Give The Main Reasons Why Organisation Exist?


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Frances Bott Profile
Frances Bott answered
Organizations exist for a variety of reasons:

• Tapping collective mindsets.
By creating an organization, an entire group of people can contribute towards a single aim, be it business, social, economic, political or religious. This use of intellectual capital allows organizations to maximize their capacity for business. Underuse of such intellectual resources is believed to impact on profits and efficiency as people who would otherwise be unheard alone can be easily incorporated into a single organization.

• Transaction cost efficiency.
William G Ouchy argues that organizations are more efficient at reducing transaction costs than any other model. This would explain why an organization would emerge in the first place on a purely financial rather than intellectual level. Ouchy also argues that as part and parcel of an organization, a social level is created: A corporate culture within the organization, based on procedures and traditions.

• Amalgam Theories.
Organizations, according to this theory, are an outgrowth of a generalized grouping together of specialists and traditions to better economic performance.  This theory can be adapted to explain why non-profit NGOs can also arise in exactly the same way, despite an absence of any profit-based cultural need.

• Common Interests
Under this theory, any group of like-minded people band together to form an organization in pursuit of a common cause. This also fits the non-profit models.

• Practicality.
Any organization exists purely as a means to getting something done more efficiently and with fewer problems. This is argued as a bricks and mortar approach: Organization follows process.  Organization does not necessarily exist as a means to itself, but needs a purpose to mould itself around, becoming more complete as it goes along.

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