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Difference between organization and institution


it means a systematic gathering of people, with a common goal and identity associated with an external environment, such as a business entity or a government department. often misunderstood with the institution, which includes an entity, with a high degree of sustainability, which can be seen as an indispensable part of the great society or community.

The term institution commonly used for the place of knowledge, that is, an entity that provides information or imparts education to those in need. On the other hand, an organization can be any entity established to fulfill the commercial, social, political or other purpose.

The article presented will clarify your understanding of the difference between organization and institution, so take a reading.

Comparative graph

Basis for comparisonInstitution Organization
Sense An organization a group of people who come together to pursue a common goal, led by a person or a group in this regard. An institution described as a form of organization, established for an educational, religious, social or professional cause.
Administration Centralized or decentralized decentralized
Determinant factor Rules and regulations Customs and values
Existence It has a life cycle. long lasting
Purpose Earn money or provide services to members, etc. To provide knowledge to people.

Definition of Organization

An organization used to indicate a group of people, committed to chasing after set goals or sets of goals. Indeed, a social system that verifies all the formal relationships between activities and members.

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

It incorporates the specialization and coordination of workers' activities, in which roles, responsibilities and authority are assigned to members, to carry out activities efficiently. It includes both the profit and the non-profit enterprise. There are two types of organizational structure:

  1. Formal organizational structure
    • Line organization
    • Functional organization
    • Personnel line and organization
    • Project management organization
    • Matrix organization.
  2. Informal organizational structure

Definition of Institution

The term institute can be defined as a receptive organization, which arises as a result of social needs and pressures. a part of a great society or community that looks ahead in nature.

It performs those functions and activities that add value to the general public. It has a high degree of resistance which leads to constant growth, the ability to survive and to adapt the various pressures and stresses to move towards the future together with the effect on the environment to which the institution belongs.

The internal structures of the institution exhibit and protect the rules and values ??frequently held by society. It plays the role of change that induces and changes protective agent, which protects positive values ??and creates new ones that are necessary for the sustenance of society.

Key differences between organization and institution

The differences between organization and institution are explained below:

  1. An organization a systematic collection of people, working together to reach the desired end, under a common identity. Conversely, an institution is a establishment, which is dedicated to the promotion of a specific cause that can be educational, professional, social, etc.
  2. The structure of an organization can be centralized – where the power in the hands of the supreme authority, or decentralized – where the power disseminated. At the other extreme, an institution has a decentralized structure, in which the power spread to various levels of management.
  3. An organization governed by rules, regulations and policies, while customs and values ??are the regulatory factors of an institution.
  4. An organization has a certain life cycle, that is, they have birth, growth, maturity and decay. On the contrary, an enduring institution in the sense that it has the capacity to constantly grow, to overcome capacities and adapt to extreme conditions, to take a step towards the future.
  5. The main purpose of an organization to earn money or provide services to members. On the other hand, the main objective of an institution is to impart instruction or knowledge to users.


All institutions are organizations in the first place, as the first step in the institution building process. There are only a handful of organizations, which survive, grow and adapt to achieve institution status. The main objective of an organization to maintain the internal order of the organization together with the effectiveness in achieving the desired goals. However, when it comes to the institution, it goes beyond the organization's goals.