BUSINESS ORGANIZATION

A business organization is an individual or group of people that collaborate to achieve certain commercial goals. Some business organizations are formed to earn income for owners. Other business organizations, called nonprofits, are formed for public purposes. These businesses often raise money and utilize other resources to provide or support public programs.
Organization Meaning
The best way to derive the meaning of the term "business organization" is to focus on each word separately. Organization is a broader term, as it includes businesses and other groups of people not organized for commercial purposes. Clubs and sports teams are examples of non-business organizations. Organizations have a specific structure and hierarchy. People and systems create a culture within the organization and guide its operation. Different organizations have different policies, work flows and objectives.
Business Meaning
All businesses have commercial objectives. For-profit businesses sell products or services to generate revenue and earnings. Success depends on the ability to gain more in revenue than is spent on fixed and variable expenses. Nonprofit businesses must bring in enough revenue to pay employees and cover the costs to administer or support programs. Any money they have left over after expenses is put back into the organization.
System View
Definitions of organizations typically emphasize the systematic approach used to achieve goals. Businesses typically begin with a hierarchy that establishes structure and order in communication and workflow. Business leaders work to establish a business mission, vision, values, objectives and strategies. These establish the direction for the organizational system. People, processes and policies are used to fulfill the mission and strategies. The effectiveness of a business organization often relates to the ability of leaders to get all departments and employees to work together toward company objectives.
Organizational Culture
An organizational culture reflects the shared values within the organization that impact employee morale, communication and, ultimately, success. Companies use formal processes and activities to influence culture, such as social activities to promote teamwork. However, much of an organization's unique culture evolves through informal channels. For example, a company's culture can be affected by the way employees communicate during lunch, breaks and other informal encounters.

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