• Business
  • Finance
  • Banking
  • Education
  • General
  • Law
  • Science
  • IT
  • English

Key Differences

Know the Differences & Comparisons

Difference Between Organization and Institution

Last updated on January 7, 2020 by Surbhi S

organization vs institutionOrganization means a systematically organized collection of people, with a common goal and identity associated with an external environment, like a business entity or a government department. It is often misconstrued with the institution, which encompasses an entity, with a high degree of sustainability, that can be seen as an indispensable part of the large society or community.

The term institution is commonly used for the place of knowledge, i.e. an entity which delivers information or imparts education to those who need it. On the other hand, an organization can be any entity established to fulfil the commercial, social, political or some other purpose.

The article presented to you will clear your understanding on the difference between organization and institution, so take a read.

Content: Organization Vs Institution

  1. Comparison Chart
  2. Definition
  3. Key Differences
  4. Conclusion

Comparison Chart

Basis for ComparisonOrganizationInstitution
MeaningAn organization is an assemblage of people who unite to undertake a common goal, led by a person or a group thereon.An institution is described a form of organization, which is set up for an educational, religious, social or professional cause.
AdministrationCentralized or DecentralizedDecentralized
Governing factorRules and RegulationsCustoms and Values
ExistenceIt has a life cycle.It is long lasting.
PurposeTo earn money, or provide service to the members etc.To deliver knowledge to the people.

Definition of Organization

An organization is used to mean a group of people, engaged in chasing the predetermined goals or set of goals. Indeed, it is a social system that ascertains all formal relations between the activities and the members.

An organization is owned and controlled by one person or a group, who are the members, of the organization itself. The head of the organization is chosen either on a permanent or temporary basis, through voting at the annual general meeting, in which all the members of the organization participate.

It incorporates specialization and coordination of activities of the workers, wherein the roles, responsibilities and authority are assigned to the members, to undertake tasks efficiently. It includes both profit and non-profit undertaking. There are two types of organization structure:

  1. Formal Organization Structure
    • Line Organization
    • Functional Organization
    • Line and Staff Organization
    • Project Management Organization
    • Matrix Organization.
  2. Informal Organization Structure

Definition of Institution

The term institution can be defined as a receptive organization, which comes into being as a result of social needs and pressures. It is a portion of a large society or community, which is forward looking in nature.

It performs those functions and activities that add value to the public at large. It has a high degree of endurance that leads to constant growth, ability to survive and adapt various pressures and pulls in order to move towards the future along with the effect on the environment to which the institution belongs.

The internal structures of the institution exhibit and protects the frequently held norms and values of the society. It plays the role of change inducing and change protecting agent, that protects positive values and create new ones that are required for the sustenance of the society.

Key Differences Between Organization and Institution

The differences between organization and institution are explained hereunder:

  1. An organization is a systematic collection of people, who work together for achieving the desired end, under a common identity. Conversely, an institution is an establishment, that is dedicated to promoting a specific cause that can be educational, professional, social, etc.
  2. The structure of an organization can be centralised – where power lies in the hands of the supreme authority, or decentralised – where the power is disseminated. On the other extreme, an institution has a decentralised structure, wherein power is spread to various levels of management.
  3. An organization is governed by rules, regulations and policies, whereas customs and values are the regulating factors of an institution.
  4. An organization has a certain life cycle, i.e. they have birth, growth, maturity and decay. In contrast, an institution is enduring in the sense that they have the capacity of constantly growing, overcoming ability and adapting itself to extreme conditions, to take a step towards future.
  5. The primary purpose of an organization is to earn money or provide services to the members. As against, the main objective of an institution is to impart education or knowledge to the users.

Conclusion

All the institutions are organizations first, as it is the initial step of the institution building process. There are only a handful of organizations, that survive, grow and adapt themselves to reach the status of the institution. The basic objective of an organization is to maintain the internal order of the organization along with the effectiveness in the achievement of desired ends. However, when it comes to the institution, it goes beyond the goals of the organization.

Related Differences

  • Difference Between Scarcity and Shortage
  • Difference Between Unit Banking and Branch Banking
  • Difference Between Prepaid and Postpaid Connection
  • Difference Between Syntax and Grammar
  • Difference Between Everyday and Every day

You Might Also Like:

formal organizationDifference Between Formal and Informal Organization Difference Between Non-Profit and Not-for-Profit Organization line vs line and staff organizationDifference Between Line and Line & Staff Organization society vs cultureDifference Between Culture and Society Group and TeamDifference Between Group and Team GroupsDifference Between Formal and Informal Groups

Comments

  1. Peter Lau Torst Nielsen says

    October 25, 2017 at 4:34 pm

    Thanks very useful.

    Reply
  2. Lillian says

    October 22, 2018 at 8:17 am

    Very useful, Could you provide any citations?

    Reply
  3. RBrant says

    February 9, 2019 at 11:55 pm

    Yes! Great insight…concur with above comment. Citations would be very helpful!

    Reply
  4. Keith says

    January 28, 2021 at 10:40 am

    Very helpful especially in learning politics.

    Reply
  5. Leona M. Kalima says

    May 14, 2021 at 6:15 am

    When does an organization turn into a institution? What if the agency & /or organization been in operation for 40 years. is a off-shoot of a government structure? Serves a specific ethnicity? Has political influences and legislation? Has granting programs? Not under a union organized entity?

    Reply
  6. Rexcel Cariaga says

    September 28, 2021 at 11:41 am

    Thank you for this!!

    Reply
  7. Patricio says

    April 21, 2022 at 12:29 am

    Excellent, short and clear. Perhaps for a normal person organization and institution are basically the same thing. But for us who are going to be teachers, it is important to understand and be clear about the differences that exist in them.

    Reply
  8. Mai-Ephata says

    September 20, 2022 at 9:18 am

    very educative.

    Reply

Leave a Reply Cancel reply

Your email address will not be published. Required fields are marked *

Top 5 Differences

  • Difference Between PERT and CPM
  • Difference Between Micro and Macro Economics
  • Difference Between Developed Countries and Developing Countries
  • Difference Between Management and Administration
  • Difference Between Qualitative and Quantitative Research

Related Differences

  • Difference Between Scarcity and Shortage
  • Difference Between Unit Banking and Branch Banking
  • Difference Between Prepaid and Postpaid Connection
  • Difference Between Syntax and Grammar
  • Difference Between Everyday and Every day



New Additions

  • Difference Between Speak and Talk
  • Difference Between Economy Class and Business Class
  • Difference Between If and Whether
  • Difference Between Hotel and Motel
  • Difference Between FIR and Chargesheet
  • Difference Between Norms and Values
  • Difference Between Society and Community
  • Difference Between Sourcing and Procurement
  • Difference Between National Income and Per Capita Income
  • Difference Between Departmental Store and Multiple Shops
fb-follow youtube follow

Copyright © 2023 · Key Differences · Contact Us · About Us · Privacy