Many private companies, universities, non-profit organisations and government agencies also have an ombudsman (or an Ombuds office) to serve internal employees, and managers and/or other constituencies. These ombudsman roles are structured to function independently, by reporting to the CEO or board of directors, and according to International Ombudsman Association (IOA) Standards of Practice they do not have any other role in the organisation. Organisational ombudsmen often receive more complaints than alternative procedures such as anonymous hot-lines.

The concept of Ombudsman at first originated in Sweden, a Scandinavian state, in 1809 more than two centuries ago. It is important to recognize that in the first decade of the twenty-first century many new Ombudsman/person roles have been established by a wide variety of governments as well as private and public sector organizations. An Ombudsman assists with the fair and expeditious resolution of complaints in an impartial, confidential and independent manner. Ombudsman is not a representative of the person raising the complaint or the organization being complained about. Depending on how it is has been established, Ombudsman/person roles include:

• The use of informal resolutions for complaints using tools like mediation, negotiation and shuttle diplomacy.
  
  
• The use of Inquiries and structured investigations to determine whether a complaint is founded along with the ability to make recommendations to correct unfair situations, both in individual cases and to address systemic issues.
  
  
• Assistance with resolving complaints through advice, referral and discussion and by exploring available options.
  
  
• Looking for trends and patterns in complaints to identify and make recommendations to address potential systemic issues and seek system-wide improvements to influence positive changes.
  
  
• They are committed to achieving redress for the individual, but also, where they identify systemic failings, to seek changes in the work of the bodies in their jurisdiction, both individually and collectively.
  
  
• They can generally undertake a single investigation into multiple complaints about the same topic, thus avoiding duplication and excessive cost.
  
  
• They normally ask the body concerned and the complainant to try to resolve complaints before commencing an investigation.
  
  
• Where they identify injustice, they seek to put this right.

The most important skills of an effective ombudsman include active listening, communicating successfully with a diverse range of people, remaining non judgmental, having the courage to speak up and address problems at higher levels within an organization, problem solving and analytical ability, and conflict resolution skills. Specific career background or academic degree is less important than acquiring and demonstrating the skill set described above. Ombudsmen offer their services free of charge, and are thus accessible to individuals who could not afford to pursue their complaints through the courts. An important function of Ombudsman is the exercise of discretionary powers. The discretionary powers are really vast and how to use these powers depend upon the person concerned. Discretionary powers include corruption, negligency, inefficiency, misbehaviour etc.

In the private sector, ombudsmen usually have the power to make recommendations which are binding on the bodies in their jurisdiction unless successfully challenged through the courts.  The cost of their services is normally met by a charge to the bodies in their jurisdiction.  Most are established by, or as a result of, statute, and the relevant industry or sector is obliged to participate in the scheme. An organizational ombudsman is a designated neutral or impartial dispute resolution practitioner whose major function is to provide independent, impartial, confidential and informal assistance to managers and employees, clients and/or other stakeholders of a corporation, university, non-governmental organization, governmental agency or other entity. As an independent and neutral employee, the organizational ombudsman ideally should have no other role or duties. This is in order to maintain independence and neutrality, and to prevent real or perceived conflicts of interest.

Using an alternative dispute resolution (ADR) sensibility, an organizational ombudsman provides options for people with concerns, including whistleblowers, who seek to bring their concerns forward safely and effectively. Additionally, an organizational ombudsman offers coaching on ethics and other management issues, provides mediation to facilitate conflict resolution, helps enable safe upward feedback, assists those who feel harassed and discriminated against. Overall, the organizational ombudsman helps employees and managers navigate bureaucracy and deal with concerns and complaints.

Information obtained by the Ombudsman in an investigation is confidential. At the conclusion of an investigation, the Ombudsman may make formal recommendations, including to:

• refer the matter to another agency;
• rectify administrative actions;
• vary administrative practice;
• reconsider the law which underpins administrative action; or
• give reasons for a decision.

Currently, the role is considered by some as a hallmark of an ethical organization and a key component of an integrated dispute resolution system, or complaint system. Sometimes referred to as the ultimate 'inside-outsider', an organizational Ombudsman adheres to professional standards strictly governing their confidentiality and neutrality. By virtue of their protected and highly placed internal role (e.g., reporting to a board of directors rather than to line or staff management), they can be particularly effective at working long-term with management to help effect change in policies, procedures, systems or structures that are problematic for employees or inefficient for the organization.