Types of organizations


Organization types are the different ways in which an organization can present itself. In this sense, depending on the aims or objectives they pursue, their size, the sector in which they operate or their legal form, these organizations can be classified into various types.

Thus, the word organization comes from the Greek "organon", and in its translation, its meaning means "instrument". Therefore, we are talking about tools that are used in order to achieve a certain objective. Thus, classifying them helps us understand them better.

That said, let's look at the most relevant types of organization.

Types of organizations depending on the purpose pursued

In this case, we focus on the objectives or ends pursued by the organization.

Thus, we can speak of three types:

  • Business organization: It is one of the most common, the company. In this case, the ultimate goal is to obtain an economic benefit. Of course, this must be accompanied by others related to the environment in which it operates. This is the case of social or environmental objectives.
  • Non-profit organization (NGO): We are facing a type of organization that does not pursue economic benefit, but social benefit. They carry out work that has an impact on society, nature, disadvantaged groups or countries.
Non Governmental Organization
  • Finally, we have the types of government organizations: Among them, would be those that offer public services. In this sense, services such as health, education or security.

Types of organizations based on their size

Based on size, although there are differences by country, they are usually classified taking into account the number of employees, turnover or fixed assets, among other factors.

Thus, the classification shown includes the most relevant types in economies such as Spain:

  • Microenterprise: It is the smallest. Usually with a maximum of ten employees; although it may vary from country to country. On the other hand, the turnover is low and, in addition, these companies have little infrastructure or fixed assets. In many countries they account for the highest percentage of all, by far.
  • Small companies: Those that, having more workers than the previous ones, do not reach a high number are usually included, as the types set out below show. Typically, a maximum referral of fifty employees is set. They are not as numerous as the previous ones, but their percentage is also very high. They are usually somewhat more capitalized and their turnover is higher.
  • Medium-sized company: On many occasions they are included together with the others, using the expression "SME", which means "small and medium-sized company". However, it can sometimes be useful to separate them. Well, in this case, the workers can reach two hundred and fifty. At the same time, they also have a greater volume of fixed assets. In addition, its size in the market is considerable, as is its turnover.
  • Large company: Companies of very different sizes are often mixed here. From those with just over 250 employees, to those with thousands of them. Many tend to operate in several countries and are therefore called transnational or multinational corporations. Its turnover is very significant, as well as its market share, which is also higher.

Types of organizations according to the sector to which they belong

Depending on your activity and the sector in which you operate, we have four classifications of the types of organizations. On the one hand we have three, which have been the traditional ones and, on the other hand, the fourth, considered relevant as a result of technological development.

In this sense, the classification would be as follows:

  • Primary sector: This includes companies related to agriculture, livestock or fishing and fish farming. We would be talking about those companies that are dedicated to the collection of the product, with a minimum treatment.
  • Secondary sector: This includes those companies dedicated to manufacturing and manufacturing. All those companies that transform a raw material into a different product would be included here.
  • Tertiary: This includes services, both private and public. In this case there is a wide variety within the sector. From public services offered by the administration, to small businesses or hotels.
  • The quaternary: Traditionally, this sector, related to technology, has been included in the tertiary. This was so because its percentage of the total was a very residual value. Nowadays, with the technological revolution, it has been considered more reasonable to have its own sector.

Types of organization based on their legal form

This is perhaps one of the most important. We have not included the natural person, called autonomous in many countries. The latter is the individual entrepreneur who risks all his assets, or, on the other hand, that of a group of them that make up a community of assets.

  • In relation to the business organization we have limited liability companies or anonymous companies. In both, the partners are only liable for the capital invested. A variant is the sole proprietorship, in which there is only one partner. On the other hand, there would be cooperative and limited partnerships, in which the partners respond with all their assets and can be workers –the first– or partners and workers –the second–.
  • Regarding non-profit organizations, or governmental, we can find associations or foundations; being necessary three members in the first, and an initial financial endowment in the second.On the other hand, there would be political parties, clubs or government organizations themselves.

Examples of organization types

Let's see, to finish, some examples and how we would classify them:

  • Coca-Cola: We are dealing with a large profit-making company, in the secondary sector, and with the legal form of a public limited company or similar.
  • Police or army: We are dealing with large governmental, non-profit organizations, their sector would be services –in this case public–.
  • A political party: It would be a non-profit organization, similar to an association, and that acts as a body of citizen representation.
  • A fruit warehouse with the legal form of a limited liability company and with 15 employees: We would be dealing with a small, for-profit company that operates in the service sector and whose partners respond only with the invested assets.

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