Why do we need organisations?
Organisations can achieve results that cannot be produced by individuals on their own. This is because organisations enable people to:
§ share skills and knowledge
§ specialise and
§ pool resources.
As the organisation grows it will reach a size where goals, structures and control procedures need to be formalised to ensure that objectives are achieved.
These issues are discussed in further detail below.
Illustration 1 – The nature of organisations
When families set up and run restaurants, they usually do not have to consider formalising the organisation of their business until they have five restaurants. After this stage responsibilities have to be clarified and greater delegation is often required.
