General Concept
From the Greek "organon" which means instrument, utensil, organ or that with which one works, Organization is understood as a social entity formed by two or more people who work in a coordinated way, in a certain external environment, aiming at a collective objective involving the division of tasks and assignment of responsibilities.
Depending on the type of Organization, there is one or a group of people who play a key role in the functions of leadership, planning and control of resources: human, material, financial and technological. These are constantly changing structures, living social organisms.
The existence and survival of the Organization depends on how it relates to its surroundings. As such, the Organization must be structured and streamlined according to the conditions and circumstances within this environment.
Fundamental Concepts
Coordinated Action
An organization exists only when people organize, develop their actions in a coordinated way and controlled by a leader in order to achieve a goal.
Resources
All available and necessary means to carry out the Organization’s actions are: human capital, material, technological and financial resources.
Effective Affectation
The allocation of resources, whether by scarcity or by cost, must be effective and rationalized.
Objectives
These are the goals that the Organizations set themselves to achieve and that validate the activity of the Organization and its very existence.
Context
All the structures surrounding the Organization influence its performance in an indirect or direct manner.
Types of Organizations
The structure of an organization can be formal or informal. A formal organization is structured following internal rules. An informal organization is the spontaneously generated relationships between people, a result of the very functioning and evolution of the organization.
The great difference between the various types of Organization lies in the objectives it pursues, whether it is to maximize their value (business organizations) or to defend the interests of a particular group of people (non-business organizations - trade union associations).
Most common types of organizations:
Business organizations;
Religious organizations; o Government organizations; o Social or cultural organizations; o Non-profit organizations.
Environment
Nowadays an organization is more and more an open system to the outside, that is to say to the environment that surrounds it. The environment that surrounds it affects and conditions the functioning of the organization itself, but also Organizations (especially the larger ones) influence and affect the environment around them.
In an organization two types of environment coexist: the general and the specific.
General Surroundings
Cultural: ideologies, values, norms of society, relations between power and society, rationalism;
Technological: scientific and technological level;
Educational: general literacy level of the population, professional and technological specialization level;
Political: general political climate of the society, degree of concentration and level of authority of the political power, nature of the political organization, party political system.
Legal: nature of laws, form and organization of the judiciary, tax system; o Natural: nature, quantity and availability of natural resources, weather conditions; o Demographic: nature of human resources available to society, age pyramid of population, gender, concentration/urbanization of population;
Sociological: structure and mobility of classes, definition of the roles and representation of social actors, nature and level of development of social organizations.
Economic: economic structure of the society, including the type of economic Organisation (public, private or cooperative sector), financial and banking system; tax levels and tax system; market structure, level of investment in physical resources and intangibles, characteristics of consumption and consumer behaviour, openness of the economic system to the outside world, participation in regional economic blocs and international economic institutions.
With regard to the Specific Environments, the clients and users of the Organization, the suppliers, the competitors, the political-legal and the scientific-technological must be considered.
The Organizations: Aspects
Vision
The vision of an Organization comprises two main components: the central ideology and the visualization of the future.
The basic ideology understands the reason for existence, the visualization of the future is what the Organization aims to achieve and create.
Mission
The mission of an Organization corresponds to the role it plays in the market where it operates, according to a specific objective.
"A company is not defined by its name, status or the product it makes; it is defined by its mission. Only a clear definition of the mission is the reason for the Organization's existence and makes possible, clear and realistic the objectives of the company". Peter Drucker
Values / Principles
Principles are delimitations for the decision-making process and for the behavior of the Organization in the fulfillment of its Mission. They should be clearly and concisely drafted, comprehensive and reduced in number to facilitate their assimilation.
Objectives
Objectives are quantitative and qualitative results that the Organization needs to achieve within a given timeframe, in the context of its environment, in order to fulfil its Mission. They are consistent, feasible, challenging, measurable, clear, known and accredited by all members of the Organization.
Strategies
Is the decision of the action of the Organization, considering the environment, to achieve the objectives, respecting the values/principles and aiming at the fulfilment of the mission.
Innovation in Organizations
Modern management methods, developed to manage economic organizations, or companies, are also beginning to be applied to other types of organizations that are not aimed at profit and are concerned either with the objective, within the organization, of optimizing the use of resources (efficiency) or with the external objective of achieving the service ends and goals that are part of its social objective (effectiveness).
Thus, companies (due to the competitive pressure of profit), innovate in new management methods and tools and then these innovations are introduced in other organizations.
On the other hand, social concerns that once only existed in non-profit organizations are now increasingly being incorporated into companies in developed countries.
Thus, in today's world, Organizations do not only have the objective of profit, they have social responsibility towards society because if it exists it is because there is an implicit social contract between the Organization and society. It is the concept of Corporate Social Responsibility.
In this context, there is increasing convergence between companies and non-profit organizations in terms of management methods and social responsibility.
Strategic Planning
To formulate strategies is to design and select ways that lead to the achievement of Organizational objectives.
The purpose of Organizational Strategic Planning can be defined as the development of processes, techniques and administrative measures that provide a viable solution to assess the future implications of present decisions according to the business objectives that will facilitate future decision making in a faster, more coherent, efficient and effective manner.
Planning tends to reduce the uncertainty involved in the decision-making process and, consequently, increases the likelihood of achieving the objectives and challenges set for the Organization.