Organization vs. Firm

Difference Between Organization and Firm

If you have been thinking that organization and firm are same then this article will be very helpful in understanding the difference between the two. Here is a list of differences between the two in terms of structures, formation and their roles.

  1. An organization is a social arrangement which has collective goals and it monitors its own performance while a firm is based on agreement between two or more people.
  2. Different types of firms are law firm, business firms etc while organizations can be non-profit organizations, cooperatives, partnerships etc.
  3. Firm focuses on achieving the targets while organization aims to create beneficial environments for all the people involved.
  4. Leader in a firm can be any one of the partners and if the number of partners is more the leadership is shared while the leader in organization is appointed for taking care of all the managerial activities. He has the power to enforce laws and guide the behavior of the members of the organization.


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