Sunday, March 31, 2013

Formalization in organization structure

By: Xi Chen

Formalization is the degree to which rules and procedures are followed in an organization. "The formalized organizational structure consists of a hierarchical, top down reporting and decision-making structure. It is recognized by the existence of explicit, codified standards and regulations" (Schatz, 1999). A formalized structure includes multiple layers of supervision, operational supervisors, top level directors or department heads and middle managers.

What is the difference between informal organizational structure and formal structure? The formal organizational structure is not easily changed regarding the roles. The informal organizational structures are sometimes more innovative than formalized structures. Therefore, the informal structure is more suitable in swiftly-changing departments, such as the technology department. "Additionally, the size of the organization may indicate the degree of formalization required. It is essential to understand the needs of the individual organization when determining which structure is most effective for each situation" (Formal organization, 2013).

This element has varies of difference in organizational structure. For example, some of the organizations use a time clock to control the deviant behavior. The organization sets up the arrival and departure times to work and from work specified to the minute to formalize and reduce the deviant behavior. In other organizations, they will let employees spend sufficient time on the job to get the work done. But in some organizations, the rules and procedures are less strict; they allow employees spend time on exercise or according to do their own judgment. So, different organizations have their own formalization and management styles.

In order to assess the degree of formalization, one need is to use care. In some of the organizations, rules are codified in huge manuals and no one pays attention to them; some of the employees don't even know the rules exist. Some of the organizations choose to write the rules down and post them on high profile targets, so the rules are easy to see and follow. Therefore, the most appropriate definition of formalization is how the organization uses these rules. The key factor is that "The degree to which rules are followed—not the degree to which they are codified" (Formal organization, 2013).

Here is a benefit of the formalization in an organizational structure: the routine nature of succession. The roles of this specific position will never change, no matter who is doing this specific job position. “Use is documented to record the work procedures, so that the new employee will definitely take over the vacant position from other employees" (Schatz, 1999).  The enduring structure of a formalized organization does not change unless it is purposely altered by management. The structure is easily understood and explained. Additionally, alignment of day-to-day work processes with the overall mission of the organization is easily achieved in a formalized organizational structure" (Schatz, 1999).

Formalization is influenced by technology, size, and organizational traditions. The technology can be categorized as routine and non-routine. Sometimes the organizations and work units, which the work is monotonous, are more highly formalized than the organizations and work units, which the work is non- routine. Referring to the previous example, we can easily see that the size of the organization influences the formalization. Large organizations have greater needs to formalize their activities than smaller organizations. Also tradition influences the formalization. "If an early top executive believed that rules and procedures should he follow the letter, this set of beliefs was codified into the organization's procedures manuals" (Formal organization, 2013). The organization will remain more formalized over time than existing conditions that it might have predicted.

What happens to members who rigidly follow formalized organizations or work groups? In these organizations strict rules limit the functioning of all individuals in the organization. "Workers came to follow rules for the sake of the rules themselves since that determined how they were rewarded" (Formal organization, 2013). More and more rules were created and employees started failing to strive for autonomy. The consequences were negative. This resulted in the decline of competitiveness, loss of worker productivity, increased operating costs and prices, and degradation of labor. "These negative consequences of rigid formalization have long been recognized" (Formal organization, 2013).

A number of studies show that the professionalization can't be compatible with formalization. Nonetheless, formalization and professionalization are actually doing the same thing in the organization structure. "Formalization is the internal process through which an organization sets rules, standards, and procedures to ensure that things get done correctly" (Schatz, 1999). From an organization's viewpoint, both processes are operative. If it acquires a specialized work force, the organization itself simply is not paying the costs of inculcating standardized practices. Nevertheless, there could be tension between the standards learned by the professionals and the demands of the organization. "Professionalization is an external means for accomplishing the same result: Business schools teach future managers behaviors that will be expected of them in their work organizations" (Formal organization, 2013).


Schatz Traci. (1999). Basic Types of Organizational Structure: Formal & Informal.
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Formal organization. (2013, March 7). In Wikipedia, The Free Encyclopedia.
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  1. good explanation for formalization. I am very understood concept behind.
    Thank you so much may God Bless me and you too.