Utilitarian Organization – Definition, Meaning and Examples

Definition 

The utilitarian organization is defined as a formal organization where a group or individuals join to receive a monetary reward or any other type of incentive that is offered to the people joining that organization. This is a secondary group which is large and based on temporary and impersonal relationships.

What is a Utilitarian organization?

The utilitarian organization is also referred to as a remunerative organization. It is one of the three divisions of a formal organization that is structured in a definite way to complete the goals and objectives of an organization in the most effective manner.

The control in these type of organizations is maintained through bartering system as both the involved parties have something to gain through the association. The two main elements of a utilitarian organization are purpose and productivity because the members are compensated through benefits and incentives for their contributions to the cause.

There is some affinity in a utilitarian organization which offers tangible benefits and a contractual type of membership.

Examples of utilitarian organization

Colleges, universities are prominent examples of the utilitarian organization where the students have to pay hefty amounts as fees to gain knowledge and skills that will benefit them in their career in later days.

Another example of the utilitarian organization is a business organization where an employee works in a company for the salary he receives as compensation. People who work for income are members of the utilitarian organization. Large organizations hire employees so that their organizational goals can be fulfilled and dole out wages and salaries in place of the hard work that the employees are put through

An internship is a prime example of a utilitarian organization where individuals join a company or a brand to learn the primary ways to handle themselves in a professional environment. The successful internship tenure opens doors for further opportunities, and this is why it is an all-time favourite of students that have just passed out and want to try their hands at an internship before joining the company of their dreams.

There are a few specific premises for utilitarianism to determine the validity of the action that is taken. For instance

• Action is correct if the outcome of what is considered good over evil triumphs
• Happiness is the only reasonable outcome that should be possible in this type of structure
• If the action is unable to maximize the level of joy, then it should conspire the incorrect or poor choice even if it is a moral choice

The utilitarian organization based on the premises, as mentioned above, suggests that happiness is always good for an individual. If one finds an opportunity to increase it, then he should grab it with both hands.

The utilitarian based approach by managers in an organization

The managers in an organization generally adopt either a virtue-based, positive/negative or a consequence approach.

If the manager adopts a utilitarian approach, also known as a consequence-based approach, then he has to look at all the other choices that are possible for taking a specific type of action. What are the consequences of taking this action versus the one you are leaving behind has to be considered very thoroughly to determine which action is most suitable?

Suppose a neighbourhood area is organizing a cricket match of two local teams. Then, in this case, the manager who is responsible for such events will first try to understand whether organizing the event is productive or cancel it for any other activity. What are the positives in this scenario? The neighbourhood is going to be happy with the event as everyone in the community will enjoy it. The organization will be able to make money, but what about any risks from the event. For instance, what happens if someone is injured or any damage to any property or the event creates noise population. It is the manager’s call to weigh whether the positives outweigh the negatives and will ultimately benefit society or not.

The advantage of using a utilitarian-based approach by the manager in the above case-example is that it will offer a popular form of entertainment and bring in more money because of large crowds. The disadvantage of using a utilitarian approach is that it will disregard the right of the minorities who are not in favour of the event.

Advantages

The advantages of the utilitarian organization are as follows-

1. Loyalty 

In a utilitarian organization, the commitment level of the members is much higher than any other kind of formal organization. The work environment in this type of organization is optimistic, and the people are willing to work to achieve the desired success.

There is a sense of duty and commitment towards the organization that will ultimately fulfil their desires, and this thought gives the members an extra push to work diligently.

One of the most important benefits of a utilitarian organization is the loyalty of its members that sees high retention rates, excellent attendance and better levels of productivity and efficiency

2. Sense of belonging and purpose 

Utilitarian organization gives a sense of belonging and purpose to its members because everyone has joined the group for a reason. Shared tasks, projects, objectives, mission, vision and goals give momentum to their cause that helps in fulfilling the purpose effectively.

The members are rewarded for their participation through wages and salaries.

3. Easily understood concept

The goal of minimizing harm and sadness from life and replacing it with a constant supply of happiness is a common feeling that you will find in the majority of people.

Every human being pursues the concept of being happy and joy throughout his life because he does not want to live a life of unhappiness, pessimism and misery. The utilitarian organization helps in creating, building and developing a society that puts its onus on concrete actions that will felicitate happiness

4. Tangible benefits

Not everyone can work for the good of society or other individuals. Money is an excellent motivator in normal circumstances, and it is a utilitarian organization that encourages members to join such groups and fulfil their dreams by earning enough money.

5. Secular process

Utilitarianism is considered a secular process that will benefit one and all that is associated with these types of organizations.

6. Follows democratic principles

Utilitarian approach encourages individuals to adopt democratic principles to find the right kind of balance. When the majority favour a specific action, then it signifies the maximum chances of being productive and bringing happiness in everybody’s life.

7. Common goals 

In a utilitarian organization, all the involved parties are working for a common goal. The organization is interested in reaching its organization objectives, tasks and projects within the set deadlines and the employees who are working in that organization are interested in earning the maximum amount as salaries and incentives.

It is a win-win situation for both the involved parties as they both have something concrete to gain from the association

8. Balanced and voluntary involvement

Individuals join the utilitarian organization voluntarily no doubt, but they have their expectations and know that it will be fulfilled through the association. Members are paid to join the group, and their participation level in all activities is much higher.

9. Greater involvement

Utilitarian organization is a voluntary group where members join the organization because they want to and because they are paid to do so. For this reason, their participation level in all activities is much higher.

The members want their organization to reach its goal and are willing to work extra to the best of their abilities so that they can make a difference to the relevant goal and objective.

10. Greater mobility 

There is greater mobility in a utilitarian organization because the organization can count on the collective power of its members to accomplish their goals easily. These members are agile and mobile because the incentives and benefits along with salary nudge them to move forward and achieve the aligned goals of the individual as well as the organization.

For instance, when you are a part of the utilitarian organization, and there is a deadline looming around the corner all the team members that have the responsibility of that project will start giving their best and work overtime to complete the task in a given time.

No one is forcing them to do so, but they understand their responsibility and know that it could harm their salary.

Disadvantages

The disadvantages of the utilitarian organization are as follows-

Interpersonal relationship 

Utilitarian organization encourages the interpersonal relationship. The organization hires employees for a definite purpose, and the employees are connected with it because of the salaries they will be earning which will help them to meet their personal goals.