Fundamentals of Organizational Structure and Business Classification

Defining Organizational Structures

What is an Organization?

An organization can be defined in two primary ways:

1. A social system composed of individuals or groups, utilizing resources, developing a system, and coordinating international efforts to achieve a common goal within a context where they establish a reciprocal influence.
2. A human group composed of specialists working together on a common task. Unlike society, community, or family, an organization is purposely designed and is not based solely on the psychological nature or biological needs of humans. However, as human creations, they are subject to lasting, perhaps forever, or existing only for a considered period.

Membership and Requirements

Not everyone can join a given organization. Each type of organization requires a specific personal profile, covering certain knowledge and experience.

Core Components of an Organization

Essential Elements of the Organization

Organizations rely on various resources to function effectively:

• Human Resources: The people who are part of the organization, whether permanently or temporarily.
• Material Resources: The resources needed for use in the production processes of the goods or services provided by the organization.
• Natural and Energy Resources: Resources that the organization does not own but must acquire at a price in exchange for operations.
• Ideas, knowledge, and information.
• Technological resources.
• Name, prestige, symbols, and trademarks.

Functions and Attributes

Key Characteristics of the Organization

Organizations serve multiple critical functions within society:

• Provide work, generate employment, and satisfy needs.
• Create and produce products or services, and disseminate technology.
• Create, transmit, and receive events and culture.
• Distribute and redistribute resources.
• Generate, possess, and transmit power.
• Are means to create, transmit, and modify knowledge.
• Are indicators of modern society.
• Create symbols, image, and prestige.
• Make it possible to reach general and special objectives.
• Allow interaction between individuals and groups, constantly interacting in defined spaces.
• Are spaces for personal and professional development.

Organizational Types

Nonprofit Entities

Nonprofit organizations need to utilize economic resources to continue operations. However, profit is not the main objective of the activity, but rather a means of subsistence.

The Concept of a Company (For-Profit Organization)

A company is an organization composed of a human group that meets to achieve certain goals using available resources. A company is active in the areas of trade, industry, finance, and services, primarily for the purpose of economic profit.

Classification of Enterprises

Companies can be classified based on several criteria:

According to their Size:

• Large enterprises
• Small enterprises
• Microenterprises

According to their Purpose:

• Industrial
• Commercial
• Services
• Financial
• Legal

According to their Legal Conformation:

• Corporations
• De Facto companies
• Limited liability companies
• Partnerships by shares

Depending on the Area of Operation:

• Local
• National
• International

According to the Degree of Capital Participation:

• Private
• Public
• Mixed

According to the Modality of Sales:

• Wholesale
• Retail