National Diploma Year One

National Award/Certificate/Diploma Year One

Information Systems – Lecture 1

Need for Organisations

The society in which we live in is complex and sophisticated. As consumers we demand a variety of goods and services to enable us to maintain the quality of life we enjoy.

In order to satisfy these demands, suppliers must produce the goods and services, which the consumer wants, by combining factors of production such as land, labour and capital in the most efficient manner.

By this we mean producers must hire workers, rent or buy premises, perhaps invest in plant and machinery and purchase raw materials, and then organise the manufacture of the final product in such a way as to make a profit. Society may also gain, as its scarce resources are being used in the way consumers wish rather than being wasted in producing things people do not need. Many public sector organisations also provide goods and services to society and, in the same way as commercial organisations, these public sector bodies must employ staff, occupy premises and raise capital.

The fundamental difference between these two types of organisation lies in the objectives they seek to fulfil. The private sector tends to be motivated by profit, while public sector organisations will often have a much less mercenary motive, such as providing for the public good and improving the state of society.

If we wish to see society ordered and governed in such a way that individuals are free to express their demands and producers are able to meet such wants, it becomes necessary to form organisations to control and regulate society through a variety of administrative structures. These are the bodies which, make up the organisations of the state. In the UK, these are Parliament, the Government and its Executive, the Civil Service, the Local Authorities and the Courts and justice system. These bodies are required to carry out legislative, administrative and judicial functions.

If you examine the nature and range of individual demands in an industrialised society you soon realise that most of them cannot be met other than by organisations. Individually we lack the knowledge, skills and physical resources to manufacture products that fulfil our needs, whether these are simple or sophisticated. It would be as difficult for us to make a biro or floppy disk as it would a television or a computer. Admittedly, an individual working alone can supply some goods and services.

A farmer may be able to grow sufficient food to satisfy himself and his family without help from others. But what if he requires other goods and services?

It is unlikely that the farmer will also have the ability or resources to produce his own combine-harvester or tractor. If he did not have such products which are manufactured by others, his life would be much simpler, but no doubt much harder.

A similar situation exists in the supply of services. A strong and resourceful individual may try to protect himself and his property from the dangers imposed by thieves or vandals. If he cannot, then he may turn to the state to demand protection. Recognising that a failure to respond to such demands from its citizens would lead to an anarchic system, the government must accept the responsibility and establish a legal system incorporating law enforcement agencies to provide the protection being sought.

How, then, are these goods or services?

It is clear that individuals working independently would be unable to meet our complex physical and social needs. Therefore society has developed a system where people join together to form organisations. These bodies are extraordinarily diverse. They manufacture products, which they distribute and sell. They also provide all the services that we need. Thus, both the BBC and Ford Motor Company are organisations, although their products are very different.

Clearly, then, if individuals within society are to have all their various needs satisfied, there must be co-operation between workers. Each must specialise in a certain aspect of the supply process. These workers must be organised and allocated a specific role in which to perform co-ordinated tasks. These tasks are normally organised with the aim of producing a given product or service, although there are some organisations which do not specialise and which make an extremely diverse range of products.

In the private sector of the economy, such businesses will usually have the objective of making a profit for their owners. Of course, this is just one example of an organisation. As we have already noted, the state is another form of organisation which is clearly more complex than a business, and it has a variety of objectives, such as increasing the wealth of citizens, improving their quality of life and protecting them if they are threatened. We are all members of organisations, some of which are formal while others are informal. Your family is an example of an informal organisation, as is the group of friends you mix with. Others more formal organisations to which you belong or may have belonged are the school you attended as a child, your employing body, or your trade union.

Can you think of other organisations that you belong to?

Btec National Year one information systems

Dominique Stainton