All organisations have a purpose. This may be: one of the following.
- To yield benefits for members of the organisation, e.g., a social club.
- To yield benefits for external individuals or organisations, e.g., a charity.
- A combination of the two, e.g., a business. Because an organisation must maintain itself, it is never entirely altruistic. However, because it requires inputs to function, it is normally co-operative, involving a process of negotiation and agreement.
- To yield disbenefits for other individuals or organisations, e.g., an army. In this case, the organisation is normally doing so on behalf of a larger one of which it is a part, so that the latter, e.g., a nation, benefits in some way.
In the same way as individuals, organisations fulfil their purpose by satisfying their needs, and avoiding their contra-needs. According to the Modified ERG system of needs, based on Maslow’s hierarchy, individual human needs can be categorised and form a hierarchy. The same is true of organisations. A comparison of an individual’s needs and an organisation’s needs is given below.
Within these general categories of need, there are, of course, numerous specific needs.
An organisation also has contra-needs. These are the reverse of its needs, i.e., its demise rather than its existence, poor rather than good relationships with others, or decline rather than growth.
Maslow explained that individuals must satisfy needs lower in the hierarchy and ensure that this satisfaction is sustained before effort is expended on higher needs. Similarly, we must also avoid contra-needs and ensure that this avoidance is sustained. He did, however, qualify this by referring to degrees of relative satisfaction. It is not the case, he argued, that a need only emerges when those lower in the hierarchy have all been fully satisfied. Rather we are usually in a state where all our needs are, to a greater or lesser degree, only partially satisfied. Furthermore, the level of satisfaction of our needs tends to decrease as we ascend the hierarchy. A higher need may not be apparent at all if lower needs are not adequately satisfied. However, it will emerge by degrees as their level of satisfaction increases.
A similar principle applies to organisations. All organisations have a purpose, and this purpose cannot be pursued if the organisation ceases to exist. Thus, the continued existence of the organisation must always take priority over other needs.
Because the function of an organisation normally requires inputs from others, and delivers satisfiers to others, relatedness is the next highest priority. These “others” may be:
- Parent or grandparent organisations, i.e., larger organisations to which the relevant one belongs.
- Sibling organisations, i.e., other organisations which also belong to the same parent or grandparent organisation as the relevant one.
- Child organisations, i.e., parts of the relevant organisation. Child organisations may even be individuals.
Relatedness to such “familial” organisations has a greater priority than relatedness to non-familial ones. Without co-operation between them, the relevant organisation’s function is in jeopardy.
Relatedness to non-familial organisations is also important, but such relationships are usually more easily replaced.
An organisation needs to grow. This can comprise growth in physical size or improvements in the exercise of its function. Once an organisation has established an ability to carry out its function, it can commit resources to improving its processes, extending its function, or enlarging the number of beneficiaries. Growth in physical size is, however, constrained by communication within the organisation. As an organisation grows the people within it become ever more specialised, and this improves efficiency. However, co-ordination of their activities becomes ever more necessary. Communication must increase, therefore. However, the effort involved in doing so and the increased risk of miscommunication reduces efficiency. There is, therefore, an optimum size of organisation at which efficiency is greatest, and to either side of which efficiency decreases.