Difference Between Enterprise and Organization

By Aaron Charles

The terms "enterprise" and "organization" may almost appear as identical twins with indistinguishable features. But when looking closer, you can see slight differences that justify separate places in the dictionary and in your vocabulary. Understanding these differences also complements a comprehension of the business world, which contains widely varied activity.

Etymology and Definition

Both words stem from Latin, with enterprise coming from "interprensus" and organization coming from "organizatio," according to Dictionary.com. While both words signify structure and order, enterprise carries a stronger sense of action, as "interprensus" literally means grasped or seized. In contrast, organization emphasizes structure more than action. By definition, an organization means a group of persons organized for some end or work, be it an association or non-profit organization. Enterprise defines an undertaken project, being especially important or difficult, and requiring boldness or energy.

Business Considerations

Energetic innovation doesn't specifically describe members of an organization, but it does regarding those in an enterprise, who typically have an entrepreneurial spirit. The book "Enterprise: Entrepreneurship and Innovation" mentions Bill Gates, Richard Branson and Bill Dyson as examples of charismatic individuals who commercialize new ideas and manage their own organizations. While these individuals did or do indeed manage organizations, their progressive thinking and actions further characterize their companies as enterprises, with management and employees creating and implementing new ideas. Thus, the book cites "enterprising behavior" that enhances an organization, along with the entrepreneurs, employees and volunteers within it.

International Distinction

Sometimes distinguishing between an enterprise and organization may be difficult. The United Nations' Food and Agriculture Organization (FAO) has characteristics of an enterprise, but still differs from Winrock International's Community Food Enterprise (CFE). While the FAO aids global hunger relief by providing education and a neutral forum for U.N member discussion, the CFE acts more directly with local communities to help relieve hunger, being partially funded by the Bill and Melinda Gates Foundation and the W.K. Kellogg Foundation.

Historical Example

As an example of how differently the two terms can be in a given context, take the United States Navy, which constructed the first nuclear-powered aircraft carrier in 1952 and named the ship the USS Enterprise. This name represented the continuing struggle to retain American justice, liberty and freedom, according to the Department of the Navy. Had the ship been named the USS Organization, it would not have born the same meaning.

Additional Definition for "Enterprise"

Dictionary.com cites a secondary definition for the term "enterprise," with that being a company organized for commercial purposes, or a business firm. This definition further differentiates an enterprise from an organization, since an organization might not participate in commercial activity, while an enterprise typically does.