Organization planning is the process of defining and grouping the activities of the enterprise so that they may be most logically assigned and effect… - Ernest Dale

Organization studies usually are devoted to the study of large-scale enterprise because information about larger companies is generally more widely recorded and more readily available. Because of this, more emphasis needs to be placed on organization planning in the smaller firms. It was at the suggestion of Lt. Colonel Lyndall Urwick that AMA undertook this study of companies of different sizes, as a means of improving our knowledge of organization—a field in which he has made major contributions. Many of the larger companies face small-scale problems in their subsidiaries and small units. However, those starting work in the large firm find it difficult to visualize the evolutionary process on which their company's present operation is based. Therefore, it may be of interest even for large companies to study the various stages of growth, up to and including, of course, their own present stage of development.

The administrative unit that usually covers the company as a whole as well as all Its plants is broken Into smaller administrative units — often on a geographical or product basis. Each is headed by a manager who may be compared to the head of a smaller enterprise. Usually he has fairly complete control over basic line functions; if he also has staff services, such as accounting, engineering, research, and personnel. the unit may be largely self- contained.

The functions or job contents necessary to reach objectives must be defined. This step is governed by two precepts.