According to Agarwal (1983), formalization is the degree to which regulations, rules and processes are observed within an organization.
The fundamentals of formalizations diverge greatly from one organization to another in that some organizations have strict reporting and departure time to and from work with time clocks applied to monitor unexpected attitudes, another organization demands that workers spend enough time to get the duties accomplished while another may demand that workers have the right to exercise their own judgment in carrying out duties.
Formalization therefore is the application of rules within an organization and the extent of their codification (p. 354).
Advantages of Formalization
One of the key advantages of formalization is the fact that formal organization have easy to fathom leadership structures that are placed in concert by the given rules and regulations thereby eliminating the question of who is in control of the organization. The formal organizational structure leaves no chance for misconception of the modus operandi and processes.
Formalization also improves rationality of organizations that applies it as it seeks to standardize attitudes by enabling precise predictability. A good example is the standardization of production processes for the production unit workers in an organization with the aim of ensuring quality before products are released into the market.
Another major advantage of formalization is the fact that it enables a smooth transition of authority by enabling habitual and customary succession processes with little or no interruptions to the firm’s functioning. An example of such processes is the systematic appointment of the Catholic Church’s cardinals and popes.
The other significant benefit of the formalization is the fact that they offer fundamental framework of the division of labor and responsibilities. Lack of such structures makes employees to concur on roles and responsibilities. It therefore creates clarity on the level of assistance and input that every worker can anticipate from another and what is anticipated of him in return (Gupta, 2009).
The system also promotes discipline amongst the staff in the organization as it aims at controlling the attitudes of the worker and improving on the efficiency of the organization.
Other benefits of formalization include the fact that it enables easy and fast assessment and revision of the organization as a result of the changing requirements and dynamic operating environment. It also offers a framework for the structuring of pay scales and in the human resource development practices such as recruitment, elevation and workforce planning (M.Walker, Boyne, & Brewer, 2010).
Disadvantages of Formalization
Although formalization has numerous benefits, some of the disadvantages include the fact that the coded decision making process is long thereby hampering faster decision making and making the organization inefficient in meeting its obligations. Decisions are made by the leaders who cannot be influenced by the workers who are directly affected by the decisions.
The result of this is that solutions are decided by individuals with no direct knowledge or understanding of the problems. Formalization also discourages and hampers innovation and creativity by workers as a consequence of rules and regulations that demands of workers to follow laid down procedures and regulations in the performance of duties.
The system creates a state of subordination within the organization through controls that requires employees to follow strict instructions and as a result few individuals in such organizations are able to think beyond the rules, be innovative and take initiative (M.Walker, Boyne, & Brewer, 2010).
References
Agarwal, R. (1983). Organization and Management. Nodia, UP, India.: Tata McGraw- Hill Education.
Gupta. (2009). Principles of Management. Mumbai, India: PHI Learning Pvt. Ltd.
Walker, R. M., Boyne, G. A., & Brewer, G. A. (2010). Public Management and Performance: Research Directions. Cambridge, England: Cambridge University Press.