EXISTENCE OF ORGANIZATION

                    There is always a greater value for the goods and services provided by the people working in groups rather than the individual efforts. There are five major reasons that makes the existence of organizations and they are as follows:

To increase the specialization and division of labour:
Division of labour increases the number of specializations that are being performed by the organization and the specialization makes the individuals to become experts.

To use large scale technology
Economies of scale : The savings that are made when the goods and services are produced in large volume
Economics of scope : under utilization  of resources in a effective manner

To manage external environment:
As the organizations regularly exchange the goods and services for the resources needed by them, they need to manage the external environment that consists of political, social, economical and technological factors.

To exert power and control:
Members of the organizations are structured effectively and efficiently to produce products and services.

To economize on the transaction costs:
The costs associated with negotiating monitoring and governing the exchanges between two people.

VALUE CREATION IN ORGANIZATION

                   In the Organization, the value creation is the process by which the self interest and ambition of the individuals can be managed in such a way that increases the value added outcome. Values Contribute to the shared meaning in the organization. Contribute to the Vitality and the performance of the organization. There are two steps involved in Value creation. The first one is to create values that are aligning to the values of employees and the second one is to find out how the employees perceive to the values of the organization.

                  There are three stages in which a value is created among the organization. They are Input stage, conversion stage and the output stage. Each stage is affected by the set of forces and conditions that operate beyond the organization's boundaries which is also called as environment.The inputs for the organizations might be
* Raw Materials
* Money and Capital
* Human Resource
* Information and Knowledge
* Customers of service Organization

In the conversion process, the values are added to the inputs. They might be
* Machinery
* Computers
* Human Skills and Ability

The Organization releases the output to the environment in the form of
* Finished goods
* Services
* Dividends
* Salaries
* Value for stakeholders

Sales of Outputs allows organizations to obtain new Supplies of Inputs and the Environment that helps in deciding these inputs,conversion process and outputs are as follows:
*Customers
* Shareholders
* Suppliers
* Distributors
* Government
* Contributors.