The next level of analysis is the organization itself. An organization is a collection
of groups or departments that combine into the total organization.
Organizations themselves can be grouped together into the next higher level
of analysis, which is the inter-organizational set and community. The inter-
organizational set is the group of organizations with which a single organization
interacts. Other organizations in the community make up an important part of an
organization’s environment.
Organization theory focuses on the organizational level of analysis, but with
concern for groups and the environment. To explain the organization, one should
look not only at its characteristics but also at the characteristics of the environ-
ment and of the departments and groups that make up the organization. The focus
of this book is to help you understand organizations by examining their specific
characteristics, the nature of and relationships among groups and departments that
make up the organization, and the collection of organizations that make up the
environment.
Are individuals included in organization theory? Organization theory does consider the behavior of individuals, but in the aggregate. People are important, but
they are not the primary focus of analysis. Organization theory is distinct from
organizational behavior.