Organizational theory is a sociological study of the structures and operations of formal social organizations, including companies and bureaucratic institutions. It seeks to explain how interrelated units of organization either connect or do not connect with each other, and how groups of individuals behave, which may differ from the behavior of an individual. Organizational theory covers both intra-organizational and inter-organizational fields of study. As people implemented organizations over time, many researchers have experimented as to which organizational theory fits them best. The theories of organizations include bureaucracy, rationalization (scientific management), and the division of labor.

Organizational theory is focused on understanding how organizations work, why they come to be structured in particular ways, and why some organizations are more successful than others. Researchers have addressed those questions by employing a variety of units of analysis. One strand of research examines individual organizations, looking at how internal structure or organizational culture affects performance. Other research looks at entire populations of organizations, using statistical tools to see how a population changes over time as some organizations fail and others succeed.

Organizational theory can also help give us an idea of how organizations might cope with rapid change. It is a multidisciplinary field of research, primarily concerned with explaining organizational structure, performance, and survival. The ability of societies to respond to various problems depends on the availability of organizations with different capabilities, and organizational design is important in this regard.