Nature, Characteristics and Types of Organization | Principles of Management

Nature of Organization

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Nature, Characteristics and Types of Organization

Nature of Organization

Organization is a social system composed of people, structure and technology for achieving common goals in a dynamic environment.

In other words, Organization is a human association, where two or more people come together with a certain common aim and equipment and desire to achieve certain common goals through planned joint effort and team work.

According to S.A Sharlekar and V.S. Sherlekar, “Organization is a mechanism or a basic framework enabling person to work together effectively and achieve the set goals through integrated group effort. It is a medium for the management to exercise managerial functions.”

Similarly, according to W.J Duncan, “An organization is a collection of interacting and interdependent individuals who work toward common goals and whose relationship are determined according to a certain structure.”

Therefore, organization is a place with certain structure, where people come and work together to achieve a common goal, in a changing environment.

  • Tribe, ethnic groups, families are not organization.
  • The three essential of an organizations are: - a. people b. common goal c. Joint effort.

Characteristics of Organization:

  1. Human Association: Organization is the place where people work together to achieve the common goals. Thus, there is always the involvement of human resource to perform a variety of activities in goal achievement process.
  2. Common goal: Every organization has its goals. It is a common purpose which binds all the individuals and groups to contribute their effort.
  3. Division of work: Organization always divides the large task into smaller packages for easy and prompt functioning by individuals. This brings specialization in work.
  4. Hierarchy of authority: Organization has a chain of command, determined by hierarchy of authority. Under the basis of job responsibility and accountability, skill demand of the job and complexity of the job hierarchy of authority is constructed. The power of decision making and control is always determines by the hierarchy of authority in organization.
  5. Flexibility (Envrionmental Adaptation): Organizational activities directly and indirectly influence by the environmental factors. So it is always formulate its plans and policies that can match the changing requirements of environment.

Types of Organization:

We find different kinds of organization in our society. These organizations are classified according to the nature and purpose. They are as follows:-

  1. Business organization: The organization which is established in order to make profit is known as business organization. The prime beneficiaries of these organizations are the owners or shareholders. E.g. Surya Nepal Company, Buddha Air etc.
  2. Non-profit Social Organization: The organizations which are established not for making profit but for giving or providing services to the customer/clients or community are nonprofit social organizations. E.g. Tribhuvan University, Nepal Red Cross, Bir Hospital etc.
  3. Cooperative Organization: These types of organization are established to reduce the effort of competition and maximize the value of cooperation. The main aim of this organization is to fulfill the individual needs and prosperity of all members involved through collective effort.
  4. Government Organization: The organization formed by the government to provide service to general public is government organization. They can be ministries, department, military, police etc. The main goals of this type of organization are regulation and welfare of general public.
  5. International Organization: The organizations which are established by the involvement of different countries for the sake of their welfare are called international organization. E.g.  ASEAN, SAARC, UNDP, IMF etc. These organizations are always engage in promoting the collective interest of member countries.

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