Company vs. Organization: Know the Difference
By Shumaila Saeed || Updated on December 25, 2023
A company is a business entity formed for commercial activities, while an organization is a broader term encompassing any group with a common purpose.
Key Differences
A company is typically a commercial business entity established to sell goods or services for profit. It operates within a specific industry and is characterized by its business model, ownership structure, and financial objectives. An organization, however, refers to any group or structure that is formed to achieve collective goals. It can be a business, a nonprofit, a charity, a government body, or any other type of group.
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In terms of structure, a company is often structured with a clear hierarchy, defined roles, and a focus on efficiency and profitability. It usually involves shareholders, a board of directors, and employees, each with specific responsibilities. An organization, on the other hand, may have various structures, from hierarchical to flat or even informal, depending on its purpose and size. Its structure is more flexible and can range from a small community group to a large multinational entity.
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From a legal perspective, a company is a distinct legal entity, separate from its owners, with legal rights and obligations. It can enter into contracts, own assets, and be liable for its debts. An organization, in contrast, may or may not be a separate legal entity. For example, a grassroots movement or informal club would not have legal status, while a registered charity or corporation would.
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The objectives of a company are generally centered around profit and growth, striving to maximize value for its shareholders. Its success is often measured in financial terms, such as revenue, profit, and market share. Organizations have a wider range of objectives, which could include social, educational, charitable, or political goals. Success for these entities is measured by their effectiveness in achieving their specific missions.
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In terms of culture, companies often foster a culture aimed at competition, innovation, and performance, reflecting their commercial objectives. Organizations, given their diverse nature, can have a wide range of cultures, from service-oriented in nonprofits to collaborative in community groups, reflecting their varied purposes and goals.
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Comparison Chart
Purpose
Primarily focused on profit-making and business.
Can be for profit, non-profit, or other purposes.
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Legal Status
Legally recognized as a distinct entity.
May or may not have a separate legal identity.
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Structure
Typically has a defined hierarchical structure.
Structure can vary widely.
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Objectives
Focused on financial goals and shareholder value.
Goals vary from social to educational, etc.
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Measurement of Success
Success measured in financial terms.
Success measured by goal achievement.
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Company and Organization Definitions
Company
An association of people for commercial purposes.
The company has grown to become a leading player in the market.
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Organization
A group of people with a particular purpose, such as a business or government department.
The organization has been instrumental in local community development.
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Company
A legal entity separate from its owners, with its own rights and responsibilities.
The company filed for a patent on its new invention.
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Organization
A body that is structured and managed to meet a need or pursue collective goals.
The organization has a global presence in over 30 countries.
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Company
A commercial business.
The company announced record profits this quarter.
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Organization
An entity that coordinates the efforts of individuals to achieve objectives.
The organization hosted a charity event for disaster relief.
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Organization
The act or process of organizing
The organization of the photos did not take long.
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Company
One's companions or associates
Moved in fast company.
Is known by the company she keeps.
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Organization
The state or manner of being organized
The organization of the files could be improved.
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Organization
A manner of accomplishing something in an orderly or efficient way
Your project was hampered by your lack of organization.
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Company
The state of friendly companionship; fellowship
Was grateful for her company.
Friends who finally parted company.
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Organization
A group of persons organized for a particular purpose; an association or business.
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Organization
The administrative personnel of such a structure
Contacted the organization with his complaint.
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Company
A partner or partners not specifically named in a firm's title
Lee Rogers and Company.
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Organization
(uncountable) The quality of being organized.
This painting shows little organization at first glance, but little by little the structure becomes clear.
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Organization
(uncountable) The way in which something is organized, such as a book or an article.
The organization of the book is as follows.
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Company
A subdivision of a military regiment or battalion that constitutes the lowest administrative unit. It is usually under the command of a captain and is made up of at least two platoons.
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Organization
(countable) A group of people or other legal entities with an explicit purpose and written rules.
In response to the crisis, the nations in the region formed an organization.
If you want to be part of this organization, you have to follow its rules.
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Organization
(countable) A group of people consciously cooperating.
Over time, the spontaneous movement had become an organization.
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Organization
(baseball) A major league club and all its farm teams.
He's been in the Dodgers' organization since 2003.
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Organization
The act of organizing; the act of arranging in a systematic way for use or action; as, the organization of an army, or of a deliberative body.
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Organization
That which is organized; an organized existence; an organism
The cell may be regarded as the most simple, the most common, and the earliest form of organization.
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Company
A group of individuals who work together for a common purpose.
A company of actors.
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Organization
A group of persons associated together for a common purpose and having a set of rules which specify the relations of the individual members to the whole gorup.
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Company
(military) A unit of approximately sixty to one hundred and twenty soldiers, typically consisting of two or three platoons and forming part of a battalion.
The boys in Company C
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Organization
The manner in which something is organized; the relations included in an organized state or condition; as, the organization of the department permits ad hoc groups to form.
What is organization but the connection of parts in and for a whole, so that each part is, at once, end and means?
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Company
A unit of firefighters and their equipment.
It took six companies to put out the fire.
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Organization
An organized structure for arranging or classifying;
He changed the arrangement of the topics
The facts were familiar but it was in the organization of them that he was original
He tried to understand their system of classification
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Company
An intelligence service.
As he had worked for the CIA for over 30 years, he would soon take retirement from the company.
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Organization
The persons (or committees or departments etc.) who make up a body for the purpose of administering something;
He claims that the present administration is corrupt
The governance of an association is responsible to its members
He quickly became recognized as a member of the establishment
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Organization
The act of forming something;
The constitution of a PTA group last year
It was the establishment of his reputation
He still remembers the organization of the club
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Company
(legal) An entity having legal personality, and thus able to own property and to sue and be sued in its own name; a corporation.
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Organization
The act of organizing a business or business-related activity;
He was brought in to supervise the organization of a new department
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Company
(business) Any business, whether incorporated or not, that manufactures or sells products (also known as goods), or provides services as a commercial venture.
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Organization
The activity or result of distributing or disposing persons or things properly or methodically;
His organization of the work force was very efficient
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Company
(uncountable) Social visitors or companions.
Keep the house clean; I have company coming.
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Organization
An ordered manner; orderliness by virtue of being methodical and well organized;
His compulsive organization was not an endearing quality
We can't do it unless we establish some system around here
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Organization
A structured group of people working together to achieve specific goals.
Her organization focuses on environmental conservation.
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Organization
Any group that is formed for business, social, cultural, or other purposes.
The organization is dedicated to promoting arts in the community.
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Company
The state of being a companion or companions; the act of accompanying; fellowship; companionship; society; friendly intercourse.
Evil company doth corrupt good manners.
Brethren, farewell: your company alongI will not wish.
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Company
A companion or companions.
To thee and thy company I bidA hearty welcome.
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Company
An assemblage or association of persons, either permanent or transient.
Thou shalt meet a company of prophets.
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Company
Guests or visitors, in distinction from the members of a family; as, to invite company to dine.
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Company
Society, in general; people assembled for social intercourse.
Nature has left every man a capacity of being agreeable, though not of shining in company.
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Company
An association of persons for the purpose of carrying on some enterprise or business; a corporation; a firm; as, the East India Company; an insurance company; a joint-stock company.
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Company
Partners in a firm whose names are not mentioned in its style or title; - often abbreviated in writing; as, Hottinguer & Co.
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Company
A subdivision of a regiment of troops under the command of a captain, numbering in the United States (full strength) 100 men.
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Company
The crew of a ship, including the officers; as, a whole ship's company.
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Company
The body of actors employed in a theater or in the production of a play.
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Company
An institution created to conduct business;
He only invests in large well-established companies
He started the company in his garage
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Company
Organization of performers and associated personnel (especially theatrical);
The traveling company all stayed at the same hotel
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Company
The state of being with someone;
He missed their company
He enjoyed the society of his friends
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Company
A band of people associated temporarily in some activity;
They organized a party to search for food
The company of cooks walked into the kitchen
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Company
A social gathering of guests or companions;
The house was filled with company when I arrived
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Company
A social or business visitor;
The room was a mess because he hadn't expected company
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Company
A unit of firefighters including their equipment;
A hook-and-ladder company
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Company
Crew of a ship including the officers; the whole force or personnel of a ship
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Company
A business entity formed to engage in commercial, industrial, or professional activities.
She launched a tech company specializing in AI solutions.
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Company
An organization engaged in trade of goods, services, or both.
His company specializes in organic food products.
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Repeatedly Asked Queries
What is the primary goal of a company?
The primary goal of a company is usually to make a profit and grow its business.
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Can a non-profit be considered a company?
A non-profit can be structured as a company, especially if it's legally registered and operates in a business-like manner.
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Is every organization a company?
No, not every organization is a company. Organizations can be non-profits, charities, or government entities.
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Does an organization always have a legal structure?
Not always. Some organizations, like informal groups, don't have a legal structure.
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How do the objectives of companies and organizations differ?
Company objectives are usually financially driven, while organizations can have diverse goals including social, cultural, or educational.
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What defines a company?
A company is defined as a legal entity engaged in business activities, typically aiming for profit.
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Can a company exist without being part of an organization?
Yes, a company can exist independently, as it is a type of organization itself.
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What is the main difference between a company and an organization?
The main difference lies in their purpose: companies are primarily profit-oriented, while organizations can have various purposes.
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What is the role of shareholders in a company?
Shareholders are the owners of a company and have a stake in its profits and losses.
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Can a company be part of an organization?
Yes, a company can be a part of a larger organization, such as a corporation or conglomerate.
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Are the terms company and organization interchangeable?
No, they are not always interchangeable as they imply different structures and purposes.
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Can an organization be for-profit?
Yes, some organizations are for-profit, like commercial companies.
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How do the management structures differ between companies and organizations?
Companies typically have a hierarchical structure, while organizations can vary from flat to hierarchical.
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What is the legal liability of a company?
A company, being a separate legal entity, is liable for its actions, debts, and obligations.
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What drives innovation in companies and organizations?
In companies, innovation is often driven by market competition and profit motives, while in organizations, it may be driven by mission and purpose.
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Do all organizations have employees?
Not necessarily. Some organizations, like volunteer groups, may not have paid employees.
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Is the culture within companies and organizations different?
Yes, the culture can vary significantly depending on the entity's purpose and structure.
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Can a company change its organizational structure?
Yes, a company can change its structure to adapt to growth, market changes, or strategic shifts.
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Can an organization operate globally?
Yes, organizations, including companies, can operate on a global scale, depending on their objectives and resources.
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Nov 10, 2023
How does public perception differ between companies and organizations?
Public perception can vary, often seeing companies as profit-driven and organizations as purpose-driven.
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Nov 10, 2023
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About Author
Written by
Shumaila SaeedShumaila Saeed, an expert content creator with 6 years of experience, specializes in distilling complex topics into easily digestible comparisons, shining a light on the nuances that both inform and educate readers with clarity and accuracy.
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