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The Organizational Environment
We have examined the economic and social environments of work. Now we will continue with an exploration of the organization.
Organizations may be classified as:
- private for-profit
- public for-profit
- not-for-profit or
- government entities
The legal classification of an organization will most likely affect its financial capabilities and accounting practices. For example, a large, public company is under the scrutiny of the Security & Exchange Commission which interprets and enforces the government’s laws, adding to the complexity of reporting executive compensation.
Outside of executive compensation, the classification of an organization may have only a minor effect on compensation and benefits administration, and the factors that are important include an organization's:
- budget
- competitors
- size
- age
- structure
- degree of centralization
- members
- compensation policy
We will now examine these factors one by one.