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Formalization is the process of creating structures that govern operations within an organization. In a formalized organization, work activities are often controlled by a set of accepted rules and procedures. In addition, a formalized structure has a hierarchical and clear reporting structure that runs from bottom to top. To a large extent therefore, a formalized organization is managed through several levels of supervision. The extent of formalization, however, varies from one organization to another and is mainly determined by the size of the organization.
As opposed to informational organizational structures where individuals are esteemed higher than the job positions, a formal organizational structure is made up of rules that unmistakably state how work should be done at the various levels in the hierarchy. Since rules that guide the holder of a position are static, no confusion arises when the holder of the position changes. This thus implies that the transition process is streamlined.
Advantages of Formalization
There are several advantages of a formalized organizational structure. First, the process of succession is quite simplified. Regardless of the occupant of a position, rules and procedures in a formalized structure very clearly stipulate what has to be done by the holder of the office. Formalization thus facilitates a smooth transition in case an employee has to leave the organization or gets promoted to a different position.
Secondly, a formalized structure allows all employees to understand what is expected of them and this helps management to ensure that everyone works toward the realization of an organization’s vision and mission. As noted earlier, the rules and procedures that govern operations at every level do not change. As such, a new occupant to an office easily fits into the structure. Undoubtedly, this enables an organization to minimize time wastage in the event that a transition has to take place.
Thirdly, a formalized structure simplifies the process of aligning work activities with organizational goals and objectives. All employees are guided by a plan put in place to ensure that everyone works to accomplish what is agreed upon.
Disadvantages of Formalization
A formalized organizational structure has a number of drawbacks. The rigidity of the structure leaves very little room for innovation. Occupants of a given position are expected to operate within certain boundaries and this kills the spirit of invention among staff. As a result, formalized structures are considered unsuitable for a field characterized by constant changes. Generally, a dynamic environment requires managers to keep changing tact in order to cope with existing competition.
Secondly, the rigid nature of a formalized structure also limits the originality of individuals. Employees are compelled to depend on management to provide solutions to any challenges encountered. This dependency syndrome may work against the organization especially when employees come across situations that require them to think and act immediately.
Although formalization and professionalism are expected to be the same, a number of studies indicate there is a mismatch between the two. To some extent, a formalized organizational structure may be blamed for the alienation of professional members of staff.
The establishment of a formalized structure depends on a number of key factors. While tradition and technology can affect a decision by an organization to adopt a formalized structure, size has the greatest influence. Despite the drawbacks discussed, a formalized structure simplifies operations and enables top management to guide all employees toward the organization’s vision and mission.