Difference between company and organization

On many occasions, the terms are used organization and company as synonyms, giving them a similar definition. But nevertheless, they both havemarked differences. To gain a better understanding of the differences, it is important to know the definition of each of them.

Business

When talking about a business, refers to an organism made up of different elements, both material and human personnel, with profit, usually they are in charge of rendering a service to the community. A company combines capital and nature to achieve these goals. For example: LG, Samsung, Nestlé, etc ...

Organization

On your side, the organizations are considered more as a established social system to meet various proposed objectives, generally through human resources, or some other type of management that involves people's talent. In other words, it can be considered as a agreement between people in order to achieve a stated purpose.

Many organizations have purposes with aid and contribution purposes. As are the United Nations Organization, the World Trade Organization, the World Tourism Organization, etc ...

What is the main difference?

The differences between an organization and a company, they can be small. However, the one that stands out the most is that the company is a economic organization, with profit-making purposes. However an organization it does not necessarily have an economic purpose, so a group of people can be considered an organization.

An organization can become a business when it becomes a pursuit of economic ends.

Organization types

When it comes to a organization, different types can be seen present as a formal, informal, or social organization.

• The formal organization It is a cooperative action, where everyone collaborates and works together to achieve a more efficient work.
• The informal organizationIt is about the individual reaction by individuals to the formal organization.
• The social organization, refers to a group of people with common objectives, who work formally to achieve the objectives with greater efficiency.

It is also possible to refer to a open or closed organization. Where the open mentions the continuous interaction of elements to achieve the purpose, in conjunction with the environment that allows to strengthen the system. The closed organization for its part, it has little relationship with the external environment, where reasons known as cause and effect are distinguished, which mark the inputs and outputs.

Types of companies

For his part companies can be classified according to different criteria, such as:

• Activity sector: For example, companies in the primary sector (extraction of material), secondary (transformation of raw material), tertiary (services), quaternary (technology and innovation).
• Capital ownership: Refers to private, public, or mixed companies.
• Legal form: Refers to cooperative companies, joint-stock companies, sole proprietorships, or collective companies, etc ...
• Scope of activity: In this group are national and regional companies, among others.
• Size: Regarding size, they can be considered as small companies, micro companies, medium-sized companies, and large companies.