An organization that is based on pure rationality ignores many facets of human nature. - Ernest Dale

Organization planning is the process of defining and grouping the activities of the enterprise so that they may be most logically assigned and effectively executed. It is concerned with the establishment of relationships among the units so as to further the objectives of the enterprise.

In some cases the changes may represent just one part of a general improvement program. Such steps as the following, for example, will generally affect the organization structure:

The major problems of organization can perhaps best be studied in dynamic terms, i.e., as they arise and change with the evolution of the company. In this dynamic setting the causes and nature of organization problems can be recognized most easily. Each major problem can be analyzed at the stage of the company's growth when it typically arises, when there are few complications and the organizational problem is centered about just one factor or change in the company's mode of operation. Just as it is easier to study the workings of democracy as they arise in one of the small towns of New England rather than in the United States as a whole, so it appears to be desirable, in dealing with a subject of such scope as organization, to isolate and study the major problems individually.