A formal organization is an

organization An organization or organisation (Commonwealth English; see spelling differences), is an entity—such as a company, an institution, or an association—comprising one or more people and having a particular purpose. The word is derived from ...

with a fixed set of rules of intra-

procedures and structures. As such, it is usually set out in writing, with a language of

rules Rule or ruling may refer to: Education * Royal University of Law and Economics (RULE), a university in Cambodia Human activity * The exercise of political or personal control by someone with authority or power * Business rule, a rule perta ...

that ostensibly leave little discretion for interpretation. Sociologist

Max Weber Maximilian Karl Emil Weber (; ; 21 April 186414 June 1920) was a German sociologist, historian, jurist and political economist, who is regarded as among the most important theorists of the development of modern Western society. His ideas profo ...

devised a model of formal organization known as the bureaucratic model that's based on the rationalization of activities through standards and procedures. 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. * To facilitate the accomplishment of the goals of the organization: In a formal organization, the work is delegated to each individual of the organization. He/She works towards the attainment of definite goals, which are in compliance with the goals of the organization. * To facilitate the co-ordination of various activities: The authority, responsibility, and accountability of individuals in the organization are very well defined. Hence, facilitating the co-ordination of various activities of the organization very effectively. * To aid the establishment of logical authority relationship: The responsibilities of the individuals in the organization are well defined. They have a definite place in the organization due to a well-defined hierarchical structure that is inherent in any formal organization. * Permit the application of the concept of specialization and division of Labour. Division of work amongst individuals according to their capabilities helps in greater specializations and division of work. * Create more group cohesiveness.

Characteristics

* Well defined rules and regulations * Determined objectives and policies * Status symbol * Limitation on the activities of the individual * Strict observance of the principle of co-ordination * Messages are communicated through scalar chain * It is to best attain the objectives of the enterprise. * Hierarchical work distribution or clear division of labour.

Distinction from informal organization

Formal rules are often adapted to subjective interests—social structures within an

enterprise Enterprise (or the archaic spelling Enterprize) may refer to: Business and economics Brands and enterprises * Enterprise GP Holdings, an energy holding company * Enterprise plc, a UK civil engineering and maintenance company * Enterprise ...

and the personal goals, desires, sympathies and behaviors of the individual workers—so 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 In computing and systems design, a loosely coupled system is one # in which components are weakly associated (have breakable relationships) with each other, and thus changes in one component least affect existence or performance of another comp ...
between their formal structures and actual work activities. - (John Meyer and Brian Rowan, 1976)

The Hawthorne experiments

The deviation from rule-making on a higher level was documented for the first time in the

Hawthorne studies The Hawthorne effect is a type of reactivity (psychology), reactivity in which individuals modify an aspect of their behavior in response to their awareness of being observed. The effect was discovered in the context of research conducted at the Ha ...

(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 chart An organizational chart, also called organigram, organogram, or organizational breakdown structure (OBS) is a diagram that shows the structure of an organization and the relationships and relative ranks of its parts and positions/jobs. The term ...

s of the executive level. Numerous empirical studies in

sociological Sociology is a social science that focuses on society, human social behavior, patterns of social relationships, social interaction, and aspects of culture associated with everyday life. It uses various methods of empirical investigation and ...

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: *Informal standards: personal goals and interests of workers differ from official organizational goals. *Informal communication: changes of

communication Communication (from la, communicare, meaning "to share" or "to be in relation with") is usually defined as the transmission of information. The term may also refer to the message communicated through such transmissions or the field of inquir ...

routes within an enterprise due to personal relations between coworkers. *Informal group: certain groups of coworkers have the same interests, or (for example) the same origin. *Informal leaders: due to

charisma Charisma () is a personal quality of presence or charm that compels its subjects. Scholars in sociology, political science, psychology, and management reserve the term for a type of leadership seen as extraordinary; in these fields, the term "ch ...

and general popularity, certain members of the organization win more influence than originally intended. *Different interests and

preferences In psychology, economics and philosophy, preference is a technical term usually used in relation to choosing between alternatives. For example, someone prefers A over B if they would rather choose A than B. Preferences are central to decision theo ...

of coworkers. *Different status of coworkers. *Difficult work requirements. *Unpleasant conditions of work.

Managerial Management (or managing) is the administration of an organization, whether it is a business, a nonprofit organization, or a government body. It is the art and science of managing resources of the business. Management includes the activities ...

organization theory Organizational theory refers to the set of interrelated concepts that involve the sociological study of the structures and operations of formal social organizations. Organizational theory also attempts to explain how interrelated units of organiz ...

often still regards informal organization as rather disturbing, but sometimes helpful. In the opinion of

systems theory Systems theory is the interdisciplinary study of systems, i.e. cohesive groups of interrelated, interdependent components that can be natural or human-made. Every system has causal boundaries, is influenced by its context, defined by its structu ...

and

cybernetics Cybernetics is a wide-ranging field concerned with circular causality, such as feedback, in regulatory and purposive systems. Cybernetics is named after an example of circular causal feedback, that of steering a ship, where the helmsperson m ...

, 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.

References

This article originated as a translation of the corresponding article in th
German-language Wikipedia
Retrieved November 21, 2004. That article gave the following references: *Organization, Manfred Schulte-Zurhausen, 3. Auflage 2002 München, {{ISBN, 3-8006-2825-2. *Organizations theorien, Kieser A., Kubicek H., 2 Bände 1978 Berlin. *Betriebsführung und Arbeitsmoral, Roethlisberger F. J., 1954 Köln.

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