Types of organisation

The basic types of organisation are:

• formal organisation which has complex, normative action and behaviour patterns specific to organization members connected with official procedures, division of labour, hierarchic system and communication methods. Features: official, impersonal, hierarchic, functional specialization, formalization.
• informal organisation is mostly build from personal and social relationships which will not be determine by regulations or status. Features: action flexibility, direct contact, unlimited duration.

Organizations can also be divided into:

• voluntary organisations - people can voluntarily join or leave them, for instance: foundations, committees, associations,
• compulsory organisations - separate their members form the society and strictly control adherence to specific behaviour, for instance: prisoners, patients of mental hospitals, soldiers,
• utilitarian organisations - people join its hierarchic structure because of certain intentions or the future profits which may receive, for instance: companies, education systems, trade unions.

Organisation as a system

Organisation is the system made up of people and technical resources, materials, whose interaction is characterized by:

• presence of clearly defined goals of the system,
• correspondence between the structure and functions of the system,
• interdependence of the system and its environment,
• interdependence between system elements,
• autonomy to decide and direct own actions.

The term "organization" comes from Greek word organizo which means to create the harmonious and orderly whole. The organization is formed and developed by people who cooperate in order to achieve established goals. The basic organization components are: people, aims and resources. Organizations with help of employees (people) try to accomplish specific aims, using various resources (strengths and weaknesses of the organization). The organization as specific system, operates in certain environment.

Meaning of the term organisation

• As an attribute - special kind of relationship between various elements to each other and to a whole, based on the fact that all parts acts to achieve goals of a whole,
• As a thing - concrete object having above mentioned attributes (e.g. team of people, company, research institute),
• As a function - activity based on the ability to select, acquire and transform various resources and organizational units themselves towards achieving particular goal.

Characteristics of organisations

Each organization has:

• common aim specific for whole organization and its employees,
• border which separates organization from surroundings,
• leadership which regulates relationships between members and organization structure,
• organizational culture - values, standards and rules which regulate organization members behaviour, for instance: joining, participation and leaving the organization,
• organizational structure - internal system and arrangement of organization components,
• cooperation between certain organization members and organization components for achieving goals.

Above mentioned features determine type of organisation and dependencies between elements of complex organizational system.

See also:

• Principles and features of organizational structure
• Divisional structure

Examples of Types of organisation

1. Private Sector:

• Sole Proprietorship: A sole proprietorship is a business that is owned and operated by one individual, making them the sole decision-maker for their business. An example of a sole proprietorship is a small retail store owned and operated by a single individual.
• Partnership: A partnership is an arrangement where two or more individuals or organizations join together to form a business. Partners share in the profits and losses of the business and have equal rights to make decisions. An example of a partnership is a law firm owned and operated by two attorneys.
• Corporation: A corporation is a business that is established as a separate legal entity from its owners. Owners of a corporation are referred to as shareholders and they have limited liability for the debts and obligations of the business. An example of a corporation is a large publicly-traded company, such as Apple or Microsoft.

1. Public Sector:

• Government Agency: A government agency is an organization that is funded and operated by a government. Government agencies are responsible for carrying out the functions of the government and providing services to the public. An example of a government agency is the United States Department of Labor.
• Non-profit Organization: A non-profit organization is an organization that is established for a purpose other than making a profit. Non-profit organizations are typically focused on providing services to the public and are funded through donations, grants, and other forms of fundraising. An example of a non-profit organization is the American Red Cross.

Advantages of Types of organisation

An introduction to the types of organisations:

Organisations come in a variety of structures, which may be determined by the legal and operational requirements of the company. Here are the four basic types of organisation and their advantages.

1. Sole Proprietorship:*This type of organisation is owned and operated by one person, and it is relatively easy to set up and maintain, as well as providing the owner with full control over the business.
2. Partnership:*This form of organisation allows two or more people to own a business together, and it helps to share the financial and operational burdens of the business.
3. Limited Liability Company (LLC):*This type of organisation is a hybrid between a partnership and a corporation, and it combines the limited personal liability of a corporation with the flexibility of a partnership.
4. Corporation:*This type of organisation is owned by shareholders, and it offers limited personal liability protection for the owners, as well as offering the potential for growth and expansion.

Overall, each type of organisation has its own advantages, and the best option for a particular business depends on its structure and the needs of the owners.

Limitations of Types of organisation

An introduction to the basic types of organization would include sole proprietorship, partnerships, corporations, and limited liability companies. Each of these organizations has its own unique set of limitations that must be taken into account when deciding which type of organization to form. The following are some of the limitations associated with each type of organization:

• Sole proprietorship: This type of organization is limited to one individual and cannot grow beyond the financial and managerial capabilities of the sole proprietor.
• Partnerships: Partnerships are limited to two or more individuals, and any decision-making within the organization must be agreed upon by all partners.
• Corporations: Corporations are limited by share issuance and the financial resources available to them.
• Limited liability companies: Limited liability companies are limited by the amount of capital they can raise and the number of members they can have.

Other approaches related to Types of organisation

Introduction: Below are some of the other approaches related to types of organisation:

• Hierarchical Structure: This is a type of organisation where individuals are arranged in a hierarchical order of power, authority, and responsibility. It is a pyramid structure with the most powerful individual at the top and the least powerful individual at the bottom.
• Flat Structure: This is a structure where all individuals have equal authority and responsibility. The lines of communication are short and the decision-making processes are simpler.
• Matrix Structure: This is a structure where individuals are grouped into teams based on their skill sets, roles, and functions. This type of structure facilitates collaboration and allows for cross-functional teams to work together on a project.
• Network Structure: This is a type of organisation where individuals are grouped together in an informal network. The individuals in the network can be in different locations and working for different organisations.

Summary: Types of organisation include the hierarchical structure, flat structure, matrix structure, and network structure. These structures all have their own advantages and disadvantages and can be used to create efficient and effective organisations.

Types of organisation — recommended articles

Principles of organization of public sector entities — Characteristics of organization — Principles and features of organizational structure — Characteristics of bureaucracy — Bureaucratization — Large organizations — Anglo-Saxon model of corporate governance — Management company — Virtual structure

References

• Barnard, C. I., & Thompson, K. (2003). Organization and management: Selected papers (Vol. 7). Psychology Press.
• Garvin, D. A. (1998). The processes of organization and management. MIT Sloan Management Review, 39(4), 33.
• Kast, R. E., & Rosenzweig, J. E. (1974). Organization and management. New York.
• Likert, R. (1967). The human organization: its management and values.
• Milgrom, P., & Roberts, J. (1992). Organization and management. Englewood Cliffs.

Author: Krzysztof Wozniak