Typology and Classification of Organizations

Formal vs. informal and open vs. closed

Organizations can be classified under various criteria that determine their internal dynamics.

According to their structure, there are formal organizations, which have departments, planning and defined hierarchies, and informal ones, which arise from spontaneous relationships of friendship and interaction among members.

In terms of their relationship with the environment, open organizations maintain constant contact with suppliers, buyers and the external market, while closed organizations operate in isolation, although the latter model is becoming less and less common nowadays.

They can also be public, if they use government resources to provide services, or private, if they depend on private capital for their production or service operations.

By Lines of Command: Vertical and Horizontal

The distribution of authority classifies institutions as vertical or horizontal.

In verticals, each activity has a specific weight within a strict hierarchy of command.

In horizontal organizations, decisions are made at the grassroots, fostering a spirit of creation, dynamism and active participation of all members.

Depending on their duration, organizations can be permanent, if they adapt to changes in order to survive over time, or transitory, if they arise to satisfy a specific need and then disappear.

Regardless of its size, any coordinated social unit of two or more people that consciously works to achieve common goals constitutes an organization, whether it is a large corporation, a hospital, a school or a small family business.

Summary

Organizations are classified as formal, with defined hierarchies, or informal, based on spontaneous relationships. They can also be open to the market or closed, operating in isolation and independently.

Depending on their command, they are vertical if they have strict hierarchies, or horizontal if they encourage participation. Likewise, they can be permanent or transitory to meet social or specific needs.

Regardless of size, any coordinated unit pursuing common goals constitutes an organization. This ranges from large corporations and hospitals to small family businesses with clear goals.