1 - Organizations

Abstract

This chapter describes the functions and processes of organizations. The term organization is used for a group of people working together over a period of time to achieve a common objective. Thus, a business that employs a number of people to make cars is an organization, the group of people having the common objective of making cars. Within a business, whether it is a small one or a large one, there will be a number of functions that have to be carried out. Specialization/division of labor occurs in organizations, and coordination of the different areas of specialization is required if an organization is to meet a common objective. Organizations are structured so that there is a framework within which individuals can carry out specified duties and that serves as a basis for implementing the procedures required to manage and control the business. Primary organizations are concerned with the first stage of production, having raw materials as their input and output of materials in a more useful form for other production organizations. Secondary organizations take the end product of the primary organizations or other secondary producers and then transform them into new products. Tertiary organizations offer services to people and other businesses such as retailing, insurance, and banking.