Importance of Business Organization

“An empowered organization is one in which individuals have the knowledge, skill, desire, and opportunity to personally succeed in a way that leads to collective organizational success.” –  Stephen Covey

The word organization comes from ‘Organism’ meaning a system made up of parts that are dependent on each other. It can also be defined as being the way in which the different parts of a system are arranged and work together. Koontz and O’ Donnell define, “It is the grouping of activities necessary to attain enterprise objectives and assignment of each grouping to a manger with authority necessary to supervise it”. An organization is a system wherein the resources or the inputs are processed so as to be converted in to end results or the out puts.

In order that a building may be erected the strong foundation is laid, it is necessary that the sound organization should be laid out in order to carry out successfully the functions of management. Organization is the foundation of management without which the tasks of management, such as, planning, organizing, directing and controlling are unlikely to be worthwhile and hence cannot be implemented effectively.

This is replete with fact that success of a business is reliant on group efforts and mutual assistance from one another which leads to accomplish a common purpose. That which is said in the main that two are better than one to carry out a particular task by their cooperation and mutual efforts towards a common goal, is similar to what lies from the perspective of organization formation. It is through the formal pattern of an organization creating a formal relation ship between employees while building a team spirit and paving the way to overall organizational goals. According to Bernard, “An organization is a system of consciously coordinated activities or forces of two or more persons.”

It is not that an organization is existent without purpose and benefit – of course – it must have a purpose for the existence and identity. Organizations are of a great consequence, without a concept of organizations objectives could not be achieved by the efforts of individuals by their own. The characteristic of a good organization is not only it achieves objectives but also provides means to overall satisfaction to its members. The better the activities are organized in the organization, the greater will be the achievements with a coordinated structure.

A business Organization focuses attention on human element and their organizational life while creating appropriate systems to help people work together towards the desired goals, and providing capacity for progressive developments. It is a source of building relationship between its people. It plays a vital role in providing the individuals friendliness, communal satisfaction and support. Being companionable is a part of the very nature of people and they want to satisfy the need of interactions and reciprocal actions. Thus, the organization creates a strong relationship among the people by defining a common purpose. As Harold S. Geneen says, “Every company has two organizational structures: The formal one is written on the charts; the other is the everyday relationship of the men and women in the organization.”

It is the organization that provides the means and the grounds for individuals to fulfill their personal goals besides being in pursuit of its own mission and objectives. When an individual makes a start his career wishing for his professional progress and becomes a part of an organization, brings along him a bundle of hopes and ambitions. While winning his livelihood by the sweat of his brow, he wishes to develop his skills being desirous of gaining prestige and position. His vision is to become what he is willing to be on the basis of what is capable of. Being committed to organizational goals, he puts all his sincere efforts and loyalty and hard-work and productiveness and diligence. Thus in lieu of these, the organization lets him receive the benefits and pleasures by satisfying him and fulfilling his aspirations.

The process of organizing in the organizations is initiated with the identification of activities directed towards the attainment of objectives. It is then on the basis of principle of division of work that various departments and sections are grouped having related job activities; the responsibilities being defined to the members that they know what is expected of them. The tasks are assigned and authorities are delegated to persons according to their educational qualifications, experience and abilities. The merit of task specialization is that it enables the organization to hire such people who have specific abilities to perform particular job activities. Thus, on the basis of division of work and the specialization, the process involves fixing the right person at the right place, at the right time.

The redeeming feature of a sound organization is that being adaptive it evolves in order to respond to the changing environments both externally and internally – It entails forward-thinking and dynamism in order that it can stay ahead of competition. It develops such structure that makes sense to carry out its activities effectively and efficiently while focusing on the establishment of effective communication.

It is of much value and important that an organization should be systematically planned. A flexible organizational structure does not only help the organization to run smoothly but also enables it to adopt new technologies. The paradigm of sound organization is that it facilitates the workers to develop their skills while increasing their efforts, improving the efficiencies and effectiveness. If an organization plan is devoid of, management will be nothing but an ad-hoc arrangement. The conclusive evidence whether an organization is sound is the assurance of overall organizational effectiveness, efficiency and success seemingly endless.

Take a look at Professional Presentations

Written by:
K. A. Fareed (Fareed Siddiqui)
Writer, Trainer, Author, Blogger, Software Developer
BBA, MBA-Finance, MPhil-Financial Management, (MSc-Software Engineering)
MA-English, MPhil-English
Post Graduate Diploma in Computer Applications and Programming
Certificate course in English language proficiency
Level 1 – Leadership and Management ILM – UK
Pursuing CMA-USA
Individual Member of Institute of Management Consultants of India


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