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NORTHLINK
TECHNOLOGICAL COLLEGE
LEARNING MATERIALS 1.2
Subject: Organization and Management

MESSAGE FROM ________________

Good day! How are you doing? I hope everyone is fine. So are you ready to learn? I
know you are. So on this session, you will understand the nature, types, and forms of
Organizations. Specific objectives are as follows:

Objectives:
At the end of this session, you are expected to be able to:
1. Discuss the meaning of organization;
2. Differentiate the types of organizations by main purpose;
3. Differentiate the forms of business organizations; and
4. Discuss he nature of organizations.

Please be guided with the following:

 First, read Information Sheet 1.2: Nature, Types, and Forms of

Organizations
a. What is an Organization?
b. Types of Organization
c. The Nature of Organizations as Open Systems

 Second, perform Course Activity 1.2

Just in case you have questions, you may send it through our GROUP CHATBOX or
thru text messaging at ________.

Reference: Quero, Rachel A. (2017). DIWA Senior High School Series: Organization and Management

Northlink Technological College

Learning Materials on Organization and Management
Developed by: Kimberly O. Lirazan, LPT/Renz Murphy C. Acas, LPT
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Information Sheet 1.2:

Nature, Types, and Forms of Organizations

Previously, you have encountered the nature and different functions of management,
as well as its components and such. In this section, you will learn the nature, types,
and forms of organization in order for you to be well-versed with its components. This
will help you get a bigger picture whenever you create an organization and will also aid
you to become a well-performing manager in the future. This section also provides the
information that will help you understand the nature of management because
organization provides the backdrop or management settings.

What is an Organization?

Organization is defined as a social setting composed of several groups of people who

bond and work together to achieve a common purpose (Schermehorn, 2011).
Organizations are established by people with common interests. In line with their
common interests, and purpose, these people perform the management process of
planning, organizing, leading, and controlling. This is why the study of organizations
and management are closely intertwined.

Types of Organizations

One way to categorize organizations is in terms of the main purpose for which they
were created. By the nature of their main purpose, organizations may be classified into
government organizations, private organizations, and nongovernmental organizaitons.

Types of Organizations in the

Philippines Based on Main
Purpose

Private Organizations Nongovernmental

Government Organizations
(business enterprises, Organizations (civil society
(national and local agencies)
business associations) groups, foundations)

These are the types of organizations:

Reference: Quero, Rachel A. (2017). DIWA Senior High School Series: Organization and Management

Northlink Technological College

Learning Materials on Organization and Management
Developed by: Kimberly O. Lirazan, LPT/Renz Murphy C. Acas, LPT
 Page 3

1. Government organizations – these may be in the form of national

government agencies or local government agencies/units (LGUs).
National government agencies are mandated by law to perform specific
duties and responsibilities and provide services for people nationwide. LGUs
are also mandated by law to perform specific duties and provide services but
only for people within their respective areas of jurisdiction and responsibilities.
2. Private organizations – these may be subcategorized into business
associations which promote the interests of the industry players or business
enterprises which earn profits. An example of a business association is the
Philippine Chamber of Commerce and Industry. Business enterprises, on the
other hand, may be in the form of corporations, sole proprietorship,
partnerships, limited partnerships, and cooperatives.
a. Corporation – a business organization where ownership is through
shares of stock.
b. Sole Proprietorship – a form of business owned by one person only.
c. Partnership – another form of business owned by two or more persons.
d. Limited Partnership – is a form of business also owned by two or more
persons, but with limited liabilities during a financial loss.
e. Cooperative – a form of organization where ownership is equally
shared among members.
3. Nongovernmental Organizations – these may be in the form of civil society
associations, corporate foundations, educational institutions, small
enterprises, or research institutions among others. They exist because they
are effective in delivering services to certain communities that are not
adequately served by national government agencies/unit. Compared to the
previous ones, NGOs have more flexibility in their operations like going to
certain areas to help without any hierarchical approval from the higher
authorities.

An organization may have combined nature. Organizations that are owned and
controlled by the government, but function as business entities, are called government
– owned and – controlled corporations (GOCCs). An example of a GOCC is the
National Food Authority. Given the abovementioned characteristics of different

Reference: Quero, Rachel A. (2017). DIWA Senior High School Series: Organization and Management

Northlink Technological College

Learning Materials on Organization and Management
Developed by: Kimberly O. Lirazan, LPT/Renz Murphy C. Acas, LPT
 Page 4

organizations, a manager must know how to be “savvy” or socially keen to distinguish

which among the organizations truly represent and promote the interests of the people.

Volunteer Organizations
Multisectoral Association

Government
Organizations Multisectoral Services Association

Industry Associations Corporate

Foundations
Private
Organizations NGOs

The Nature of Organizations as Open Systems

As organizations perform management functions in line with their stated

objectives, they operate within an environment described as open systems. A system
pertains to interrelated parts working as a whole to achieve a purpose. Open System
implies a borderless nature organization in relation with its environment. External
factors in the environment, such as market fluctuations, impact on internal operations
of an organization (e.g. production, marketing, human resource management, financial
control). In turn, the internal processes of an organization interact with and adjust to
the external environment.
Organizations, therefore, exist in a dynamic environment where conditions
constantly vary. The dynamic environment allows the organizations to undergo a
continuous process of change and evolve eventually. An organization undergoes a

Reference: Quero, Rachel A. (2017). DIWA Senior High School Series: Organization and Management

Northlink Technological College

Learning Materials on Organization and Management
Developed by: Kimberly O. Lirazan, LPT/Renz Murphy C. Acas, LPT
 Page 5

continuous process of obtaining inputs (e.g. supply materials, technology, and people
as workforce) from the environment. These inputs are used by the organization and
pass through a transformation process (e.g. manufacturing and training) that converts
those inputs into the final desired outputs (e.g. products and skilled staff).

Resource Inputs
Transformation
People Product
Process
Outputs
Materials Activities that
Finished goods
Money convert inputs to
and services
outputs
Technology

Reference: Quero, Rachel A. (2017). DIWA Senior High School Series: Organization and Management

Northlink Technological College

Learning Materials on Organization and Management
Developed by: Kimberly O. Lirazan, LPT/Renz Murphy C. Acas, LPT
 Page 6

Course Activity 1.2

Name:

Set: Contact No.

A. Identify the following descriptions about the topic “Nature, Types, and Forms of
Organizations”. Any form of erasures is NOT ALLOWED! (2 points each)

_______ 1. It is a business organization where ownership is equally shared

among members.
_______ 2. This type of organization is mandated by the law to perform specific
duties and responsibilities and provide services for either people
nationwide or within the respective areas of jurisdiction.
_______ 3. These organizations are owned and controlled by the government but
function as business entities.
_______ 4. It pertains to interrelated parts working as a whole to achieve one
purpose.
_______ 5. It is defined as a social setting composed of several groups that work
towards one goal.
_______ 6. This type of organization is effective in delivering services to certain
communities that are not sufficiently provided/served by national
government agencies.
_______ 7. It implies a borderless nature of organization in relation with its
environment.
_______ 8. It is a form of business owned by one person only.
_______ 9. It is a form of business organization where ownership is through
shares of stock.
_______ 10. This type of organization includes business enterprises, which
promote the interests of the industry players, and business
associations, which earn profits.

Reference: Quero, Rachel A. (2017). DIWA Senior High School Series: Organization and Management

Northlink Technological College

Learning Materials on Organization and Management
Developed by: Kimberly O. Lirazan, LPT/Renz Murphy C. Acas, LPT
 Page 7

B. Answer the questions below briefly. It should be more than 3 sentences but less
than 5 sentences. (5 points each)
1. In thinking about your future job, which type of organization would you prefer to
work with someday: government, private, or NGO? Why?

2. If you’re given a chance to put up a private business organization, which type

would you prefer to build: corporation, sole proprietorship, partnership, limited
partnership, or cooperative? Why?

3. What do you think is the most important trait does a manager should have?

4. Why do you think organizations and businesses must respond timely to various
change in trends?

Reference: Quero, Rachel A. (2017). DIWA Senior High School Series: Organization and Management

Northlink Technological College

Learning Materials on Organization and Management
Developed by: Kimberly O. Lirazan, LPT/Renz Murphy C. Acas, LPT