NOTE: Although the following article has not been revised for this edition of the Encyclopedia, the substantive coverage is currently appropriate. The editors have provided a list of recent works at the end of the article to facilitate research and exploration of the topic.

Societies carry out many of their activities through formal organizations. Organizations are units in which offices, or positions, have distinct but interdependent duties. Organizations—hospitals, schools, governments, business firms—share certain features. Usually, at least one of the offices serves as the linchpin: It coordinates the separate duties within the organization. The key office has ultimate authority in that the orders it issues constrain the actions of lower-level offices.

But organizations also differ from one another. In some, the assets belong to particular individuals. In others, ownership resides in a collectivity. The latter represents a corporate organization or corporation. Three features describe...