Organization

• 1. Introduction

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  An organization, spelled organisation in Commonwealth English, is a social entity that brings together one or more people around a particular purpose. The word travels a long way back. It comes from the French organisation, which grew out of the medieval Latin organizationem. The deepest root is the Greek word organon, meaning tool or instrument, a musical instrument, or an organ of the body. That single thread, the idea of an organization as a kind of instrument, runs through everything that follows. But the word covers far more than companies and charities. Some organizations operate in the open, registered and recognized. Others work in secret or outside the law. So what actually turns a loose cluster of people into an organization? Who governs the rules inside one? And why do humans, who spent prehistoric times preoccupied with personal survival, now spend most of their waking hours working for these structures? Those are the questions ahead.

• 2. What Counts As One

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  A company, a corporation, an institution, or an association can all qualify as an organization, provided it has people and a purpose. The boundaries get interesting at the edges. Secret societies, criminal organizations, and resistance movements all count, even when they operate secretly or illegally. Some organizations face obstacles thrown up by other organizations, as the source notes of Martin Luther King's organization.

  Recognition by a government does not happen by accident. One path is filling out incorporation. Another is recognition through societal pressure, the kind an advocacy group applies. A third comes from causing concerns, as a resistance movement does. A fourth is being treated as the spokesperson of a group, subject to negotiation. The Polisario Front offers a sharp example. It was recognized as the sole representative of the Sahrawi people and went on to form a partially recognized state.

  The scholar Jack Knight draws a finer line between organizations and institutions. He writes that organizations are a narrow version of institutions, or a cluster of institutions. The distinction matters because organizations contain internal institutions, the rules that govern how members interact with one another. Compare all this with the broader idea of social groups, which can include things that are not organizations at all.

• 3. The Legal Menagerie

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  Corporations sit on one end of a long list of legal types. The list keeps going: governments, non-governmental organizations, political organizations, international organizations, religious organizations, armed forces, charities, not-for-profit corporations, partnerships, cooperatives, and educational institutions.

  A hybrid organization breaks the usual public-or-private divide. It operates in both the public sector and the private sector at the same time, fulfilling public duties while developing commercial market activities.

  A voluntary association takes yet another shape. It consists of volunteers, and depending on the jurisdiction it may run without legal formalities at all. Informal clubs and coordinating bodies fall here. Such a group might state its goal in a mission statement, or leave it implicit in the actions it takes.

• 4. Four Shapes Of Power

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  Management science sorts most human organizations into roughly four types: committees or juries, ecologies, matrix organizations, and pyramids or hierarchies. Each one answers the same question differently, namely how a group decides and who answers to whom.

  Committees and juries are groups of peers who decide together, sometimes by voting. The difference is what happens after the decision. Committee members are usually assigned to carry out or lead further actions, while jury members simply reach a decision. In common law countries, legal juries render verdicts of guilt and liability and quantify damages. Juries also judge athletic contests and book awards. In the Middle Ages, juries in continental Europe were used to determine the law by consensus among local notables.

  Condorcet's jury theorem gives committees a mathematical backbone. It proved that if the average member votes better than a roll of dice, adding more members increases the number of correct majority decisions. The catch is brutal. If the average member is worse than a roll of dice, more members make the decisions worse, which is why staffing is crucial. To stop committees from talking forever without deciding, parliamentary procedure exists, such as Robert's Rules of Order.

  Ecologies turn an organization inward on itself. The structure promotes internal competition: inefficient components starve while effective ones get more work. Everybody is paid for what they actually do, running a tiny business that must show a profit or face firing. The source notes this reflects a one-sided view of real ecology, since natural ecoregions do not generally compete but stay autonomous. The pharmaceutical company GlaxoSmithKline has talked about functioning as this type of organization.

  Matrix organizations hand each worker two bosses in two different hierarchies. One direction is functional, ensuring each expert is well-trained and measured by a super-expert in the same field. The other is executive, focused on getting projects done. A worker handling quality control for project X answers along two reporting lines at once. The United States aerospace industries were the first to officially use this structure after it emerged in the early 1960s.

  Pyramids carry a built-in warning. The source compares a hierarchy to a real pyramid of stone blocks. Without enough blocks beneath, gravity brings the monument down, and a leader without the support of subordinates sees the whole structure collapse. The Peter Principle, a 1969 book, satirized hierarchies and introduced the idea of hierarchiology, along with the line that in a hierarchy every employee tends to rise to his level of incompetence.

• 5. The Scholars Disagree

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  Sociology, economics, political science, psychology, management, and organizational communication all claim organizations as an object of study. The broader field goes by several names: organizational structure, organizational studies, organizational behavior, or organization analysis. Three perspectives recur. A functional view focuses on how entities like businesses or state authorities are used. An institutional view treats an organization as a purposeful structure inside a social context. A process-related view sees an organization as something always being reorganized, a set of tasks or actions.

  Sociology has been called the science of the institutions of modernity, where specific institutions serve a function like the organs of a coherent body. It distinguishes planned formal organizations from unplanned informal ones that form spontaneously. In this institutional reading, an organization is an enduring arrangement of elements whose actions are set by rules, so a task can be done through coordinated division of labor.

  Economics starts from that same division of labor. Division allows specialization, specialization demands coordination, and markets and organizations become alternative coordination mechanisms for executing transactions. An organization can then be defined by its elements, its communication, its autonomy, and its rules of action against outside events. The payoff is solving tasks beyond any single element, with advantages like enhancement, addition, and extension. The price is real: limited degrees of freedom for the elements, plus disadvantages of inertness and loss of interaction.

  The theory shelf is crowded. Activity theory shaped Clodomir Santos de Morais's Organization Workshop method. Actor-network theory treats objects as part of social networks. Contingency theory claims there is no single best way to organize. The Garbage Can Model disconnects problems, solutions, and decision-makers from one another. Transaction cost theory holds that people organize production in firms when coordinating through the market costs more than coordinating within the firm. And looming over the formal side is Weber's Ideal of Bureaucracy, drawn from Max Weber's chapter on Bureaucracy in his book Economy and Society.

• 6. Authority Versus Influence

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  A leader in a formal hierarchy is appointed to a managerial position and given the right to command and enforce obedience by the authority of that position. That authority is only potentially available, though. The manager must possess personal attributes to match it. Without sufficient personal competence, a manager can be confronted by an emergent leader who challenges the role and reduces it to a figurehead. Yet only the authority of position carries the backing of formal sanctions. So whoever holds personal influence can legitimize it only by winning a formal position with matching authority.

  Weber's definition spells out how the formal organization behaves. It acts impersonally toward clients and members. Entry and advancement come by merit or seniority. Each employee draws a salary and enjoys a degree of tenure that shields him from the arbitrary influence of superiors or powerful clients. The higher the position, the greater the presumed expertise in solving problems from lower levels. This bureaucratic structure is what underpins appointing the heads of administrative subdivisions and giving them the authority attached to their posts.

• 7. The Shadow Structure

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  Beneath every formal structure runs an informal organization, and it answers to no appointment letter. It expresses the personal objectives and goals of individual members, which may or may not coincide with the goals of the formal organization. It is the spontaneous emergence of groups as ends in themselves, an extension of the social structures that characterize human life.

  In prehistoric times, man was preoccupied with personal security, maintenance, protection, and survival. Now he spends a major portion of his waking hours working for organizations. The need to identify with a community offering security, protection, and a feeling of belonging continues unchanged from those prehistoric times, and the informal organization meets it through its unofficial leaders.

  Emergent leaders attract followers through personal qualities, the demands of the situation, or some combination. Rather than authority of position, they wield influence or power. Influence is the ability to gain cooperation through persuasion or control over rewards. Power is the stronger form, since it reflects the ability to enforce action through control of a means of punishment.

  Scholars who study organization science have looked closely at how the two structures interact. One camp argues formal and informal organizations work as substitutes, since each reduces the advantages of the other. When parties trust each other, a formal contract becomes unnecessary or even detrimental to the relationship. Another camp argues they complement each other, where formal mechanisms of control can pave the way for relational norms to develop.