What is an Organization?

As with any academic endeavor, one must understand the subject matter before delving into its specifics and intricacies. For this reason, this section will begin by defining the term “organization” and then examine three different ways of categorizing various types of organizations.

What Is an Organization?

An organization is more than just a collection of desks, computers, or people. It’s a structured system of individuals working together to achieve shared goals. Jason Wrench defines an organization as a group of people who communicate with one another to reach common goals. These goals might be financial, service-oriented, informational, or aimed at the public good. However, regardless of their type, organizations rely on systems of communication, structure, and personnel to function effectively.

After reading this laundry list of definitions for the word “organization,” you may wonder how to determine which one is the best. We think they all have something to offer. When examining the various definitions for “organization,” a specific pattern of consistent themes emerges within the definitions.

Organizations as Systems: Inputs, Throughputs, Outputs

Organizations can be understood through a systems perspective, which views them as dynamic processes comprising four core components: external environment, input, throughput, and output.

External Environment

This includes vendors, customers, competitors, regulatory bodies, and any other entities that influence or are influenced by the organization. Organizations interact with their environment in either open or closed ways. Open boundaries allow information and resources to flow in and out freely. Closed boundaries attempt to insulate the organization, which can lead to obsolescence.

Input

Organizations rely on inputs to function. These typically fall into three categories:

• Physical materials (e.g., equipment, supplies)
• People (e.g., employees, volunteers)
• Information (e.g., market research, regulations)

Organizations gather this information either proactively or reactively. Proactive scanning involves actively seeking data (e.g., monitoring competitors), while reactive scanning happens in response to crises.

Throughput

Throughput refers to the rate at which organizations process inputs internally. This includes communication flow, decision-making structures, and task coordination.

Output

Every organization produces a product, service, or knowledge it delivers to the external environment. Even nonprofit organizations have outputs, such as public awareness campaigns or emergency services.

Organizational Goals: Why Organizations Exist

Edward Gross (1969) categorized organizational goals into five types:

• Output Goals: The tangible products or services an organization provides.
• Adaptation Goals: How well an organization adjusts to its changing environment.
• Management Goals: Decisions about leadership, conflict resolution, and prioritizing outputs.
• Motivation Goals: How organizations inspire their people to contribute.
• Positional Goals: How an organization positions itself relative to competitors (e.g., luxury vs. mass-market brands).

These goals shape internal communication, culture, and external strategies. For instance, an organization focused on adaptation may encourage experimentation and feedback more than one that is solely focused on output.

Output Goals

The first type of goal that organizations commonly have is referred to as output goals, or organizational goals that are “reflected, immediately or in the future, in some product, service, skill or orientation which will affect (and is intended to affect) that society” (Gross, 1969). While Gross initially discussed goals in terms of educational organizations, these goals also apply to other types of organizations. Every organization has output goals that will be released into the external environment. For a pizza chain, the output goals could be the pizza it delivers to your house (product), the customer service it gives customers (service), or the expertise in pizza making it brings to the enterprise (skill).

Adaptation Goals

Adaptation goals are goals that an organization has in adapting to the external environment. All organizations operate in changing environments, and successful organizations must change and adapt to meet the demands of that external environment. One of the most significant risks many organizations face if they do not adjust to the external environment is obsolescence, which “occurs when there is a significant decline in customer desire for an organization’s products or services” (Wrench, 2012). Many organizations become so focused on producing a specific product that it eventually becomes no longer wanted or needed by customers, ultimately leading to the organization’s demise.

Management Goals

The next type of organizational goal discussed by Edward Gross is management goals, which involve three types of decisions: (1) who will manage or run an organization, (2) how to handle conflict management, and (3) output goal prioritization.

First, organizations need to decide on their formal structure and who will occupy various hierarchy levels. In addition to determining the formal structure, these goals also determine the type of power and who holds it within the organizational hierarchy. Second, managerial goals focus on how conflicts within the organization will be addressed and managed. Organizations have a vested interest in keeping the organization running smoothly, so excessive strife can lead to interpersonal or interdepartmental bickering with negative consequences. Lastly, management goals determine the organization’s overarching direction. As the saying goes, someone has to steer the ship. We’ll discuss different types of leaders later in this textbook. Still, for now, we’ll note that having a clear direction and clear prioritization of an organization’s products and services is very important for the health of an organization. If an organization tries to do too much, it may end up scatterbrained and not function as a cohesive whole. If an organization attempts to do only one thing, it may become obsolete. Overall, people in management must prioritize output goals very highly on the to-do list.

Positional Goals

The final type of organizational goal described by Edward Gross is positional goals, which aim to position an organization within its environment relative to other organizations within the same market. For example, imagine that your organization is an automotive tool manufacturer. Your organization will strive to differentiate itself from other automotive tool manufacturers in the market. There are two common ways to position oneself within a specific market: 1) higher volume at a lower price or 2) higher quality at a higher price. The first way to position oneself within a market is to create more products or faster service at a cheaper cost. The second way to position oneself in the market is to create a luxury product/service that is more expensive. While the product or service costs more, you appear to be a luxury brand.

In a 2011 article in PCWorld, the authors mention that 56% of new cellphone users purchased an Android device compared to only 28% who bought an iOS (iPhone) device. Android is more affordable, and a wider range of Android versions is available for cellphone subscribers. Only Apple makes iOS-compatible cellphones, which are typically more expensive than those compatible with Android devices. Apple has historically positioned itself as a luxury brand in the computing industry, while PCs and Android smartphones are generally more affordable and designed for the mass market. Interestingly, iPhones accounted for only 4% of the overall cell phone market in November 2011, yet generated 52% of industry profits. The iPhone may not be capturing a substantial market share, but it is still outperforming its competition.

Organizational People

The final characteristic common to the various definitions of “organization” involves people. In Jason Wrench’s original discussion of the three common themes related to people, he discussed interdependency, interaction, and leadership. For our purposes, we also pose the notion of control as an essential factor related to people.

Interdependency

The first term associated with people in organizations is the concept of interdependency. Interdependency is mutual dependence or dependence on one another. Interdependency is the concept that individuals within an organization rely on one another to achieve the organization’s objectives. If one part of the organization stops functioning correctly, it will impact the others. For example, imagine you are a copyeditor for a publisher in New York City. If you get behind on your job, the graphic designers, marketing professionals, printers, and others will also get behind. At the same time, interdependency can also help an organization. If you’re working with a solid group of colleagues, if something happens to get you behind, others can help pick up the slack and keep things moving forward on schedule. Overall, people have a significant impact on one another in organizations.

Interaction

Our interactions with others help define and create what an organization is. Without our interactions with coworkers, customers, and other stakeholders, an organization would not exist. For this reason, you can almost say that the “thing” we call an organization doesn’t exist because it’s not a physical structure. Still, an organization is the outcome of our interactions with others. An organization may have physical things within it (desks, computers, pencils, etc.), but the actual organization is ultimately the people who make it exist. At the same time, people within an organization also interact with each other in various roles to accomplish the organization’s goal(s). People within organizations and those who come into contact with them are constantly engaged in interaction.

Control

As Dennis Mumby’s definition of an organization states, organizations are inherently entities that must control the behavior of their members while members generally strive for their own needs. When one group has one set of needs and desires and another has a different set of needs and desires, we refer to these groups as being in dialectical tension. Table 2.2 contains many of the dialectical tensions between organizations and their members.

Because of these inherent dialectical tensions, organizations attempt to stack the deck in their favor to maximize their own needs and desires while minimizing those of workers. Let’s briefly examine each of these dialectical tensions.

Minimize Costs vs. Maximize Salary/Benefits. The first dialectical tension occurs when organizations try to keep their overhead costs low. In contrast, workers strive to maximize their earnings, including salary and benefits (such as insurance, stock options, and retirement plans).

Systemization vs. Autonomy. Organizations prefer stability, so they look for workers who learn how to perform a specific task and then systematize it as efficiently as possible. As such, organizations (especially in manufacturing contexts) will train employees in explicit detail on exactly how to accomplish a task. On the other hand, workers prefer to have autonomy when deciding how best to perform their daily work and do not enjoy being micromanaged.

Streamline vs. Stability. Organizations are primarily focused on the bottom line and, therefore, often seek the ability to streamline their operations to maximize profits. If an organization can lay off workers and maintain maximum productivity, it’s usually in its best interest. While streamlining suits an organization, it can create a chaotic environment for employees seeking job stability. Workers want to know that their work is appreciated, and it will keep them motivated and employed.

Agreement vs. Dissent. The next dialectical tension listed here is the one between agreement and dissent. In this context, organizations often prefer that workers blindly follow and do as organizational leaders dictate. On the other hand, workers want to have a voice to express their disagreement with the dictates of leaders or the organization’s general direction.

Conventionality vs. Innovation. Organizations are innately slow-moving organisms that do not like change, so it’s common to hear “But we’ve always done it that way.” On the other hand, workers want to bring their creative problem-solving skills to the table and think of new and innovative processes and procedures that could benefit both the organizations and the workers. While not all worker ideas are spot-on, organizations that stick to conventional thinking may lose many employees who prefer more freedom to be innovative.

Transparency vs. Privacy. Today, organizations are increasingly interested in knowing what their workers are doing. As such, organizations expect that employees’ work lives are entirely transparent and will do everything from monitoring e-mail and telephone calls to installing software on workers’ computers that logs and monitors keystrokes on a keyboard. On the other hand, workers are increasingly demanding privacy, especially in their digital lives.

Organization vs. Self-Focused. Organizations innately want workers to be focused on their jobs and improving their productivity. Workers, on the other hand, want to focus on themselves and improve themselves. Many organizations will support self-improvement as long as it has a clear benefit. Still, workers often want to focus on their improvement, even if that improvement has no benefits for the organization or may lead the worker to seek a new one.

Permanence vs. Change. When examining the permanence/change dialectic, organizations strive to maintain knowledge and thus retain hardworking individuals for the long term. Often, organizations refer to this as employee loyalty. On the other hand, workers frequently desire change and can become bored with performing the same tasks daily. Usually, workers become pigeonhole in specific jobs with specific duties, and there is no way to get out besides leaving the organization. Overall, organizations in our society have many more tools at their disposal to get their way than workers.

Organizational vs. Individual Rights. Ultimately, when it comes to organizations, the focus is on the organization and its rights, and less on the individual’s rights. Workers believe their human rights shouldn’t stop at the organization’s front door. For example, many workers are shocked when organizations fire them for posts on social networking websites. Workers believe these posts should be private, and organizations looking at these posts are a violation of one’s privacy rights. On the other hand, organizations believe that looking at social networking site posts is an entirely appropriate behavior and is well within their rights as an organization. While this specific example also overlaps with the transparency/privacy dialectic, the focus here is on whose rights are more important.

Work vs. Social Life. The last dialectical tension associated with organizational control is the balance between work and social life. Organizations believe that workers should be focused purely on their work life. As a result of digital technology, it has become increasingly easier for people to be on call 24/7 by their organizations. On the other hand, workers believe they are entitled to a social life that is separate from their organization. Furthermore, workers often think that if their private social life behavior does not impact their work life, their organizations should stay out of their personal lives. Many organizations go so far as to include “morality clauses” in contracts that enable them to fire employees whose personal behavior is deemed inappropriate for organizational members.

Leadership

The last term associated with people in organizations is leadership. Any organization must have an individual or discernible group that guides the organization toward accomplishing its goal(s). Without strong leadership, individual members of an organization are left to their own devices in terms of achieving the organization’s goals. If you have too many people trying to lead, you’ll end up with an organization stretched entirely too thin to accomplish anything. The opposite of leadership is followership. If an organization is to thrive, it must have strong leadership and followers willing to follow that leader.

Types of Organizations

Blau and Scott (1962) outlined four major types of organizations, based on who they primarily serve:

1. Mutual Benefit Associations – Serve their members (e.g., unions, clubs)
2. Business Concerns – Focus on profit and efficiency (e.g., corporations)
3. Service Organizations – Provide a direct service to the public (e.g., schools, hospitals)
4. Commonwealth Organizations – Benefit society as a whole (e.g., military, public safety)

Each type of organization has different communication needs and challenges. For example, a service organization may need to communicate empathy and clarity, while a business concern might prioritize efficiency and cost-effectiveness.

Mutual Benefit Associations

The first type of organization is the mutual benefit organization, which is focused on providing for its membership. Some examples are “political parties, unions, fraternal associations, clubs, veterans’ organizations, professional associations, and religious sects” (Blau & Scott, 1962, p. 45). People generally join these types of organizations because of the benefits of membership. When these organizations are first established, organizational members are typically highly involved. However, once one of these organizations has been established, most members become passive and allow the minority to run the organization.

Business Concerns

The second type of organization is the business concerns organization, which focuses on doing well for the organization. According to Blau and Scott, the “dominant problem of business concerns is operating efficiency—achieving maximum gain at minimum cost to further survival and growth in competition with other organizations” (1962, p. 49). Most for-profit organizations fall into the category of business concerns. Business concerns organizations face problems associated with “maximizing operating efficiency in a competitive situation” (Blau & Scott, 1962, p. 43). Due to the need to cut costs and maintain a competitive advantage, these organizations often appear cold and callous in their treatment of members and customers.

Service Organizations

According to Blau and Scott (1962), service organizations are “ones whose prime beneficiary is the part of the public in direct contact with the organization, with whom and on whom its members work—in short, an organization whose basic function is to serve clients” (p. 51).  Service organizations can include “social-work agencies, hospitals, schools, legal aid societies, and mental health clinics” (Blau & Scott, 1962, p. 51). The basic problem service organizations face is “the problems associated with the conflict between professional service to clients and administrative procedures are characteristic of service organizations” (Blau, & Scott, 1962, p. 43). Often, service organizations are steeped in organizational hierarchies and procedures that prohibit providing the easiest and fastest service to potential clients.

Commonwealth

The last type of organization discussed by Blau and Scott is commonwealth organizations, “where the prime beneficiary is the public-at-large” (1962, p. 44). Some examples of commonwealth organizations include “the State Department, the Bureau of Internal Revenue, military services, police and fire departments, and also the research function as distinguished from the teaching function in universities” (Blau & Scott, 1962, p. 54). All of these organizations were created because they represented areas where the general public needed some level of protection or knowledge, or the organization serves administrative purposes of the government. Overall, the crucial problem that commonwealth organizations pose is the development of democratic mechanisms that allow them to be externally controlled by the public (Blau & Scott, 1962, p. 43).