10 Characteristics of Organizations, their Types, Operating Models and Examples

We explain what an organization is and what its characteristics are. In addition, the types of organizations and their operating models.

What is an organization?

An organization is a grouping of people who work in a coordinated way to achieve a particular goal . The administrative direction is the area in charge of managing the performance of the different members of the organization, the use of resources, the infrastructure and the daily tasks that must be carried out.

The organization constitutes a social institution , that is, a human group that requires certain norms and an order to coexist adequately and achieve its objectives. These aspects are established through an organizational culture that allows an organization to perform and endure over time .

Characteristics of an organization

Among the main characteristics of an organization are:

• The staff. It can be made up of two or more members who work in a coordinated way to achieve a goal.
• The hierarchical structure. It can be defined vertically with a directive in command that makes all the decisions, or horizontally in which the management delegates certain responsibilities to other areas.
• The objectives . They can be commercial, non-profit, short-term or long-term. They must be clear and real, as they are what keep the organization on track.
• The mission and vision . The mission of an organization is the reason for existing, for example, to sell T-shirts to make a profit. The vision determines where it goes long term, for example, expand and export their products.
• The organizational culture . It can be planned or spontaneous and allows defining the work environment. It is defined as the system of rules and behaviors that give identity to an organization.
• Activity. You can develop various activities, such as offering products, services, social assistance, among others. Whatever your work, you must always maintain concrete and planned objectives to last over time.
• The geographic scope. It can be a local, national, international or multinational entity, depending on its place of origin, its scope of productivity , its expansion capacity and its commercial alliances.
• The legal personality. It can be a civil association, a foundation, a public limited company, among others. Every entity must be legally registered, so it has rights and obligations to comply with.
• Resource capacity. It can be managed based on three variables: available capital (includes investments or credit capacity), the number of employees (hired people) and material resources (which include infrastructure, equipment and supplies so that each employee can perform their tasks ).
• The size. It can be a small or medium-sized entity that is designated by the acronym PyMES (Small and Medium Enterprises), or a large company in case it has more than 200 employees. The structure will depend on the resource capacity you have.

Types of organizations

There are three main types of organizations according to their purpose:

• Commercial. They are those companies that exist to generate economic profits for their owners and shareholders. That is, they are intended to obtain more money from the investment. For example, private capital corporations, groups of companies or holding companies , public limited companies, cooperatives , among others.
• Nonprofit. They are those institutions that exist to provide a particular service to the community and receive contributions from partners and donations. Although they can raise money, it cannot be distributed as profit to the owners of the organization. For example, non-governmental organizations (NGOs), civil organizations and foundations, among others.
• State entities. They are those public bodies that exist to implement the administrative management of a Nation, such as ministries, secretariats and collecting entities.

Operating models

The main operating models that an organization can exercise are:

• Linear or vertical. It is the oldest model and it can still be found in force in some very bureaucratic entities. Command is exercised formally through orders from a superior directed to all areas of the entity.
• Functional or Taylorism. It is the model based on the scientific theory of Frederick Taylor on the division and specialization of tasks in order to achieve greater efficiency in the production process.
• Line-staff. It is the model that combines certain aspects of vertical and functional organization. The command continues to be centralized in an administrative directive, although certain departments enjoy freedom and have the responsibility for making decisions that concern the tasks of their area.
• By committees. It is the model in which the board of directors that makes the main decisions is made up of a group of shareholders who decide based on the choice of the majority. In addition to the committee, the organization may have a management and other area managers to whom it delegates the responsibilities of daily tasks.

Kalum Talbot

MA student of the TransAtlantic Masters program at UNC-Chapel Hill. Political Science with a focus on European Studies. Expressed ideas are open to revision. He not only covers Technical articles but also has skills in the fields of SEO, graphics, web development and coding. .