Definition and Importance of an organization

Organization is the task of mobilizing resources. It is a structure involving a large number of people engaging themselves in a multiplicity of tasks, a systematic and rational relationship with authority and resposibility between individuals and groups.

It involves dividing the entire work into manageable units, departmentation, decentralization, delegation and span of control.

Definition of Organization

Louis A. Allen defined that “Organization is a mechanism or structure that enables living things to work effectively together. The evolution of all forms of life and of human society demonstrates the need for organisation.”

Oliver Sheldon defined that Organization is the process of combining the work which individuals or groups have to perform with facilities necessary for its execution that the duties so perfomred provide the best channels for efficient, systematic, positive and coordinated application of available effort.”

Barnard observed that “Organization is a system of consciously coordinated activities or forces of two or more persons.”

Koontz and O’Donnell also defined that Organization is the establishment of authority and relationships with provision for coordination between them, both vertically and horizontally in the enterprise structure.”

Steps In organization

Once the necessary plans and objectives are formulated, the organizational process can be started. Every type of activity has to be grouped into workable units of similar activities.

The logical steps in the process of organisation are as follows:

  • Determine and formulate objectives, strategies, plans and policies.
  • Determine the activities involved to accomplish the objectives.
  • Grouping of similar activities into tasks, sections and departments.
  • Define resonsibility and accountability for every person.
  • Delegate the required authority to perform the task.
  • Integration of activites through authority relationships and communication networks.
  • Provide adequate physical facilities to perform the tasks effectively.

Importance of Organization

Organization is the backbone of the management; it helps the enterprise in its progress and prosperity. Today, organisation has become more important than ever before because of the many advantages it offers to the modern day complex society.

1. Encourages specialization

Specialization is the direct result of enterprise, which helps in increasing the productivity and efficiency.

2. Eliminates the problem of duplicating and overlapping

Proper and clear division and delegation of authority and responsibility avoid duplication and overlapping.

3. Brings order and cohesiveness

Determining a clear line of authority will bring in order in the concern. Everything in its place and a place for everything can be intorduced by organizing the concern.

4. Improves administration

Administrative policies and day-to-day operation of the enterprise will become effective and functional with proper organization.

5. Stimulates creative thinking

A good enterprise provides maximum opportunity for creative people to develop their ideas for the benefit of the concern. It also provides the ways and means of doing things in a better way.

6. Facilitates effective communication

With the clear definition of authority, an organization can develop the most efficient channels of communication.

7. Helps in providing a balanced emphasis on various activities

Organisation, by clearly defining the importance of activities through divisions, deparmentation etc., gives more priority for urgent and important problems.

Routine problems can be decided at the lower or middle level. Managing change, managing crisis, managinig credibility become easy through proper organization.

8. Helps to build up and expand the enterprise

An organized enterprise can build up a team od executives and workers who can develop much faster. Organized team effort helps in expanding the firm. Today, every organization is expanding the firm.

9. Helps in the smooth delegation of authority

When executives delegate authority downwards, that can get the things done smoothly. It also helps in fixing responsibility for task. A good organisation clearly defines the authority responsibility and relationship.


At last words, Organization is the structure and process by which a cooperative group of human beings allocates its tasks among its members, identifies relationships and integrates its activites towards common objectives.

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