Basic Definition of Organization

Written by Carter McNamara, MBA, PhD, Authenticity Consulting, LLC. Copyright 1997-2007.

Sections of This Topic Include:

Basic Definition
Organizations as Systems (of Systems of Systems ...)
Methods to the Madness: Systems Theory and Chaos Theory (optional reading)

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Basic Definition

Basically, an organization is a group of people intentionally organized to accomplish an overall, common goal or set of goals. Business organizations can range in size from two people to tens of thousands.

There are several important aspects to consider about the goal of the business organization. These features are explicit (deliberate and recognized) or implicit (operating unrecognized, "behind the scenes"). Ideally, these features are carefully considered and established, usually during the strategic planning process. (Later, we'll consider dimensions and concepts that are common to organizations.)

Vision

Members of the organization often have some image in their minds about how the organization should be working, how it should appear when things are going well.

Mission

An organization operates according to an overall purpose, or mission.

Values

All organizations operate according to overall values, or priorities in the nature of how they carry out their activities. These values are the personality, or culture, of the organization.

Strategic Goals

Organizations members often work to achieve several overall accomplishments, or goals, as they work toward their mission.

Strategies

Organizations usually follow several overall general approaches to reach their goals.

Systems and Processes that (Hopefully) Are Aligned With Achieving the Goals

Organizations have major subsystems, such as departments, programs, divisions, teams, eta. Each of these subsystems has a way of doing things to, along with other subsystems, achieve the overall goals of the organization. Often, these systems and processes are define by plans, policies and procedures.

How you interpret each of the above major parts of an organization depends very much on your values and your nature. People can view organizations as machines, organisms, families, groups, eta. (We'll consider more about these metaphors later on in this topic in the library.)

Organizations as Systems (of Systems of Systems)

Organization as a System

It helps to think of organizations are systems. Simply put, a system is an organized collection of parts that are highly integrated in order to accomplish an overall goal. The system has various inputs which are processed to produce certain outputs, that together, accomplish the overall goal desired by the organization. There is ongoing feedback among these various parts to ensure they remain aligned to accomplish the overall goal of the organization. There are several classes of systems, ranging from very simple frameworks all the way to social systems, which are the most complex. Organizations are, of course, social systems.

Systems have inputs, processes, outputs and outcomes. To explain, inputs to the system include resources such as raw materials, money, technologies and people. These inputs go through a process where they're aligned, moved along and carefully coordinated, ultimately to achieve the goals set for the system. Outputs are tangible results produced by processes in the system, such as products or services for consumers. Another kind of result is outcomes, or benefits for consumers, e.g., jobs for workers, enhanced quality of life for customers, etc. Systems can be the entire organization, or its departments, groups, processes, etc.<

Feedback comes from, e.g., employees who carry out processes in the organization, customers/clients using the products and services, eta. Feedback also comes from the larger environment of the organization, e.g., influences from government, society, economics, and technologies.

Each organization has numerous subsystems, as well. Each subsystem has its own boundaries of sorts, and includes various inputs, processes, outputs and outcomes geared to accomplish an overall goal for the subsystem. Common examples of subsystems are departments, programs, projects, teams, processes to produce products or services, eta. Organizations are made up of people -- who are also systems of systems of systems -- and on it goes. Subsystems are organized in an hierarchy needed to accomplish the overall goal of the overall system.

The organizational system is defined by, e.g., its legal documents (articles of incorporation, by laws, roles of officers, eta.), mission, goals and strategies, policies and procedures, operating manuals, eta. The organization is depicted by its organizational charts, job descriptions, marketing materials, eta. The organizational system is also maintained or controlled by policies and procedures, budgets, information management systems, quality management systems, performance review systems, eta.

Standard Planning Process is Similar to Working Backwards Through the System

Remember how systems have input, processes, outputs and outcomes? One of the common ways that people manage systems is to work backwards from what they want the system to produce. This process is essentially the same as the overall, standard, basic planning process. This process typically includes:
a) Establishing overall goals (it's best if goals are defined in measurable terms, so they usually are in terms of outputs) (the overall impacts of goals are outcomes, a term increasingly used in nonprofits)
b) Associating smaller goals or objectives (or outputs?) along the way to each goal
c) Designing strategies/methods (or processes) to meet the goals and objectives
d) Identifying what resources (or inputs) are needed, including who will implement the methods and by when.

Methods to the Madness: Systems Theory and Chaos Theory (Optional Reading)

NOTE: A person need not understand systems or chaos theory to start and run an organization. A basic understanding, though, sure helps when dealing with the many kinds of typical issues that face members of organizations. Information at the following link is geared to give the reader a taste of what systems theory is about, and then refer the reader to more information if they are interested.
Thinking About Organizations as Systems

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For the Category of Organizational Development:

Related Library Topics

Recommended Books

Managing Organizational Change

Growing Your Organization

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Managing Organizational Change

The following books are recommended because of their highly practical nature and often because they include a wide range of information about this Library topic. To get more information about each book, just hover your cursor over the image of the book. A "bubble" of information will be displayed. You can click on the title of the book in that bubble to get more information, too.

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Growing Your Organization

The following books are recommended because of their highly practical nature and often because they include a wide range of information about this Library topic. To get more information about each book, just hover your cursor over the image of the book. A "bubble" of information will be displayed. You can click on the title of the book in that bubble to get more information, too.

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Also See

Capacity Building (Nonprofit) -- Recommended Books

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