Know Your Organisation

ACCA - F1   ACCOUNTANT  IN  BUSINESS

Knowing the organisation you relate with is very important. Not all workforces who are integral part of an organisation realize "nature and purpose for knowing organisation". This is same with the shareholders too. That means most connected stakeholders focus only on their interest from the organisation. But, without knowing the organisation (i.e.  type, sector, structure, size, nature and control) it's difficult to maximize the expected return. Knowing the organisation helps stakeholders to align their interest with associated organisation and achieve maximum payoff in long run.

An organization (or organisation) is a "social entity" that has "a collective goal" and is "linked to an external environment". There are a variety of legal types of organizations, including corporations, governments, non-governmental organizations, international organizations, armed forces, charities, not-for-profit corporations, partnerships, cooperatives, and universities.

Organisations vary in size. A collaboration of two individuals operating a partnership business with some thousand of capital investment is an organisation. A multi-billion/trillion dollar multinational company having turnover more than that of some developing nations' GDP is also an organisation.

Organisations vary by their members. United Nation's organisation has member states where, individual on the committee represents their country. A trade or education association with related member bodies is also an organisation. Likely, a partnership with two individuals also represents an organisation.

Organisation relates to different sectors. It can be natural resource sector like oil and minerals, non-resource tradable sector like manufacturing and agriculture and non-tradable sectors like service and construction.

Different organisations have different purposes. Some organisations goal is to earn profit whereas other intent to deliver value for money (not-profit seeking) and a few have philanthropic purposes.

Control is another key criteria to classify organisations. Some organisations are controlled by state (State Owned Enterprises). A private sector organisation is one that is controlled by private individuals. Although ownership belongs to shareholders, the board of directors controls public limited companies.

Further, a hybrid organization is a body that operates in both the public sector and the private sector simultaneously, fulfilling public duties and developing commercial market activities. A voluntary association is an organization consisting of volunteers. Such organizations may be able to operate without legal formalities, depending on jurisdiction, including informal clubs. Organizations may also operate in secret and/or illegally in the case of secret societies, criminal organizations and resistance movements.

All this is about knowing your organisation. Any concerned party should evaluate their expectation and potential mutual benefit before creating financial/non-financial formal relationship with other organisation.

An example; a recruit seeking accounting post can benefit knowing the size, sector, control, purpose and ownership (members) of the target organisation. Given a profit-seeking partnership, manufacturing organisation operating in small market segment with few employees the recruit can easily guess the plainness of his job and deliver outstanding performance in selection process. The same is case for every stakeholder.

The bold characters are copied form Wikipedia.