The Organisation


What is an organisation?

The word 'organisation' is derived from the word 'organise' which means to form, create or arrange something into an orderly structure. Therefore an organisation is a group of people working together to build a structure, order or operate according to a principal idea.

An organisation can also be classed as "a person, committee or a group of departments that make up the body for the purpose of administrating something." (Princeton University, 2009) It can also be defined as a social agreement or arrangement which is in the pursuit of collective goals that control their performance, with boundaries separating it from its environment.

There are three different types of organisations which are grouped as public, private and volunteer organisations.

Public organisation

"The non-profit sector is a collection of entities that are organisations; private is opposed to governmental; non-profit distributing; self-governing; voluntary; and of public benefit"

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A public organisation, also known as a non-profit organisation or 'third sector', is created with the principle of helping the public or a reciprocal benefit without the pursuit of for its owners or investors.

According to the segmentation of public organisations falls under four subcategories.

Charities; foundations created to promote the public good and not for the assistance to any one person, for example, the Salvation Army, the Ford Foundation.

Social Welfare; provisions of the government for assistance to a persons' economic need, for example, the National Association for the Advancement of Coloured People.

Professional associations; a compromised group of people who are concerned with a particular trade, industry or profession, for example, the Chamber of Commerce, American Medical Association. This type of segmentation can also be called 'networking'.

Religious organisations; a subgroup within a religion that falls and operates under a common name, tradition and identity, for example, churches, cults, etc.

Almost over a million organisations have registered with the Internal Revenue Service (IRS) as non-profit organisations. Although an estimation of at least a million small associations - both formal and informal - exist that do not register with the IRS as their revenues are below the recommended $5,000 per year. In America, these organisations have combined their revenues to 'approximately 621.4billion' (Lukhert, 2002) signifying 6.2% of the nations' economy.

Private Organisation

"Chamber of commerce local association of business people organised to promote the welfare of their community, especially its commercial interests."

Private organisations, also known as non-governmental organisations (NGO) are not federal entities, but independent special interest groups that have been set up by people acting outside the scale of any official facility they may have in the federal government.

The number of international NGO's is estimated at 40,000 (Anheier et al., "Global Civil Society 2001", 2001). While national numbers are even higher: Russia has over 277,000 NGO's (Anheier, 2001) while India is estimated to have almost 2 million. (Indian NGO's, 2007). These types of NGO's are defined also as civil society organisations.

There are four different subcategories within a private sector.

Sole proprietors; also known as sole traders, is a business entity that has no legal separate existence from its owner, meaning that they are independent and own an enterprise by themselves. For example, plumbers, electricians, television repairers. Some sole traders also set up their own businesses by creating web based companies and working from home.

Partnerships; typically found in professional services, is when a contract is created between two members in order to share their expertise and pool talent and money and share the profits and losses, for example, accountants, solicitors, doctors, etc. This is effective as they can also share the workload and organise work rotas to allow for time off. For example, in 1937 John Lewis joined with Waitrose and pooled their capital together. Also, companies such as Argos, Polestar and Cadbury are run by a group of directors, rather than shareholders, who pool together their capital and use it to provide a core sum of finance.

Franchise; 'an authorisation to sell a company's goods or services in a particular place' (Princeton Wordnet, n.d.). A franchise is a licensing arrangement where an individual or group can buy the rights to a trade and produce under the brand name, for example Coca-Cola, McDonalds.

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"Every company must register with the Registrar of Companies, and must have an official address."

Businesses come in a variety of forms, though one important distinction lies between public and private sectors. Within each sector there are a number of types of businesses, in public sectors, the corporate is owned by the government which are managed independently but have set aims and goals, whereas private sectors have sole traders whom act for themselves.

Voluntary Organisation

Voluntary organisation - also a non-profit organisation - is an establishment that is run on a not-for-profit origin, meaning that many of the employees/workers that work for the organisations do so without payment.

There are many different definitions for this particular subcategory. Powel Zaleski (2008) states, that in France the phrase 'voluntary organisation' means discourse on the 'third sector', which began in the 1970's as a result of the welfare state crisis. While in Japan, (Nobuo, I 2003) the third sector (daisan sekuta) is referred as the joint corporations endowing in both the public and private sector. While in UK, the Cabinet Office (2007) describes the phrase as "the place between State and the private sector".

There are a few types of voluntary organisation.

        Informal groups; which is represented by "a number of people with a shared interest coming together to pursue that interest"

        Unincorporated associations; which is the next step from an informal group that is structured by a small group with few, if any, contractual liabilities.

        Trusts; which constitutes of a body that is governed by a trust deed, meaning it holds beneficiary property or rights for a particular purpose.

        Companies limited by shares/guarantees; which a structured for profit (shares) or for non profit (guarantees) businesses.

But why do they exist?

"Organizations exist to enable ordinary people to do extraordinary things."

With the continuity in change of growth, technology and competition, organisations are in a constant flux.

There has been an extensive ongoing debate about public versus private services, which often fall onto private sectors edge on cost and innovation.

The leading charity to 'end global poverty' has changed its course, with the many other charity shops around they have turned their full attention to world crises. For example, Oxfam 365, a donation for West Africa's constant food crisis that follows with 'erratic rains that have caused poor food harvests and water shortages.'

Woolworths, a once thriving store has turned its attention to its online store after bankruptcy, with offers and sales, they have continued to dominate their target markets with the use of alternative technology and growth.

Most organisations tend to change over time as those who do not change cannot survive in global demanding. It is the rule for the going-concern of organisations to keep bringing some change and innovation for the customers. There are various ways through which they can change over time, through expansion, modification, diversification, product or brand extension, growth, technology. For example, the United Nation Organisation stated to bring social reforms in the world and is the most diverse organisation in the world today.

An organisation is an entity which is aimed to achieve goals; the existence of such depends on their objectives on the basis of how it came to be. For example, Ferrari cars dominate the offer of speed and luxury, while Toyota cars are number one over all.

Organisations can be for profit or for non-profit and have their own environment where people are responsible for achieving the company's goals.

Organisations don't live to make money, they live to imagine and create new things. Though, if these organisations can't make money then they can't imagine and create new ideas.

List of References

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  • Anheier, H (2000) The International Association for Research in Income and Wealth [online] available from [16 March 2010]
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  • Anon. (n.d.) 'Voluntary Impact: Types of Voluntary Organisations' Priory Centre [online] 2 (1), 1-3. available from [21 March 2010]
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  • Northern Ontario Business Journals (2000) 'Chamber of Commercialisation' Northern Ontario Business Journals, 2000
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  • SHACC (2006) The San Antonio Hispanic Chamber of Commerce, FAQs [online] available from: [19 March 2010]
  • Solamon M, Anheier, H, (1997) 'Defining the non-profit sector: a cross-national analysis' 2 ed, New York, Manchester University Press
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  • Zaleski, P. (2008) "Tocqueville on Civilian Society. A Romantic Vision of the Dichotomic Structure of Social Reality" Archiv für Begriffsgeschichte, [Archive for History of the Concept] 1(8946)
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