Organization refers to a collection of people, who are involved in pursuing defined objectives. It can be understood as a social system which comprises all formal human relationships. The organization encompasses division of work among employees and alignment of tasks towards the ultimate goal of the company.
It can also be referred as the second most important managerial function, that coordinates the work of employees, procures resources and combines the two, in pursuance of company’s goals.
1. Static concept
Under static concept the term ‘organisation’ is used as a structure, an entity or a network of specified relationship. In this sense, organisation is a group of people bound together in a formal relationship to achieve common objectives. It lays emphasis on position and not on individuals.
2. Dynamic Concept:
Under dynamic concept, the term ‘organisation’ is used as a process of an on-going activity. In this sense, organisation is a process of organising work, people and the systems. It is concerned with the process of determining activities which may be necessary for achieving an objective and arranging them in suitable groups so as to be assigned to individuals. It considers organisation as an open adoptive system and not as a closed system. Dynamic concept lays emphasis on individuals and considers organisation as a continuous process.
Organization is a goal oriented process, which aims at achieving them, through proper planning and coordination between activities. It relies on the principle of division of work and set up authority-responisbility relationship among the members of the organization.
The organization structure is a basic idea, which depends on the activity authority relationship in the company. It is designed in such a way to realise business objectives.