1.2 What is an Organization?

As with any academic endeavor, one must understand what one is studying before one can delve into the specifics and intricacies of the subject matter. For this reason, this section is going to start by defining what is meant by the term “organization” and then looking at three different ways of categorizing different types of organization.

Defining “Organization”

Many people have attempted to define what is meant by the word “organization.” Instead of following suit and throwing yet another definition into the mix, we’ve selected a number of definitions from common dictionary definitions to ones used by business, psychology, economics, and communication scholars. Table 1.1 contains a partial list of the different types of definitions seen across various academic disciplines.

After reading this laundry list of different definitions for the word “organization,” you may wonder how you to determine which one is the best? Well, to be honest—we think they all have something to offer. When you look at the various definitions for the word “organization,” you will start to see a certain pattern emerge of consistent themes within the definition. Jason Wrench examined a similar list of definitions and concluded that there are three primary features that run through all definitions of the term “organization”: the structure, the goal, and the people.

Organizational Structures

The first major theme commonly seen in the various definitions of the word “organization” has to do with structure. How an organization functions in terms of what happens both within the organization itself and within its external environment. When we talk about how organizations are structured, we are talking primarily about how they function in terms of what happens both within an organization and how an organizations functions within its external environment. For our purposes, we will look at structure in terms of four basic processes: external environment, input, throughput, and output.

External Environment

The first factor to consider when thinking about an organization is the external environment that an organization exists in. The external environment consists of all vendors, competitors, customers, and other stakeholders who can have an impact on the organization itself but exist outside the boundaries of the organization. Changes in the external environment where an organization exists will have an effect on the organization itself. For example, image that the government is going to pose new regulations on your industry, these new regulations will have an effect on how the organization must function. When it comes to how organizations interact with its external environment, we often refer to two different types of boundaries. An organization that has open boundariesOrganizations that allow for the free flow of information to the organization and is more likely able to adapt to changes that occurs within the environment. allows for the free flow of information to the organization and is more likely able to adapt to changes that occurs within the environment. Closed boundaries. When an organization insulates itself from what is occurring within its external environment., on the other hand, occur when an organization tries to insulate itself from what is occurring within its environment. When an organization has closed boundaries, that organization ends up being less aware of what is going on within the external environment and sets itself up for major problems or obsolescence.

Input

The next major aspect of an organization’s environment involves inputs. Inputs are those resources that an organization brings in from the external environment in order for the organization to accomplish its goals. Typically, resources can be discussed in three general categories: physical materials, people, and information. First, organizations bring in physical materials that it needs to accomplish its goals. Whether its computers, desks, light fixtures, or supplies necessary to build silicon microchips, organizations rely on a variety of vendors in the external environment to provide physical materials.

The second type of input necessary from the external environment involves people. People can either come in the forms of workers, which are necessary resources for any organization. An organization is reliant on bringing in skilled workers to help the organization accomplish its goals. One of the biggest complaints many organizations have is a lack of skilled or qualified workers. Depending on the organization, skills or qualifications can run from specific college or graduate degrees to specific industry experience to specific technical know-how. According to Julian L. Alssid, executive director of the Workforce Strategy Center in New York, “Employers seem to be less willing to invest in training in this economy. Again, it is the combination of the right credential and practical experience they look for.”

The final type of input an organization needs is information. Information refers to any data that is necessary for an organization to possess in an effort to create knowledge. According to the American Society for Training and Development (ASTD), data is “is raw and without context and can exist in any form, usable or not.” Often organizations end up with piles of data including customer service reports, market trends, and other material typically in the raw, numerical form. Organizations then turn this data into information by giving the data meaning through some kind of interpretation. While most people think of data as purely numerical, there are other non-numerical types of data that can be important to turn into information. For example, if the US congress passes a new law that impacts how your organization must handle customer records, the law may not specifically say how your organization must comply with the law. In this case, the new law is data and your organization must turn that law into usable information in the form of its own policies and procedures. When you combine information with understanding that leads to action, information is transformed from information to knowledge.

So, how do organizations go about acquiring data that can lead to action? ASTD discusses two types of external environment scanning processes that organizations can employ: proactive and reactive. First, proactive scanning, occurs when an organization actively looks for data or existing information that could be transformed into useable knowledge. For example, doing research on your competitors in an effort to stay on top of your market is an example of proactive scanning. The second type of scanning, reactive scanning, occurs when an organization faces a specific problem or crisis and then either makes sense of data/information it poses or searches the external environment for data or information that could be useful. Ideally, if an organization does a good job with proactive scanning, reactive scanning will not be necessary very often. When an organization is forced to use reactive scanning, time gets wasted as they attempt to find the data/information and turn it into actionable knowledge.

Throughput

Throughput is ultimately what an organization does with inputs within the confines of the organization itself. Throughput can range from the use physical materials, people, and information to how organizations structure themselves internally to create goal oriented throughput. While we cannot discuss every possible way an organization can utilize inputs, we should note that the issue of internal organizational structure is very important at this level of an organization. For this reason, we really must discuss two ways that organizations commonly structure hierarchies.

A hierarchy is a categorization system where individuals/departments are ranked over other individuals/departments based on skills, centrality, and status. First, organizations can place people/departments over others because of specific skill sets. For example, managers are placed over workers because of their skills in managing people. While we know this isn’t always why people get promoted, the general idea of a management class of people is because managers can help organize employees towards the organization’s goal(s). Second, people can be ranked over others because of their centrality to the organization’s goals. For example, if your organization is a tech company, the product developers may be ranged structurally over people in customer support or marketing because without the product developers there is no need for customer support or marketing. Lastly, organizations can be organized based on status, an individual’s relative position to others as a result of esteem, privilege, or responsibility. When someone gets promoted to a higher position, her or his status increases in terms of a formal hierarchy. Whether that promotion is a result of esteem, privilege, or responsibility doesn’t matter at this point, only the elevation within the hierarchy.

Now that we’ve discussed what a hierarchy is, let’s talk about the two common ways that organizations are typically patterned: flat vs. tall hierarchies.

Tall hierarchies are called such because they represent many, many hierarchical layers between those at the bottom of the hierarchy and those at the top of the hierarchy. Two commonly discussed tall hierarchies are the Catholic Church and the US military. With the Catholic Church, you have the average parishioner at the bottom of the hierarchy the Pope at the top of the hierarchy. In the US military, you have your average enlisted soldier at the bottom of the hierarchy and the President of the United States (in her/his commander in chief title) at the top of the hierarchy. In both cases, the people at the bottom have little or no communication with those at the top of the hierarchy.

Flat hierarchies exist where there are only a couple of hierarchical layers between those at the bottom and those at the top of the hierarchy. Think of these organizations like mom and pop restaurants. In a typical small restaurant, the owner may also serve as the chef and may only have a handful of waitstaff, table bussers, and dish cleaners as employees. In these hierarchies, it is very easy for those at the bottom of the hierarchy to communicate with those at the top of the hierarchy.

Output

The final aspect related to organizational structure is output, which is the ultimate product or service that an organization disseminates back to the external environment. Whether one is create the components of a cell phone or sending computer technicians to people’s homes, every organization is designed to produce some kind of service or product for the external environment. Even nonprofit organizations like the American Red Cross are producing a range of both products and services for the external environment.

Organizational Goals

Organizations have many goals, but it helps to clarify those goals into a simple typology (classification into ordered categories). Edward Gross examined the various types of organizational goals and created a simple typology consisting of five distinct goals that organizations have: output, adaptation, management, motivation, and positional.

Output Goals

The first type of goal that organizations commonly have are referred to as output goals, or organizational goals that are “reflected, immediately or in the future, in some product, service, skill or orientation which will affect (and is intended to affect) that society” (Gross, 1969). While Gross was initially discussing goals in terms of educational organizations, the goals also apply to other organizational types as well.

In essence, every organization has some type of output goal that will be released back into the external environment. For a pizza chain, the output goal could be the pizza it delivers to your house (product); the customer service it gives customers (service); or the expertise in pizza making it brings to the enterprise (skill).

Adaptation Goals

The second type of organizational goal argued by Edward Gross are adaptation goals, or goals that an organization has in terms of adapting to the external environment. All organizations exist in environments that change, and successful organizations are going to change and adapt to that external environment. One of the biggest risks many organizations face if they do not adapt to the external environment is obsolescence, which “occurs when there is a significant decline in customer desire for an organization’s products or services” (Wrench, 2012). Many organizations becomes so focused on making a specific product that the product eventually is no longer wanted or needed by customers, which will lead to the eventual death of an organization.

Management Goals

The next type of organizational goal discussed by Edward Gross are management goals, which involves three types of decisions: (1) who will manage or run an organization, (2) how to handle conflict management, and (3) output goal prioritization.

First, organizations need to decide on the formal structure of an organization and who will exist at various rungs of the hierarchy. In addition to determining the formal structure, these goals also determine what type of and who holds power within the organizational hierarchy. Second, managerial goals focus on how conflicts within the organization will be handled. Organizations have a vested interest in keeping the organization running smoothly, so too much conflict can lead to interpersonal or inter-departmental bickering that has negative consequences for the organization. Lastly, management goals determine the overarching direction of the organization itself. As the saying goes, someone has to steer the ship. We’ll discuss different types of leaders in Chapter 7, but for now we’ll just note that having a clear direction and clear prioritization of the products and services an organization has is very important for the health of an organization. If an organization tries to do too much, the organization may end up scatter-brained and not function as a cohesive whole. If the organization tries to do one and only one thing, the organization may become obsolescent. Overall, people in management must place output goal prioritization very high on the to-do-list.

Motivational Goals

The fourth common goal organizations have, as discussed by Edward Gross, are motivational goals or goals set out to ensure that all employees are satisfied and remain loyal to the organization.There is a wealth of research that has examined the importance of employee motivation on job satisfaction and worker productivity. Researchers have examined the relationship between job satisfaction and employee productivity across 73 different research studies that have examined the subject. Overall, they concluded that satisfied employees were more productive. Secondly, ensuring that employees are motivated also helps to ensure that employees remain loyal to an organization. According to Hart and Thompson, employee loyalty is “an individual’s perception that both parties to a relationship [employee and organization] have fulfilled reciprocal expectations that 1) demote enduring attachment between two parties, and that 2) involve self-sacrifice in the face of alternatives, and that 3) are laden with obligations of duty.” By this definition employees are loyal because they knowingly enter into a relationship with an organization, sacrifice part of themselves to the organization (and vice versa), and thus feel a sense of obligation or duty to the organization. Of course, loyalty only works when an employee feels that the organization is standing up to its end of the reciprocal expectations. If an employee feels that an organization is not meeting its basic obligations, then the employee will view that organization unkindly and the employees loyalty will diminish over time. As such, organizations must strive to make one of its goals ensuring that it is meeting its basic obligations towards employees in an effort to foster employee loyalty.

Positional Goals

The final type of organizational goal described by Edward Gross are positional goals, which are goals that attempt to position an organization within the environment in comparison to other organizations within the same market.For example, imagine that your organization is an automotive tool manufacturer. Your organization will attempt to position itself against other automotive tool manufacturers that exist in the market. There are two common ways to position one’s self within a specific market: 1) higher volume at a lower price or 2) higher quality at a higher price. The first way to position one’s self within a market is to create more products or faster service at a cheaper cost. The second way to position one’s self in the market is to create a luxury product/service that costs more. While the product or service costs more, you provide the appearance of being the luxury brand. In a 2011 article in PCWorld, the authors mention that 56% of new cellphone users were purchasing an Android device as compared to only 28% that purchased an iOS (iPhone) device. Simply put, the Android is cheaper and there are more versions of the Android available for cellphone subscribers. Only Apple makes iOS compatible cellphones and they are typically more expensive than Android devices. Apple has historically set itself up as a luxury line in the computing industry while PCs and now Android cellphones are cheaper and made for the mass market. Interestingly, iPhones actually only account for 4% of the overall cell phone market in November 2011, but accounted for 52% of industry profits. Clearly, the iPhone may not be getting a strong percentage of the market share, but it is still beating out its competition.

Organizational People

The final characteristic common to the various definitions of the word “organization” involves people. In Jason Wrench’s original discussion of the three common themes related to people, he discussed interdependency, interaction, and leadership. For our purposes, we also pose the notion of control as an important factor related to people as well.

Interdependency

The first term associated with people in organizations is the concept of interdependency. Interdependency is mutual dependence or depending on one another. Interdependency is the notion that people within an organization are dependent upon one another to achieve the organization’s goals. If one part of the organization stops functioning properly, it will impact the other parts of the organization. For example, imagine you are a copyeditor for a publisher in New York City. If you get behind on your job, the graphic designers, marketing professionals, printers, and other groups of people will also get behind. At the same time, interdependency can also help an organization. If you working with a solid group of colleagues, if something happens to get you behind others can help pull the slack and keep things moving forward on schedule. Overall, people impact each other in organizations.

Interaction

Our interactions with others help define and create what is an organization. Without the interactions we have with our coworkers, customers, and other stakeholders, an organization really doesn’t exist. For this reason, you can almost say that the “thing” we call an organization doesn’t really exist because it’s not a physical structure, but rather an organization is the outcome of our interactions with others. An organization may have physical things within it (desks, computers, pencils, etc.), but the actual organization is ultimately the people that make exist.

At the same time, people within an organization also interact with each other in various roles in an effort to accomplish the organization’s goal(s). People within organizations and people who come in contact with organizations are constantly in a state of interaction. As we will learn later in this book, organizations have many different stakeholders (an individual or group that has an interest in the organization), and each different set of stakeholders requires different communication strategies. Ultimately, communicative interaction is one of the most basic functions of any organization.

Control

As the definition of organization from Dennis Mumby states, organizations are inherently entities that must control the behavior of its members while members generally strive for their own sets of needs. When one group has one set of needs and desires and another has a different set of needs and desires, we refer to these groups as being in dialectical tensions. Table 1.2 contains many of the dialectical tensions that exist between organizations and its various members.

As a result of these inherent dialectical tensions, organizations try to stack the deck in its favor to maximize its needs and desires, and subsequently minimizes the needs and desires of workers in the process. Let’s briefly examine each of these dialectical tensions in turn.

Minimize Costs vs. Maximize Salary/Benefits. The first dialectical tensions occurs when organizations try to keep their overhead costs low while workers try to maximize what they earn in terms of both salary and benefits (insurance, stock options, retirement, etc.).

Systemization vs. Autonomy. Organizations like stability, so they prefer workers who learn how to do a specific task and then systematize that task in the most efficient manner. As such, organizations (especially in manufacturing contexts) will train in explicit detail exactly how an employee should accomplish a task. Workers, on the other hand, prefer to have autonomy when making decisions for how best to accomplish their daily work and do not enjoy being micromanaged.

Streamline vs. Stability. Organizations are fundamentally focused on the bottom line, and therefore often want to have the ability to streamline the organization in an attempt to maximize profits. If an organization can lay off workers and maintain maximum productivity, then it’s often in the organization’s best interest to do so. While streamlining is good for an organization, it can create a chaotic environment for employees who crave job stability. Workers want to know that their work is appreciated and it will keep them employed.

Agreement vs. Dissent. The next dialectical tension listed here is agreement vs. dissent. In this tension, organizations prefer for workers to blindly follow and do what organizational leaders dictate. Workers, on the other hand, want to have a voice to articulate when they disagree with the dictates of leaders or the general direction of the organization. We’ll explore the area of organizational dissent more in Chapter 5.

Conventionality vs. Innovation. Organizations are innately slow moving organisms that do not like change, so it’s very common to hear “But we’ve always done it that way.” Workers on the other hand want to bring their own creative problem solving skills to the table and think of new and innovative processes and procedures that could benefit both the organizations and the workers. While not all worker ideas spot-on, organizations that stick to conventional ways of thinking may end up losing a lot of employees who prefer more freedom to be innovative.

Transparency vs. Privacy. In our world today organizations are increasingly want to know what workers are doing in the workplace. As such, organizations expect that employee’s work lives are completely transparent and will do everything from monitoring e-mail and telephone calls to installing software on workers’ computers that logs and monitors key strokes made on a keyboard. Workers, on the other hand, are increasingly demanding that there be some privacy especially in their digital lives.

Organization vs. Self-Focused. Organizations innately want workers to be focused on their jobs and improving their productivity. Workers, on the other hand, want to focus on themselves and improving themselves. Many organizations will support self-improvement as long as it has a clear benefit for the organization, but workers often want to focus on their own improvement even if that improvement has no benefits for the organization or may lead the worker to find a new organization.

Permanence vs. Change. When looking at the permanence/change dialectic, organizations strive to maintain knowledge and thus keep people who are hard workers for the long haul. Often, organizations call this employee loyalty. Workers on the other hand, desire change and can get very bored doing the same work day-in and day-out. Often workers become pigeonholed in specific jobs with specific duties, that there is no way to get out besides leaving the organization itself. Overall, organizations in our society have many more tools at its disposal to get its way than do workers.

Organizational vs. Individual Rights. Ultimately, when it comes to organizations the focus is on the organization and its rights and less on the individual’s rights. Workers believe that their human rights shouldn’t stop at the front door of the organization. For example, many workers are shocked when organizations fire them for posts that are made on social networking websites. Workers believe these posts should be private and organizations looking at these posts is a violation of one’s privacy rights. Organizations, on the other hand, believe looking at social networking site posts is a completely appropriate behavior and well within its rights as an organization. While this specific example also overlaps with the transparency/privacy dialectic, the focus here is on whose rights are more important.

Work vs. Social Life. The last dialectical tension associated with organizational control is the focus on work vs. social life. Organizations believe that workers should be focused purely on their work life. As a result of digital technology, it has become increasingly easier for people to be on call 24-7 by their organizations. Workers, on the other hand, believe they are entitled to a social life that does not involve one’s organization. Furthermore, workers often believe that as long as their private, social life behavior does not impact their work life, their organization’s should stay out of their personal lives. Many organizations go so far as to include “morality clauses” into contracts that enable them to fire employees whose person-life behavior is deemed inappropriate for organizational members

Leadership

The last term associated with people in organizations is leadership. Any organization must have an individual or clearly discernible group that guides the organization towards accomplishing its goal(s). Without strong leadership, individual members of an organization are left to their own ideas of how to accomplish the organization’s goals. Basically, if you have too many people trying to lead, you’ll end up with an organization that is stretched entirely too thin to accomplish anything.

The opposite of leadership is followership. If an organization is going to thrive, it must have strong leadership and followers who are willing to follow that leader. In Chapter 7 we’ll examine leadership and followership.

Types of Organizations

The last factor in understanding organizations is to realize that there are numerous types of organizations. For a good overview of the different taxonomies that have been created trying to categorize these different types of organizations, we recommend reading Carper and Snizek’s article on the subject (Carper, W. B., & Snizek, W. E. (1980). The nature and types of organizational taxonomies: An overview. Academy of Management Review, 5, 65–75).  For our purposes in this book, we are going to use the classification scheme originally posed by Peter M. Blau and W. Richard Scott. Blau and Scott created a taxonomy of organizations that included four distinct categories: mutual benefit, business concerns, service, and commonweal.

Mutual Benefit Associations

The first type of organization that exists is the mutual benefit organization, which is focused on providing for its membership. Some examples are “political parties, unions, fraternal associations, clubs, veterans’ organizations, professional associations, and religious sects” (Blau & Scott, 1962, p. 45). People generally join these types of organizations because of the benefits of membership. When these organizations are first being created, organizational members are generally very involved in the creation of the organization. However, once one of these organizations has been around for a while, the majority of the members become passive and let the minority run the organization.

Business Concerns

The second type of organization is the business concerns organization, which is focused on doing well for the organization itself. According to Blau and Scott, the “dominant problem of business concerns is that of operating efficiency—the achievement of maximum gain at minimum cost in order to further survival and growth in competition with other organizations” (1962, p. 49). Most for-profit organizations will fall into the business concerns organization. Business concerns organizations are faced with problems associated with “maximizing operating efficiency in a competitive situation” (Blau & Scott, 1962, p. 43). Because of the need to cut costs and maintain a competitive advantage, these organizations are often cold and calloused in how they treat its members and customers.

Service Organizations

According to Blau and Scott (1962), service organizations are “one whose prime beneficiary is the part of the public in direct contact with the organization, with whom and on whom its members work—in short, an organization whose basic function is to serve clients” (p. 51).  Service organizations can include “social-work agencies, hospitals, schools, legal aid societies, and mental health clinics” (Blau & Scott, 1962, p. 51). The basic problem service organizations face is “the problems associated with the conflict between professional service to clients and administrative procedures are characteristic of service organizations” (Blau, & Scott, 1962, p. 43). Often service organizations are steeped in organizational hierarchies and procedures that prohibit providing the easiest and fastest service to potential clients.

Commonweal

The last type of organization discussed by Blau and Scott are commonweal organizations “where the prime beneficiary is the public-at-large” (1962, p. 44). Some examples of commonweal organizations include “the State Department, the Bureau of Internal Revenue, military services, police and fire departments, and also the research function as distinguished from the teaching function in universities” (Blau & Scott, 1962, p. 54). All of these organizations were created because they represented areas where the general public needed some level of protection or knowledge or the organization serves administrative purposes of the government. Overall, the crucial problem posed “by commonweal organizations is the development of democratic mechanisms whereby they can be externally controlled by the public” (Blau & Scott, 1962, p. 43).

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