and physical needs of the society.
2. Supply of quality goods
Business organization should be able to provide qualitative goods for the society. Unhealthy and low quality goods adversely affect to the society and finally reduced the demand of the product.
3. Providing employment
Business is major source of employment. It has to perform several activities that finally create new employment in the society.
Human objectives
1. Welfare of employees
Employees are the valuable assets of any organization. Therefore, they are to be rewarded reasonable rate of salary, wages, bonous, allowance and other incentives.
2. Satisfaction of consumer
Consumers are the king of the market. So, existence of organization is meant for consumer satisfaction. Business should provide qualitative goods at reasonable price to the consumers.
3. Satisfaction of shareholders
Shareholders are the owners of the business. Shareholders expect certain rate of return on their investment. Business has to provide reasonable rate of return to the shareholders.
Characteristics of an Organization
The major characteristics of an organization are listed as below:
Collection of people
An organization consists of people who interact with each other while they are at work. On organization, people perform a variety of activities to acheive goals. Mutual understanding and cooperation is necessary for smooth operation of an organization.
Common goals and purposes
People in the organization work individually or in a group in order to attain organizational goals. Organization is created to acheive goal of common interest to its members. Goal binds the organizational members together and motivates them towards works.
Division of work
Organizing is basically a process of division of work. It means dividing total task into smaller work to be handled by one person. Every job is assigned to the employee who is capable to perform the particular job and this also creates speciation.
Coordination of efforts
All activities in the organixation are performed through coordination. The total works which are divided to perform by individuals need to be linked together to focous on objectives. Coordination links the activities of the various departments.
Social composition
An organization exists to serve the needs of people. So it is a social unit. People in the organization interact with each other while they are at work. This interaction among organizational members leads to the development of network of social relations in work places.
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