What Is an Organization?


This post has two parts: a series overview, and a discussion of what is an organization.

tl;dr: Three definitions highlight complementary elements of organizations. The definitions all conceptualize organizations as social systems, that is, as collectivities of two or more interdependent people; in which participants are better off with the organization existing and functioning than not in pursuit of their interests.

Series Overview

This is the first in a series of posts on topics in organization and management studies, or OMS for short.

The guiding idea is that organizations are a key feature of human life, and that literally everyone has ideas to contribute to the discussion and study of organizations. Non-OMS folks (and OMS folks, for that matter) experience organizations every single day of their lives. Their experiences, that is, your experiences, matter and have meaning — in and of themselves, of course, but more pertinent to this series is how OMS folks might think of them, through our theories, perspectives, and other insights.

Why should you care about what OMS folks think? I ask myself the same thing every day… kidding! I assume that you, as a human being, seek meaning in your own experiences and, perhaps, may wonder how your environment shapes you and your experiences and, conversely, how you and your experiences can shape your environment. If that’s too fluffy, then knowing some OMS concepts can equip you to operate more effectively in your environment, however that may be defined. So if we have these two poles — interpretive to instrumental — I assume most people fall somewhere in between. In fact, I’m willing to bet you oscillate between these two poles at different times in your organizations!

The point is, I think (or at least hope) there’s something for everyone to learn through reading these posts.

My goal for the series is to foster discussion between non-OMS and OMS communities, primarily by translating OMS concepts for non-OMS folks. Comments are welcome to clarify, challenge, and elaborate ideas in the post. I make no claim of having perfect knowledge or even of representing perfectly what all OMS folks think. One thing that will quickly emerge from these posts is that not all OMS scholars agree completely on all OMS topics. I nevertheless hope to cover enough ground to represent the diversity of thought.

Voting for future posts will take place on LinkedIn. The winner of each poll will be the topic of the following post and will be removed from the poll. A new topic will replace the winning topic in future polls (selection mechanism TBD, but I hope to involve reader input). The runner-up topic will move to the “Like” position of the next poll — substantively meaningless, since it doesn’t prevent anyone from selecting another option, but recognizing (and drawing on OMS research!) that ordering of options matters, all else equal.

Enough overview; let’s get to organizations!

What is an Organization?

The subtitle of the book Organizations and Organizing: Rational, Natural, and Open Systems Perspectives by W. Richard (Dick) Scott and Gerald F. (Jerry) Davis lists right there the three main perspectives on organizations in OMS. For each perspective, I’ll share their definition and add a few (non-peer-reviewed) observations. The book, by the way, is an excellent resource, written at the late undergraduate to early graduate level of complexity.

As perspectives, the three are not mutually exclusive. I think a better metaphor is that if we examined an organization under a microscope, we can zoom closer to or further from certain parts of the organization. Alternatively, we could imagine each perspective as shining a different colored light onto the same object. Under each light, different aspects are more or less (or in)visible, but the underlying object is the same.

There’s no right or wrong, or better or worse, way to conceive of an organization. To get the widest lens, then, it can make sense to think through your organizations from each perspective, and notice what aspects stand out more or less.

Rational systems

“Organizations are collectivities oriented to the pursuit of relatively specific goals and exhibiting relatively highly formalized social structures” (p. 38; emphases added).

The key points are

  • One person cannot be an organization, that is, there is some coordination of activity going on;
  • Organizations vary in how specific their goals are;
  • Organizations vary in how their rules, roles, and behavior are prescribed independently of the individual people that form part of the organization.

This is fairly jargony, so what’s going on? The rational systems perspective on organizations is sort of like seeing organizations as machines. Machines have specific functions, that is, they are designed to do certain tasks; and machines have blueprints that specify how pieces fit together. Ideally, the pieces work together more smoothly to accomplish the goal, than they would separately.

The rational systems perspective is a useful starting point for understanding organizations because it distills them down to their fundamentals, keeping aside some of the “messiness” associated with any social system, that is, any entity involving two or more interdependent people. But if the messiness is what interests you (and, let’s be real, who doesn’t like to get their hands dirty?), then we can draw on other perspectives on organizations.

Natural systems

“Organizations are collectivities whose participants are pursuing multiple interests, both disparate and common, but who recognize the value of perpetuating the organization as an important resource” (p. 39; emphases added).

Compared with the rational systems view, the natural systems view is more “bottom-up,” and recognizes the multiple, potentially competing interests that members bring to an organization. This perspective focuses more on what organizational members actually do, instead of what they are “supposed” to do.

One way to think of this perspective is by imagining the multiple organizational identities people have, or multiple “hats” they wear within an organization. For example you may work for your company, but within the company you may work for one vertical or one function, to which you may have more loyalty than to the broader company. One step further, you may work for a particular manager or on a team you are most loyal to. You can apply details from your own experience onto this skeleton framework, but what you might realize is that at each area or sub-system of an organization, goals and interests are different. What might be best for your team may not be best for the vertical, or vice versa, and so on.

Finally, like the rational systems perspective, the natural systems perspective recognizes that participants in the organization believe that their participation brings about their interests more smoothly than not.

Open systems

“Organizations are congeries of interdependent flows and activities linking shifting coalitions of participants embedded in wider material-resource and institutional environments” (p. 40; emphases added).

Like with the other two perspectives, we can tease this apart by thinking through effects at the level of an organization broadly, as well as among individual people that make up the organization. For organizations, we can imagine that an organization lies at the intersection of many “streams” of activities: the legal environment, societal culture, technological developments, and more local things like labor markets, supply chains, and funding. All these streams “flow into” the organization, and the organization may try to optimize its position relative to all these streams.

For individuals, we can go back to the idea of identities and interests. The natural systems perspective highlights the within-organization identities that matter. Remember how we said the rational systems perspective isolates the organization away from all the other “messiness” out there? In that sense, the natural systems coincides, while the open systems perspective differs by explicitly accounting for environment.

Besides looking at identities and interests within the organization like in natural systems, is looking at identities and interests outside the organization. You may go to the office every day (ha) as an employee, but you don’t leave your other identities (family member, partner, neighbor, friend, etc.) at the door. Similar to the natural systems case, what may be good for one identity (working more for a bigger paycheck) may not be good for other identities (missing out on quality time with friends).

Where the first two definitions tend to isolate the organization as a discrete, independent (“closed”) entity, this perspective recognizes that the organization is enmeshed in a complex web of interdependent social forces. Rather than taking a “top-down” or “bottom-up” view of the organization, this perspective can be thought of as taking an “outside-in” and “inside-out” view.


In short, organizations are social systems: collectivities of two or more people wo are interdependent in the pursuit of interests that vary in the degree to which they are shared. We can examine organizations from the perspectives of what they’re supposed to do, what they actually do, and how they fit in their environment. These are not mutually exclusive perspectives, and in fact the most interesting insights emerge when we combine two or more perspectives.