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Main Difference -Institution vs Organization

The words organization and institution are often used interchangeably by many people. Though this usage is not entirely wrong, theoretically, there is a distinct difference between institution and organization. The term organization refers to an organized group of people gathered together to achieve a particular purpose. The term institution can be applied to both a type of formal organization and practices and behavior pattern of a society. The main difference between institution and organization is that institution refers to both abstract and physical entity whereas organization strictly refers to a physical entity.

What is an Institution

In normal practice, the term institution can have several meanings. An institution can refer to an organization for a religious, academic, social or professional purpose. It can also apply to a well-established practice or law. By these meanings, concepts and structures like marriage, family, Church, educational institutes such as universities and colleges, all become institutions. When we look at these institutions, it becomes clear that ‘institution’ is a broad term that includes many definitions.

In sociology, one definition of institution is that institutions are established and stable patterns of behavior that define, govern and constrain action. Another definition denotes institution as a formal social structure that governs a field of action. Thus, it becomes clear that institution can refer to an abstract concept as well as a physical concept.

Sociologists have found out that institutions emerge, develop and function without the conscious intentions of the individuals involved in them. Institutions arise as a result of the necessity to fulfill social roles and expected behavior. For example, the institution of marriage and family are created by the fundamental biological requirement, for reproduction and care of the young.Main Difference - Institution vs Organization

What is an Organization

An organization is an organized group of people brought together for a common purpose. An organization controls it own performance and it has a border that separates it from the outer environment. Thus, the term organization can refer to concepts like businesses, companies, charities, armies, etc. The organization is  associated with physical entities, unlike institution.

In addition, there is a power hierarchy within an organization, and it is centrally administered by this order. It is also governed by rules and regulations.Difference Between Institution and Organization

Difference Between Institution and Organization


Institution is either a type of formal organization or practices and behavior pattern of a society.

Organization refers to an organized group of people gathered together to achieve a particular purpose.

Type of term

Institution is a broad term.

Organization is a narrow term compared to institution.

Abstract vs Concrete 

Institution refers to both abstract and concrete entities.

Organization refers to a physical entity.


Institution is governed by customs and values.

Organization is governed by rules and regulations.


Examples of institutions include Church, marriage, family, Parliament etc.

Examples of organizations include the Army, businesses, charity organizations, schools, etc.Difference Between institution and organization - infographic

Reference: Organization and Institution

Scott, W. Scott. 2008. Institutions and organizations. Thousand Oaks, CA: SAGE.

Image Courtesy: 

“St Mary’s Church, Kyoto” by Hideyuki KAMON – Flickr. (CC BY-SA 2.0) via Commons

“Meiji Yasuda Life Insurance Company Head Office”. (CC BY-SA 3.0) via Wikimedia Commons