The basic principle of understanding anything in science is to break it down into smaller pieces of information. To understand what an organisation is, it is required to read the actual definition. Over course of many years researchers have come to this definition:
An organisation is a group of people trying to realise an idea and ensuring good returns for the investors.
There can be infinite type of organisations or ideas or returns for the investor, but this definition covers all. Notice the three things here:
- Group of people
- Realise an idea
- Good returns for the investors
These are the first layer of categories which can be sub-divided into their own categories. Every problem can be traced to one these three ultimately. Is it a people’s problem, is it an idea problem or is it an investment return problem. This was easy as all of the details are already out there but to sub-categorise did take some thinking. There are various ways to find solution to things. I am trying to use mental models that I have learned to find definition of the categories so generic that it covers all the cases and yet doesn’t loose the crux of it.
Group of people
As per definition it only means more than one persons. Apart from that, it does not give any useful information to work on. 5W1H (what, when, where, why, who and how) is the best tool to dig into something unknown for information. In this context of an organisation the only questions that matters is How.
How did the group of people organise themselves? Efficiently.
Although the question can be answered in many ways but the only answer that matter is efficiently. Every other answer would be answering the question technically and specific to a scenario. It is important for a group to be organised efficiently to maximise the opportunity to realise the idea and returns for investors.
Realise an idea
Going as per the same investigation model, the question that matters here is What.
What did an organisation do to realise the idea? Act.
An idea can be realised in one and only one way, by acting on it. It can be psychological or physical but in no way other than action it can be achieved.
Good returns for the investors
Conventionally, only shareholders are referred to as investors. And if it is seen technically then the employees are also investing their time and skill for the benefit of the organisation and expect fair returns much like the shareholders. An employee is a stakeholder, nonetheless should be considered as an investor. According to the type idea, returns will also be psychological or physical. The question that should be asked is:
What did the organisation do for good returns? Profit.
Profit is the metric to measure the return to the investors. If it’s psychological how many members does the community have. If it’s physical, how much profit got made off items/subscriptions sold. It is as simple as that.
No matter what an organisation does, how many people it has and where it is located, this is what matters:
Efficiency of the group, actions and profit are the fundamentals of building a successful organisation.
If these are done right, the chances are higher that everything will go in the right direction for the organisation. But it is easier said than done.