First comes thought; then organization of that thought, into ideas and plans; then transformation of those plans into reality. The beginning, as you will observe, is in your imagination.

Napoleon Hill

Organization and administration are two sides of a single coin known as governance. It has been rightly said, “Organization is the basic tool by means of which the administrative process is kept operating.” The word ‘Organization’ is derived from the word ‘organicism’ meaning an organized body of various interdependent parts who sharing a common activity. Organization in every human group is for the attainment of a common purpose or goal. Organization refers to a system which is planned and has a co-operative effort on the part of every member. Every member in organization is required to fulfill duties and tasks.

These duties are planned to perform. A quote observes “Organization is the formal structure of authority through which work sub-divisions are arranged, defined and co-ordinated for the defined objective”. Organization is directly related to various patterns of relationships between the persons in an enterprise. This pattern helps in completing the goals of the enterprise.

Piffner Aptly remarks, “Organization consists of the relationship of individual to individuals and group to group which are so related to bring about an overly division of labor. Organization is the arrangement of personnel for facilitating the accomplishment of agreed purpose through allocation of functions and responsibilities. Organization is a system of consciously co-ordination activities of two or more persons. Organization is the relating of efforts and capacities of individual and group engaged upon a common task in such a way as to secure a desired objective with the least friction and the most satisfaction for whom the task is done and those engaged in an enterprises.’’ The term organization means different things to different people. Everyone has his own interpretation in this regard. The three explanations which are given mostly include: –

  1. Designing administrative structure.
  2. Both building and designing administrative structure.
  3. Developing administrative structure.

These three interpretations develop the mechanistic view but they do not highlight the human relationships present there. This is only the structural view not the informal view of organization. In simple words, organization includes both structural elements and human relationships.

Both these elements are complementary in nature.

Elements of Organization

Organization is said to be composed of three primary elements: –

  1. Persons
  2. Combined efforts
  3. Common purpose

Thus, an anonymous quote observes, “the elements of organization are common purpose communication and willing to serve.”  

Functions of an organization

The major functions of an organization are said to be: –

  1. Dividing work load among  members and employees
  2. Focusing on communication system.
  3. Standard practicing formulas.
  4. Decision transfer in hierarchical manner.
  5. Getting feedback
  6. Training of members
  7. Putting best policy forward
  8. Working for betterment of an enterprise.

To conclude, in the words of Orison Swett Marden, “A good system shortens the road to the goal”. Thus, organization is the key to achievement of goal in a firm.

“Focus on a few key objectives … I only have three things to do. I have to choose the right people, allocate the right number of dollars, and transmit ideas from one division to another with the speed of light. So I’m really in the business of being the gatekeeper and the transmitter of ideas…..  An organization’s ability to learn, and translate that learning into action

— Jack Welch


Bases of organization –




Organization has various different bases of organization.

Among these following include: –

  1. Purpose – The main function of an organisation is to be considered. Among these include the following: –
  1. Defence Department
  2. Health Department
  3. Labour Department
  4. Human Resource and development department.


‘’We can create the ultimate job security by becoming less dependent on the organization for which we work and more dependent on our own resources.’’

Bo Bennett


The merits of organization and enterprise on the basis of purpose/function are as follows: –

  1. It gives a mission to an organisation which is coherent in structure.
  2. It helps in eliminating the overlapping of work schedule.
  3. Work duplication is also reduced.
  4. Co-ordinated policies are developed by this process of organising an enterprise.
  5. It also helps in enabling the responsibility fixation in case of policy failures.
  6. It is easily going with the common goals of an organisation.
  7. It is also considered to be one of the best ways for organising an enterprise.

However, as per two sides there are some demerits of this process of organizing an enterprise. This includes the following: –

  1. It does not pay attention to the subordinate work schedule.
  2. It ignores latest technology in the field.
  3. The thinking is also divided into departmental logic.

The second process of organizing an enterprise include: –

2) Process – When an enterprise is based on the technique or skills (especially specialized one) than such organization are known as process based organization. These may include the following as: –

  1. Space Department
  2. Law Department
  3. Ocean Department
  4. Electronics Department


‘’Even though worker capacity and motivation are destroyed when leaders choose power over productivity, it appears that bosses would rather be in control than have the organization work well…. Organizations are now confronted with two sources of change: the traditional type that is initiated and managed; and external changes over which no one has control.’’

Margaret J. Wheatley


The merits of these organizations are as follows: –

  1. Emphasis on maximum specialisation in this process is laid.
  2. Up to date skill is utilised to full extent in this process.
  3. Economy is benefitted because of using labour and time saving techniques.
  4. It also encourages various co-ordination techniques.
  5. The main focus is on technical and skilled work here.
  6. Career oriented goals also become important in this regard.

The demerits of this process include following: –

  1. Limited in use as non-technical activities are neglected.
  2. Means are focused final output or ends are not given the desired importance.
  3. Professional arrogance is increased in an individual.
  4. This arrogance may lead to conflicts in mind of an individual.
  5. General administrators are ignored in this regard.

Another basis of organization is person based organization person

3) Person – Another basis of an organization in person based organization. This refers to the group of people (also known as clientele) who are served by an organization. These may have the following: –

  1. Rehabilitation department
  2. Tribal welfare department
  3. Women welfare department


“Business, labor and civil society organizations have skills and resources that are vital in helping to build a more robust global community.”

Kofi Annan

The chief merits of this process are: –

  1. They fulfil the needs of a group.
  2. They are responsible for all the required needs of the group.
  3. If ease out the co-ordination of various services provided by the beneficiaries.
  4. It also explains the relationship between the group targeted and organisation.
  5. A holistic approach is also given to the problem and it’s provided solution.

The major disadvantages of this process include: –

  1. Various small departments are created by disintegrating a big department.
  2. Some disputes are created between departments some of them may have jurisdictional approach.
  3. Specialisation is neglected on the basis of multi-functional characters.
  4. Organisation may become prove to pressure group influences.

Another major basis of evolving an organization include: –

4) This organization is based on the chief place or territory covered by an organization. The chief ones among them are: –

  1. External affairs department
  2. Territorial divisions in various departments.
  3. Damodar Valley Corporation etc.


‘’The trouble with organizing a thing is that pretty soon folks get to paying more attention to the organization than to what they’re organized for.’’

Laura Ingalls Wilder


The major merits in this regard are: –

  1. Co-ordination of various services in a fixed and specified area.
  2. Adaptation of national policies with regard to area is also considered in this principle.
  3. It is most suited for places with a long distance. Place which are vulnerable to communication difficulties work in this principle regard.
  4. Economy is benefited as travel expenses and cost in communication is curbed.

The demerits of this process include the following: –

  1. Uniform administration is not practiced here.
  2. National policies are not followed in equal way here as Regional disparities crop up.
  3. It also penetrates in fostering local benefits and neglecting national benefits and solidarity.
  4. Principle of specialisation is also considerably neglected various multi functional characters of an enterprise.
  5. Improper influences of regional interest and pressure groups are able to make an enterprise weak in this process.


“The productivity of a work group seems to depend on how the group members see their own goals in relation to the goals of the organization.”

Ken Blanchard 


In simple words, without organization an enterprise could not succeed in its goals. Therefore, organization is a vital part of administration.