Organization is the foundation of structure of Management


Organization is defined as a group of people working in harmony to achieve a common objective or goal.

Most business managers will affirm that organization is the foundation upon which the whole structure of management is built and so, is highly important to business success. Something as important as this definitely needs to be understood in all its entirety. Does it mean the finding placing and developing of people within the structure or is it concerned with procedural aspects which guide managerial actions? If we are to hold a person responsible for the organizing function, the exact nature of work that is included in the concept of organization must be agreed upon.

What is organization?

The evolution of human society and of life, demonstrates the role played by organization. In primitive forms, living creatures had minimum need for integrated group effort. As life evolved and complex group action and relationships became a necessity, organization became inevitable. The ability to organize efforts became important as the groups lived in became larger and complex. Organization enabled men in groups to apply their brain and muscle power to the available natural resources for the production of material goods.

Today, organization has enabled men to increase their riches far beyond their own dreams by making use of machine power and mechanized tools. The evolution of organization has mostly been a process of trial and error, and improvements over the successful and productive forms of organization have refined these processes.

Now that we have realized the role played by organization in our own lives, we could determine what we mean by organization. Organization is defined as a group of people working in harmony to achieve a common objective or goal.


The management activity that

1. determines work to be done
2. forms departments
3. assigns responsibility
4. delegates authority
5. designs framework of relationships
6. allocates resources

In the process of organizing, the manager must first identify the work that must be done to reach his objectives. This work must be divided into smaller parts, each made up of closely related work, and given to individuals. The manager makes teams of individuals, each doing the same kind of work and thus unifies their effort. The manager also decides what part of the work would be performed by him and what would be entrusted to his subordinates. The manager sets up rules for team work to enable his people to work harmoniously together under all circumstances. These rules or relationships can be permanent and can form a pattern to which people can be trained. They can also change along with the personalities involved.

Importance of Organization:

A sound organization can contribute greatly to the continuity and success of the enterprise. Its importance lies in its ability to facilitate administration of the company, encourage growth and diversification and improve the operation of the business as a whole.

Facilitates administration:
A properly designed and balanced organization facilitates both management and operation of the enterprise while an ineffective organization may not just discourage it but actually render it impossible. Depending on the needs of managers, companies must provide for planning, organizing, motivation, coordination and control by providing appropriate staff groupings to perform this work. the manner in which the total work is divided and grouped into units may directly affect operating results. Overload and expensive overlap of work which directly affects operating efficiencies often stems from poor organization. Inclusion of an incompatible activity in a department creates unnecessary work. A planned organization relieves situations when managers have no time to perform their management responsibility as they busily concerned with doing work that should be handled by subordinates. So, in short, a good organization facilitates delegation of responsibility and authority and frees managers for policy formation and forward planning.

Facilitates growth and diversification:
The organization structure is the framework within which the company grows. Some types of organizations though ideally suited to the early stages of a company’s growth may prove inadequate as growth and diversification occur. An alert management anticipates the need for change to facilitate growth much before it is hampered by shackles of its own making.