Organization

economic-dictionary

An organization is an association of people who interact with each other and use resources of various kinds in order to achieve certain objectives or goals.

An organization is an orderly structure where people with different roles, responsibilities or positions coexist and interact in order to achieve a particular objective.

The organization usually has rules (formal or informal) that specify the position of each person in the structure and the tasks that they should carry out.

Essential components of an organization

Every organization has basic or essential components, among which are:

  • A group of people who interact with each other.
  • A set of tasks or activities that are carried out in a coordinated way in order to achieve some objective.
  • Objectives and goals.
  • Resources or materials.
  • Norms or conventions that define the relationship of people and their role in the organization.
Interest groups

Types of organizations

Organizations can be classified in various ways. Here are some of the most relevant:

  • According to the structure: Organizations can be classified into formal and informal. Broadly speaking, the first is planned and has a defined hierarchical structure along with operating rules. The second, meanwhile, is born spontaneously by the affinity of people and the discovery of common interests.

Thus, for example, a company that produces footwear is a formal organization since it is defined by the central administration. The positions and responsibilities are detailed in written documents and must be known to everyone. At the same time, in the same company, we can find an informal organization, where affinities and confrontations arise between people. Each person has a position in the social group, but this is informal (not made explicit in documents).

  • According to their location: They can be local, national and international. Thus, for example, a sports club may be local (only from Aranjuez), while an organization such as the United Nations is international.
  • According to their size: They can be small, medium or large. Various criteria can be used to define the relative size. For example, in the case of companies, the European Commission recommends the simultaneous use of two criteria: The number of workers and income (or assets in its absence).
  • According to their property: They can be public (state or government) or private (common or legal persons) property. For example, municipalities are part of the government, while a dairy company can be privately owned. Within public organizations, in turn, we find state companies, regulatory entities, ministries, parliament, courts, among others. Likewise, within private organizations, one can distinguish private companies, non-governmental organizations, among others.
  • According to their purpose: They can be for-profit or non-profit. For example, banks are for profit, while humanitarian aid organizations are not.
Non Governmental Organization

Examples of organizations

Organizations can be as varied as the interests of the people who compose them.

As examples of widely known organizations we have:

  • Trade unions.
  • Political parties.
  • Companies.
  • Humanitarian aid organizations.
  • Sport clubs.

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