Features of Business Organizations

An organization is the association of persons for achieving certain objectives. An organization is a social system wherein its members try to achieve their private goals while achieving the organizational goals. The seemingly contradictory goals are resolved by effective organizational behavior.  The organization has some objectives which are attained by organizing the activities of their member. An organization for business purposes is commonly known as a corporate body or a corporation or a company or formally established business unit. It is dynamic and ever changing as per the needs of society, its members, corporate objectives and environmental changes. Men form and develop organizations because they are unable to achieve the desired goals individually. They evolve different forms of organization according to their needs. An organization is a composition of people having different authorities and responsibilities to utilize existing resources for achieving the organizational objectives.

Common Features of Business Organizations

An organization is just like a human body. The most common features of business organizations are; structure, processes, relationships, authority and responsibility, performance and behavior of individuals and groups.

1. Structure

An organization is a structure which is used to arm people with specific relations and authority. Within the structure, people work to achieve the desired objectives.  It is the skeleton around which an organization is built. Structure has a formal character.  It is an arrangement and formulated for grouping tasks, jobs, delegating authority, allocating responsibility and accountability, along with the number of persons involved in the managerial hierarchy and at the shop-floor level.  It helps management tasks to be done easily and smoothly through the identification of different tasks, grouping together of similar activities and assigning tasks to individuals.  The allocation, supervision and functions are essentially designed under organizational structure.  The formal relationship among persons working at different levels, well-defined authority and responsibility and individual actions and interactions are the bases of the structure of an organization. The structure concentrates on the division of work, specialization, coordination of work, job design, grouping of jobs and work allocation.  In practice, a flexible organizational framework is formulated so that at the time of need for development and growth, the basic structure need not be changed.  Mechanical system of organizational structure is not preferred to the organic system of structure.  The structure of framework of an organization should be adaptable, flexible, problem-solving and professional. The different levels or forms of structure must be interlinked in order to facilitate performing jobs effectively and efficiently. Structure in itself is not a solution.  It requires people and their related activities.  The structure should be framed considering the nature of the job and the characteristics of people who will use.  Structures are developed for people to work collectively, and not to fit individual personalities.

2. Process

An organization is an operation within the structure.  It is just like a body structure where the functions of each organ of the body are defined and specifically performed.  An organization like the human body is an ongoing process of structure.  It is a process of managerial function.  It aims at organizing work, arranging people and systems, developing technology, designing communication and providing an organizational climate. The organization is concerned with the organizing process, including the decision of the course of action, division of various activities, assignment of tasks to proper persons, delegation of authority and responsibility, coordination of the various tasks and the decisions of the management.  It is a means to an end and is a dynamic and adaptive process to coordinate a suitable process of management functions with the changing environment. The organizational process includes breaking up the entire work into different segments, assigning a definite role to each person, and coordinating and integrating the different functions to achieve the corporate objective with minimum effort and resources.  Many define organization as a process of division of labor and function, coordination through authority and responsibility and putting people at place to work.

3. Relationships

The organization sets up certain forms of relationship to enable workers to perform their jobs harmoniously. Relationships are defined and designed as per the needs of the organization. Functional relations are developed to perform the activities of the organization. An established relationship is useful for training and development of human resources. The organizational relationship is established on the basis of process, geography, department and product.  The relationship is developed in such a way that there is a scope of adaptability to the changing environment to avoid complacence, stagnation and inefficiency. An organization is a group wherein people work.  Therefore, person-to-person relationships need to be defined clearly. Superior-subordinate relations, the superior-superior relations and subordinate-subordinate relations are established for the smooth functioning of organizational activities. The group interaction model has direct impact on the motivation and productivity. The organizational structure presents the different types of relationships as a unified whole for achieving the common goal of the organization.  Hierarchical relationships bind persons operating at different levels of the organization for achieving the common goals of the organization.

4. Authority and Responsibility

The structural relationship becomes effective with the allocation of authority and responsibility.  Each cadre is specifically assigned the authority and responsibility for the tasks he has to perform.  Members of the cadre must know the rights and powers to be exercised to perform their duties.  The authority and responsibility is ultimately vested with the top management.  Since the Chief Executive cannot perform all the jobs, he has to decide what part of his work will be entrusted to his subordinates and what part of the job will be retained by him. Organizational structure has well-defined authority and responsibility, explicit or implicit.  Organizational rank and cadres are developed to delegate authority and responsibility, based on seniority, title, status and son on, to provide adequate administrative leverage.  This is done to ensure clear delineation of authority and responsibility.  In the absence of clear delineation, internal conflicts will develop.  Moreover, there should be enough scope for human relationships while delegating authority and responsibility. The organizational authority and responsibility have been exercised in different forms from the ‘herd’ concept to the ‘group’ concept from time to time.  The herd concept placed exclusive power with the leader and enforced unquestioning obedience on the subordinates.  Organizational evolution took the shape of the person-to-person concept thereafter, where the subordinate performs his functions in terms of a direct relationship with his superior.  It involves delegation of authority and responsibility from superior to subordinate.  The modern concept of organization believes in the development of mutual and hormonal relationships between subordinates and subordinates/and superior.

5. Performance

The organization, by its performance, tries to achieve synergistic results, which infers that the whole organization is greater than the sum of its parts. The organizational structure and process are designed to achieve the goals and objectives through effective performance which is possible with human resource development.  Organization development programs maximize work motivations and creativity.  Job enrichment, job enlargement and job satisfaction also come under organizational performance.  Specialization in particular is the core of an organization.  It helps in the effective performance of the job.  Discipline, unity of command, giving direction, scalar chain decentralization and coordination need to be properly exercised to achieve good job performance in an organization.

6. Behavior of Groups

An organization is a composition of people. The success of an organization depends upon the behavior of the people and the group.  Individual groups and structures are the bases of group behavior. Relationships on a person-to-person level and subordinate-to-subordinate as well as with the superior are established in a group.  Formal and informal organization helps in developing proper behavior of a group. Group behavior has given birth to team work which has been accepted as the most effective form of organization.  Team spirit, team performance, team rewards and team motivation have achieved new dimensions in big organizations in the beginning of the twenty-first century. The concept of family has been implanted into organizations. Groups in an organization have more effective behavior. They can achieve something more together than what they can achieve individually.

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