Formal organization

Last updated

A formal organization is an organization with a fixed set of rules of intra-organization procedures and structures. As such, it is usually set out in writing, with a language of rules that ostensibly leave little discretion for interpretation.

Contents

Sociologist Max Weber devised a model of formal organization known as the bureaucratic model that's based on the rationalization of activities through standards and procedures. [1] It is one of the most applied formal organization models.

In some societies and in some organizations, such rules may be strictly followed; in others, they may be little more than an empty formalism.

Characteristics of Formal Organization

Source: [2]

  1. Stability
  2. Division of Labor
  3. Structured
  4. Permanence
  5. Rules and Regulations
  6. Limitation on Activities of Individual
  7. Principle of Coordination
  8. Communication Throw Vertical Chain
  9. Status Symbol

Stability

An important characteristic of a formal organization is its stability. Therefore, the formal organization grows and expands with the passage of time.

Division of Labor

The structure of the formal organization is based on jobs to be performed by the individual, and not vice versa. Roles are hierarchical and work is assigned to individuals on the basis of expertise and capability.

Structured

A formal organization is structured and organized to accomplish the organizational mission. One exponent has remarked that the “absence of structure is illogical, cruel, wasteful, and inefficient”.

Because of this feature, the roles and responsibilities of individuals in an organization are clearly defined.

Permanence

As the organization is structured, it has continuity of operations. They last for a long time and grow over a period of time.

Rules and Regulations

Formal organizations follow rules and regulations. Individuals working in formal organizations do not perform activities, according to their whims. Rather, they act according to the rules and regulations framed by the organization.

For example, if a cooperative bank has to sanction a loan to a Panchayat for its development, the manager of the bank has to follow guidelines before sanctioning the loan.

Limitation on Activities of Individual

Every individual in a formal individual is assigned specific duties & responsibilities. This is true regulation for every personnel.

Principle of Coordination

Strict observance of the principle of coordination: The coordination between different departments in an organization is strictly maintained to achieve the most efficient result. Coordination will also facilitate easier communication hence making everyone to be on the same page.

Communication Throw Vertical Chain

Messages are communicated through the vertical chain: Normally in a formal organization, the vertical communication chain is followed so that the chain of command & its unity is maintained.

Status Symbol

A formal organization is a separate social entity. The activities have a separate entity from the individuals performing those activities.

Distinction from informal organization

Formal rules are often adapted to subjective interestssocial structures within an enterprise and the personal goals, desires, sympathies and behaviors of the individual workersso that the practical everyday life of an organization becomes informal. Practical experience shows no organization is ever completely rule-bound: instead, all real organizations represent some mix of formal and informal. Consequently, when attempting to legislate for an organization and to create a formal structure, it is necessary to recognize informal organization in order to create workable structures. However, informal organization can fail, or, if already set in order, can work against mismanagement.

Formal organizations are typically understood to be systems of coordinated and controlled activities that arise when work is embedded in complex networks of technical relations and boundary-spanning exchanges. But in modern societies, formal organizational structures arise in highly institutional contexts. Organizations are driven to incorporate the practices and procedures defined by prevailing rationalized concepts of organizational work and institutionalized in society. Organizations that do so increase their legitimacy and their survival prospects, independent of the immediate efficacy of the acquired practices and procedures. There can develop a tension between on the one hand, the institutionalized products, services, techniques, policies, and programs that function as myths (and may be ceremonially adopted), and efficiency criteria on the other hand. To maintain ceremonial conformity, organizations that reflect institutional rules tend to buffer their formal structures from the uncertainties of the technical activities by developing a loose coupling between their formal structures and actual work activities. - (John Meyer and Brian Rowan, 1976)

Identification numbers and public registers

In some countries, formal organizations are registered in public registers to make their identification easier even if an organization renames.

Examples of organization identifiers:

The Hawthorne experiments

The deviation from rule-making on a higher level was documented for the first time in the Hawthorne studies (1924–1932) and called informal organization. At first this discovery was dismissed as the product of avoidable errors, until it finally had to be recognized that these unwritten laws of work of everyday life often had more influence on the fate of the enterprise than those conceived on organizational charts of the executive level. Numerous empirical studies in sociological organization research followed, ever more clearly providing evidence for this, particularly during the human relations movement. It is important to analyze informal structures within an enterprise to make use of positive innovations, but also to be able to do away with bad habits that have developed over time.

Reasons for informal organization

There are many different reasons for informal organization:

Managerial organization theory often still regards informal organization as rather disturbing, but sometimes helpful. In the opinion of systems theory and cybernetics, however, formal organization fades into the background and only serves, if necessary, to supplement or to correct. Changes in structure always redevelop because of the conduct and differences among coworkers, and the ability of self-organization is recognized as a natural characteristic of a social system.

Related Research Articles

Business is the practice of making one's living or making money by producing or buying and selling products. It is also "any activity or enterprise entered into for profit."

<span class="mw-page-title-main">Organization</span> Social entity established to meet needs or pursue goals

An organization or organisation, is an entity—such as a company, an institution, or an association—comprising one or more people and having a particular purpose.

Within the realm of communication studies, organizational communication is a field of study surrounding all areas of communication and information flow that contribute to the functioning of an organization. Organizational communication is constantly evolving and as a result, the scope of organizations included in this field of research have also shifted over time. Now both traditionally profitable companies, as well as NGO's and non-profit organizations, are points of interest for scholars focused on the field of organizational communication. Organizations are formed and sustained through continuous communication between members of the organization and both internal and external sub-groups who possess shared objectives for the organization. The flow of communication encompasses internal and external stakeholders and can be formal or informal.

<span class="mw-page-title-main">Organizational theory</span> Organizational theory

Organizational theory refers to a series of interrelated concepts that involve the sociological study of the structures and operations of formal social organizations. Organizational theory also seeks to explain how interrelated units of organization either connect or do not connect with each other. Organizational theory also concerns understanding how groups of individuals behave, which may differ from the behavior of an individual. The behavior organizational theory often focuses on is goal-directed. Organizational theory covers both intra-organizational and inter-organizational fields of study.

An organizational structure defines how activities such as task allocation, coordination, and supervision are directed toward the achievement of organizational aims.

Governance is the process of making and enforcing decisions within an organization or society. It encompasses decision-making, rule-setting, and enforcement mechanisms to guide the functioning of an organization or society. Effective governance is essential for maintaining order, achieving objectives, and addressing the needs of the community or members within the organization. Furthermore, effective governance promotes transparency, fosters trust among stakeholders, and adapts to changing circumstances, ensuring the organization or society remains responsive and resilient in achieving its goals. It is the process of interactions through the laws, social norms, power or language as structured in communication of an organized society over a social system. It is done by the government of a state, by a market, or by a network. It is the process of choosing the right course among the actors involved in a collective problem that leads to the creation, reinforcement, or reproduction of acceptable conduct and social order". In lay terms, it could be described as the processes that exist in and between formal institutions.

<span class="mw-page-title-main">Business process modeling</span> Activity of representing processes of an enterprise

Business process modeling (BPM), mainly used in business process management; software development, or systems engineering, is the action of capturing and representing processes of an enterprise, so that the current business processes may be analyzed, applied securely and consistently, improved, and automated. BPM is typically orchestrated by business analysts, leveraging their expertise in modeling practices. Subject matter experts, equipped with specialized knowledge of the processes being modeled, often collaborate within these teams. Alternatively, process models can be directly derived from digital traces within IT systems, such as event logs, utilizing process mining tools.

In economics, rationalization is an attempt to change a pre-existing ad hoc workflow into one that is based on a set of published rules. There is a tendency in modern times to quantify experience, knowledge, and work. Means–end (goal-oriented) rationality is used to precisely calculate that which is necessary to attain a goal. Its effectiveness varies with the enthusiasm of the workers for the changes being made, the skill with which management applies the rules, and the degree to which the rules fit the job.

Organizing or organising is the establishment of effective authority-relationships among selected works, which often improves efficiency.

<span class="mw-page-title-main">Social organization</span> Pattern of relationships between and among individuals and social groups

In sociology, a social organization is a pattern of relationships between and among individuals and groups.

In sociology, the iron cage is a concept introduced by Max Weber to describe the increased rationalization inherent in social life, particularly in Western capitalist societies. The "iron cage" thus traps individuals in systems based purely on teleological efficiency, rational calculation and control. Weber also described the bureaucratization of social order as "the polar night of icy darkness".

Lateral communication is "the exchange, imparting or sharing of information, ideas or feelings between people within a community, peer groups, departments or units of an organization who are at or about the same hierarchical level as each other for the purpose of coordinating activities, efforts or fulfilling a common purpose or goal

The informal organization is the interlocking social structure that governs how people work together in practice. It is the aggregate of norms, personal and professional connections through which work gets done and relationships are built among people who share a common organizational affiliation or cluster of affiliations. It consists of a dynamic set of personal relationships, social networks, communities of common interest, and emotional sources of motivation. The informal organization evolves, and the complex social dynamics of its members also.

Social rule system theory is an attempt to formally approach different kinds of social rule systems in a unified manner. Social rules systems include institutions such as norms, laws, regulations, taboos, customs, and a variety of related concepts and are important in the social sciences and humanities. Social rule system theory is fundamentally an institutionalist approach to the social sciences, both in its placing primacy on institutions and in its use of sets of rules to define concepts in social theory.

<span class="mw-page-title-main">Onboarding</span> Management jargon

Onboarding or organizational socialization is the American term for the mechanism through which new employees acquire the necessary knowledge, skills, and behaviors to become effective organizational members and insiders. In standard English, this is referred to as "induction". In the United States, up to 25% of workers are organizational newcomers engaged in onboarding process.

<span class="mw-page-title-main">Management control system</span> Higher level management tasks conglomerate

A management control system (MCS) is a system which gathers and uses information to evaluate the performance of different organizational resources like human, physical, financial and also the organization as a whole in light of the organizational strategies pursued.

A glossary of terms relating to project management and consulting.

POSDCORB is an acronym widely used in the field of management and public administration that reflects the classic view of organizational theory. It appeared most prominently in a 1937 paper by Luther Gulick. However, he first presented the concept in 1935. Initially, POSDCORB was envisioned in an effort to develop public service professionals. In Gulick's own words, the elements are as follows: Planning, Organizing, Staffing, Directing, Co-Ordinating, Reporting and Budgeting.

<span class="mw-page-title-main">Working group</span> Group of experts working together

A working group, is a group of experts working together to achieve specified goals. The groups are domain-specific and focus on discussion or activity around a specific subject area. The term can sometimes refer to an interdisciplinary collaboration of researchers working on new activities that would be difficult to sustain under traditional funding mechanisms.

Text and conversation is a theory in the field of organizational communication illustrating how communication makes up an organization. In the theory's simplest explanation, an organization is created and defined by communication. Communication "is" the organization and the organization exists because communication takes place. The theory is built on the notion, an organization is not seen as a physical unit holding communication. Text and conversation theory puts communication processes at the heart of organizational communication and postulates, an organization doesn't contain communication as a "causal influence", but is formed by the communication within. This theory is not intended for direct application, but rather to explain how communication exists. The theory provides a framework for better understanding organizational communication.

References

  1. "Formal Organization: Definition, Characteristics, Examples & More". Mundanopedia. 2022-03-18. Retrieved 2022-03-21.
  2. "What is Formal Organisation? Definition, 9 Characteristics". getuplearn.com. 2022-11-25. Retrieved 2024-02-04.

This article originated as a translation of the corresponding article in the German-language Wikipedia. Retrieved November 21, 2004. That article gave the following references:

Further reading